Free Sample Compensation Policy
download free sample human resources policies and job descriptions

Sample Compensation Policy

Donate & Download Entire Site


Compensation and Classification Policy

Establishing a Position

Appointment Rates

Pay Adjustments



Call-In/Call-Back Pay

Stand-by Pay

Shift Differential

Additional Compensation Requests


Employer ABC’s compensation policy will:

Establish salary ranges that reflect the value of each job determined by job the evaluation process.

Establish and maintain justifiable differentials between job levels.

Adjust salary ranges as required by changing economic and competitive factors.

Promote superior performance through pay increases for employees who display exceptional individual performance, as determined by a consistent system of performance evaluation.

Ensure that practices and procedures comply with all federal and state laws.


The Vice-President of Human Resources reviews, allocates, eliminates, and establishes new classifications and assigns each classification a pay grade.

Human Resources will evaluate positions and the assign grade levels through the job evaluation system.

At the request of a supervisor, Human Resources will review a classification and/or pay grade assignment.  The department will give HR a current organization chart, a completed Job Analysis Questionnaire (JAQ) and New Position Request (NPR).  A position is classified based on the education, training, skills, and experience required and the duties, responsibility and authority assigned.

Employer ABC's salary ranges and job descriptions are located in Human Resources.

Establishing a Position


Human Resources review and assign a classification and pay grade to each new position.


The department completes the JAQ that provides information about the proposed position.

The department prepares a NPR that provides information about the funding source for the position.  The NPR and JAQ are forwarded to Compensation and Benefits, Human Resources.

Human Resources determines the salary grade level and job classification of the position.

Human Resources enters salary and title information on the NPR and forwards it to the appropriate Vice-President for approval.

The Vice-President forwards the NPR to Finance for funding approval.

Finance reviews the funding arrangement.

Finance forwards the approved NPR to Human Resources.

Appointment Rates


All new employees shall be paid at the minimum of the salary range established for the position.  New employees can be paid to the midpoint of the salary range when the candidate's training, education, experience, and skills are considered.  The Vice-President of Human Resources gives final approval of rates above the range minimum for new employees.  Except in unusual circumstances, appointment rates will not exceed the range midpoint.  The CEO will decide if an appointment rate is to be above the range midpoint.

Where unusual market conditions exist for a particular position, the Vice-President of Human Resources may establish a temporary appointment rate so that the University can recruit and retain competent employees.  Such rates shall be reviewed at least every  months and authorized only as long as the market for the position might warrant.


The Vice-President of Human Resources approves all appointment rate requests above the minimum rate or above the rates normally given to employees who are promoted.  Human Resources will notify the department of the decision.



Reclassification occurs when a position is re-allocated to a different salary grade due to changes in duties, responsibilities, and job requirements.

A pay increase due to reclassification occurs when the employee’s position is assigned a higher salary grade.  The reclassification and pay increase are effective the date the reclassification request was submitted to Human Resources.

Where a higher salary grade is re-allocated to the position, supervisors can request an increase equal to:

·          percent over the employee's current salary or

·         Movement of the current salary to the minimum of the new salary range, whichever is greater.

The increase may not be above the maximum of the new salary range.


The department completes a JAQ and NPR and forwards the documents to Human Resources.

Human Resources reviews and determines the appropriate salary range.

Human Resources notifies the supervisor of the decision with respect to the salary grade.

Human Resources forwards the NPR to the appropriate Vice-President for approval.

The Vice-President forwards the NPR to finance for approval.

Finance forwards the approved NPR to Human Resources.

Payroll updates the payroll system.  Human Resources provides the department with the confirmation letter on the classification action.  The supervisor is responsible for notifying the employee of the action taken.

The Employee Service Center will prepare the necessary database changes.  A copy of the computer-printed Payroll Action Form, noting the adjustment due to the reclassification, will be returned to the department.

Pay Adjustments


Subject to the annual budget, adjustments may be made to individual employee compensation and the salary grades.  Pay increases shall normally become effective enter date.


Each year ABC will determine if the salary grades will be adjusted.  The determination will be based upon:

·         The percentage of change in the appropriate labor markets;

·         The competitive status of ABC's salary ranges; and

·         ABC's financial health.


Each year, ABC will determine what increases (if any) will be given to employees for salary adjustments.  The increase will reflect the dollars available for funding general and performance increases and will take into account the same criteria outlined above.

General Increases

The general increase is given to all staff and is tied to the annual cost of living adjustment.  The resulting base pay cannot be above the position's salary range maximum amount.

Performance Increases

Performance increases may be awarded to employees who have completed at least six months' service in the current position as of the effective date of the increase.  An employee with unsatisfactory performance is will not receive a performance increase.

Adjustments to an employee's base pay will not exceed the maximum of the salary range.  Any increase beyond the maximum of the salary range will be paid in a single payment and will not be added to the employee's base pay.  A single payment requires the approval of the Vice-President of Human Resources.


Special increases may be granted to recognize exceptional market factors and internal equity.  These increases require the approval of the Vice-President of Human Resources and the Vice-President of Administration.


When an employee is promoted, the supervisor can request a promotion increase of  percent based on the employee's current salary or the minimum of the new salary range of the new position, whichever is greater.  Increases that exceed this amount must be authorized by Human Resources.  The increase cannot exceed the maximum of the salary range of the new position.

Promotion increases are effective the date of approval of the promotion.


A pay increase resulting from reclassification occurs when a position is re-assigned to a higher salary grade.  The reclassification and pay increase are effective the first day of the pay period closest to the implementation date.

The supervisor may request an increase not to exceed  percent beyond the employee's current salary or the minimum of the salary range for the new position, whichever is greater.  The increase cannot exceed the maximum of the salary range of the new position.


The employee’s salary will be reduced at least to the maximum of the new salary grade.  The new pay rate is reviewed on an individual basis and must be approved by the Director Human Resources.


Transfers normally occur at the same rate of pay but not below the minimum rate for the new position.



Approval of the supervisor is necessary to authorize work performed beyond normal working hours.

Compensation for extra hours worked over # of hours in a regular workweek hours in a workweek may be made by:

·         granting an equal amount of straight-time off at a mutually agreed-upon future date or;

It is expected that employees' working hours may vary and that such variations are not a basis for additional pay (Optional.  Normally, you would have one or the other of these first two options).

·         by providing the extra straight-time compensation on the paycheck or;

By providing compensation at time-and-a-half of the regular rate (This may be a legal requirement or a collective bargaining requirement.  Normally, you would have only one of these last two options).


An accurate record of all hours worked must be maintained each .  Overtime should be reported to Payroll on the  Time Report.


An employee called in for non-scheduled work will be paid a minimum of  hours' work or a minimum of  hours' pay.

An employee called in to work before his or her normal shift who continues to work into his or her regular shift will not be considered to be either Called-In or Called-Back and will be paid only for all hours worked.  If there is less than one hour between the completion of call-in/call-back work and the normal starting time, this time also will be considered as time worked.

Employees are expected to work when called unless excused for good reason.  The supervisor shall exercise reasonableness and fairness when administering call-in/call-back.

The hours paid for call-in/call-back are credited toward hours worked in the week for overtime purposes.

Stand-by Pay

Employees are not normally scheduled for standby.  ABC may schedule employees when it deems it necessary.

An employee on call will be paid  hour at his or her regular rate of pay for each eight hours of standby.  If the he employee is called in, he/she shall be paid the greater of a minimum of  hours pay or the actual hours worked in addition to the standby pay.

The hours paid for standby  be credited toward hours worked in the week for overtime purposes.

Standby does not require the employee to remain on the ABC’s premises and is free to engage in his or her own pursuits.  Employees on standby must notify the department about where they can be reached.

For the purposes of State Law, an employee on Standby is not working (Optional)

Only the time actually spent in making the call is counted as hours worked.

Shift Differential


All employees working between 4:00 pm and 8:00 am shall receive shift differential.  Partial hours will be pro-rated.


A shift differential of  percent will be authorized for all situations.  Pay for shift premium is calculated by Payroll.

Shift premium hours must be entered on the Time Report and submitted  to Payroll.

Donate & Download Entire Site