University of Minnesota
Office of Human Resources
http://www.umn.edu/ohr
612-625-2016

Merit Pay Programs

Merit Pay Programs

Recognizing and rewarding high performance is a key presidential priority for driving excellence at the University. Merit pay is a compensation program where base pay increases are determined by individual performance (as opposed to across the board increases). Using merit pay criteria and having a plan are good ways for a department to reward high performance, an effort that is especially crucial as the University strives for excellence.

Currently, P&A and faculty employees across all colleges participate in merit pay programs. Civil Service employees in select participating departments, colleges and units are covered by merit pay plans. By 2015 all employees will move to a merit pay program.

This site consolidates the information available about merit pay programs for units, departments, and colleges that are in the process of implementing or revising their merit pay programs. Please see the "Tools and Resources" section for more information.

Colleges and units that are interested in a customized merit training for their management team should contact their OHR consultant.

Merit Pay for Civil Service Employees

In the FY’14 compensation pay plan, President Kaler communicated his intention to have all of the University’s colleges and administrative units operating in a merit-based pay system by June 2015.

In order to comply with this timeline, we have outlined the major activities that need to be completed by June 30, 2014:
       • Receive OHR approval of merit plan
       • Communicate OHR-approved performance evaluation process (including merit) to employees
       • Develop and implement a training program for employees and supervisors
       • Provide written communication to employees stating:
                  1. Unit’s decision to provide merit-based salary increases
                  2. Guidelines of the performance evaluation program including performance ratings.
                  3. Merit model being incorporated along with additional information if known
                (i.e. merit increase amounts)

For units that participated in a merit plan in the previous year and want to make changes to their performance management and/or merit plans: Obtain OHR approval of the proposed changes prior to communicating or implementing the changes. Units that have changes that are deemed major by OHR, must communicate to employees about the changes before June 30, 2014.

For more information, please visit review the compensation pay plan.
 

Tools and Resources

Customizable Merit Pay Planning and Implementation Guide (pdf)
Handbook for HR Professionals who are implementing merit pay

Customizable Merit Pay Readiness Form (pdf)
Questions designed to help you access your readiness for a merit pay program

Customizable Project Plan for Implementing Merit Pay (Sample) (pdf)
A customizable merit pay program plan template

Merit Pay Design Elements Checklist (pdf)
A supplemental tool to support the design phase of your plan

Merit Pay: Template Options (pdf)
There's more than one way to implement merit. This document explains two different options for using merit pay programs with Civil Service employees.

Budget Tools:
It is possible to successfully implement merit pay and stay within your budget and reward high performers. This is illustrated with these three examples.

  1. Modeling - Performance Only (Excel)
  2. Performance and Market/Equity (Excel)
  3. Audit Review Spreadsheet (Excel)
Merit Pay Approval Form (Word)
The required form you need to submit to OHR

Merit Pay Implementation Checklist (pdf)

A supplemental tool to support the implementation phase of your plan

Training:

The Road to Merit Pay (ppt)

Colleges and units that are interested in a customized merit training for their management team should contact their OHR consultant