Free Sample Compensation Policy
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Sample Compensation Policy

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[   ]  Senior Management Team

[   ]  Vice President

Source:   Human Resources

Date Reaffirmed:

Date Revised:

Date Effective:

2.     POLICY

·         Employer ABC is committed to providing comprehensive compensation policy practices for all staff.

3.     PURPOSE

·         The policy ties economic adjustments to the consumer price index and commits ABC to performance management involving annual reviews and salary adjustments.

·         ABC recognizes the importance and performance of staff in achieving and supporting the organization’s goals.  Therefore, compensation policies will ensure fair and equitable treatment of staff through job evaluation, competitive pay and performance-based pay increases.

·         The compensation policy is designed to create an environment which will:

·         Attract, retain and reward high-quality staff.

·         Provide internal equity through consistent application of job evaluation.

·         Pay salaries that are competitive with rates for similar positions in the labor market.

·         Reward staff for individual and team performance and for contributing to the goals of ABC.

·         This policy applies to all positions except:

·         CEO

·         Vice Presidents, if on contract

·         Contractors

·         Students


·         Human Resources is responsible for Compensation.  The appropriate Vice President, General Manager, Director or Manager will consult with Human Resources when making decisions within the policy.

·         Job Evaluation for New Positions

Employer ABC utilizes the Enter Name of Job Evaluation Tool of job evaluation.  This system ranks positions on the basis of Enter Evaulative Criteria.

·         Human Resources will maintain the job evaluation process and work with the manager and/or employee to ensure job descriptions are accurate.

·         Human Resources will establish pay grade allocation for new positions and decisions are final.

·         Human Resources is responsible for evaluating positions within the administrative support group and allocating those positions to a pay grade.

·         When appropriate, Human Resources will maintain an appeal process as part of the job evaluation process.

·         Human Resources is responsible for communicating compensation initiatives with staff.

·         Human Resources will recommend salary policies and/or policy revisions to Senior Leadership.

·         Job Re-evaluation

If there are significant changes to a position, or restructuring that significantly effects a position, a re-evaluation will be performed.

·         If Human Resources re-allocates the position to a higher pay grade, employees will be assigned a salary as follows:

·         One pay grade higher – % increase over current salary or to the minimum of the new pay grade, whatever is higher.

·         Two or more pay grades higher – % increase over current salary, or the minimum of the new pay grade, whatever is higher.

·         Salary increases are effective retroactively to the date Human Resources received the request.

·         If Human Resources re-allocates the position to a lower pay grade, the employee’s salary will not change.  Future economic or merit increases will not be given until the pay grade maximum for the new band exceeds the employee’s salary.

·         Compression

Supervisors shall be paid a minimum of 10% more than the top of the range of the majority of employees supervised.

·         Human Resources will identify positions with compression and complete salary adjustments.

·         Market Pay Adjustments

When external considerations affect salaries (i.e.  demand for certain skills exceed supply), special adjustments may be needed to attract and retain employees.

·         Human Resources will determine whether market pressure exists.  If an adjustment is warranted, a temporary market pay grade will be assigned to the position.

·         Human Resources will review supplements each year to determine if they are warranted.

·         Economic Adjustments

·         Tied to the consumer price index.

·         Applied to the pay grade and the employee’s salary.

·         Tied to the budgetary process.

·         Merit Increases

Each year a percentage of the total salary budget will be distributed proportionately to the salary budgets of each Vice President for the purpose of merit increases.

·         Employee’s salaries are reviewed and adjusted for merit increases on their anniversary date.  Anniversary date refers to the most recent of:

·         Date of hire

·         Date of last promotion

·         Date of last position reclassification, or

·         Date of return from last leave of absence.

·         Employees whose performance is satisfactory will receive a salary increase equal to % of the minimum of their pay grade.

·         Employees whose performance is less than satisfactory will not receive an increase in salary.

·         Employees whose performance is exceptional may receive a salary increase greater than % of the minimum of their pay grade, subject to Vice Presidential and Human Resources approval.

·         New Hire Rates of Pay

Salaries for new employees normally fall between the minimum and the midpoint of the pay grade.  When establishing salaries for new employees, a comparison must be made between the successful applicant and the job requirements, including:

·         Education level required.

·         Previous relevant experience.

·         Placement of other employees in the range in similar positions (salaries, qualifications, skills, and related experience).

·         Starting salaries will be established in consultation with Human Resources and salary commitments should not be made to anyone without prior consultation.

·         Promotion

Promotion is when an employee attains a position where the pay grade is at least one grade higher than the employee’s current pay grade.

·         Promotion formula:

·         One pay grade higher – % increase over current salary or to the minimum of the new pay grade, whichever is greater.

·         Two or more pay grades higher – % increase over current salary or the minimum of the new pay grade, whichever is greater.

·         Special circumstances that supersede the promotional formula may occur and require the involvement of the respective Vice President and Human Resources.

·         Lateral Transfer

Lateral transfer is when an employee attains a position in the same pay grade as the position that the employee is leaving.  There is not change to salary or the employee’s anniversary date.

·         Acting Appointments

An acting appointment is when an employee is assigned all or a significant portion of the responsibilities of a job in a higher salary range.

·         Acting pay is considered when the period of higher responsibilities exceeds six (6) weeks.

·         The acting pay calculation is the same as the Promotion formula.

·         Other Situations

Unique circumstances not covered under this policy must be referred to Human Resources.

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