Annual Salary Budget
Each year as part of the budget planning process, the University of Houston will prepare a salary budget that specifies the average increase amount, if any, to be given to employees during the fiscal year. The salary budget will be based on a comparison of the university's pay rates to external salary survey data, as well as the salary budgets projected by other peer and comparison organizations. The salary budget will reflect dollars available to fund general and/or merit increases.

Merit Increases
University of Houston policies permit the awarding of merit increases on a semi-annual basis to be effective either on September 1 and March 1. Only benefits-eligible employee who have completed six month of continuous employment at the University as of the effective date of the merit program are eligible to receive a merit increase.

Merit increases are based on an employee's documented job performance and are intended to reward individual performance, increased productivity, improved quality, and/or reduced costs. To be eligible for a merit increase, individuals must have a current performance appraisal on file in the Human Resources Department.

Whenever a merit increase program is funded and authorized, the Human Resources Department will prepare and distribute detailed guidelines to college and division business administrators. The guidelines will include the authorized merit increase amount, funding requirements, performance level required to be eligible to receive a merit increase, and other program criteria. Merit increases must be approved by the Board of Regents prior to their implementation.

Equity Pay Adjustments
The Human Resources Department periodically audits pay rates within classifications to identify potential pay problems. It is also the responsibility of the college or division to bring to the attention of the Assistant Director for Human Resources any significant pay problems that may exist in their organization.

A dean or division head may initiate a pay equity adjustment whenever he or she determines that the present level of compensation of an employee or group of employees is at a level that:

(1) it results in an unusual level of turnover of employees in the group; or,

(2) it results in the affected department experiencing significant difficulty in recruiting candidates to fill vacant positions; or,

(3) it results in a disparity in current paid rates for similarly classified employees in that unit; or,

(4) the level of compensation is substantially below the comparable level of compensation for similar employment outside the University of Houston; and,

(5) the present level of compensation has substantially reduced the university's ability to deliver services.

• internal equity

• external competitiveness

• longevity

• quartile within salary range

All equity pay adjustments are subject to review and approval by the college or division administrator, dean or division head, and the director of the Human Resources Department. Normally, funds for any approved equity pay adjustment must come from the authorized budget of the affected college or division.

Promotions
When an individual is promoted, his or her pay will normally be adjusted to reflect the new level of responsibility. In isolated situations, when an individual's base pay rate is at a higher level than rates paid to incumbents, an individual may be granted a promotion with no change in pay.

Any promotional increase should raise the employee's pay rate to at least the minimum of the pay range. Conversely, a promotional increase may not increase the employee's pay rate above the maximum of the new pay range.

The hiring college or division has full discretion for placing the pay rate of an exempt employee up to the midpoint. Recommended promotional increases which fall outside of these parameters are governed by normal university hiring procedures and approval processes. All promotional actions must be reviewed by the Compensation Section.

In determining recommended promotional increase amounts, the following factors are considered:

• rates paid to incumbents in the new position, both within hiring college or division and in other colleges and divisions throughout the University

• pay range for the new position and the difference in the number of pay grades between the old position and the new position

• performance level of the individual being promoted

• qualifications of the individual versus qualifications of incumbents in the same job in the college or division

• external salary survey data, if it is available

• change in FLSA designation overtime designation; i.e., a change from a nonexempt job to an exempt job.

The affected employee should not be notified of the proposed promotional increase amount until it has been approved by the Human Resources Department.

Position Re-evaluations
Employees whose jobs are re-evaluated to a higher pay grade may require adjustments to their base pay rates. Calculations of pay adjustments, if any, will normally be handled in the same manner as promotions. Any pay adjustment granted should raise an employee's pay to at least the minimum of the new pay range.

Re-evaluating a classification to a lower pay grade will not normally result in a reduction to an employee's pay. Nonetheless, a downgrade will require that if the current pay of any employee is above the new maximum, the employee's pay will be "red-circled" and all increases will be withheld until the compensation level is equal to or less than the new maximum.

Demotions New base pay rates of employees who are demoted to jobs assigned to lower pay grades will be based primarily on the base pay rates of incumbents in the new classification.

A demotion may or may not result in a reduction in the employee's base pay rate. The new pay rate, however, must fall within the pay range of the new job. If the employee's pay falls above the maximum of the new pay range, the employee's pay must be reduced to at least the maximum of the pay range.

All demotions require prior approval by the director of the Human Resources Department.

Lateral Reclassifications
Lateral reclassifications occur when job responsibilities have changed but are similar in scope and responsibilities. The overall job requirements are comparable in the new job with the same pay grade as the old job.

Normally, there will be no change to the base pay rate of an employee who is laterally transferred. Under extraordinary circumstances and in extremely rare situations, an employee may receive a salary increase on a lateral move. Any increase granted on a lateral move requires the approval of the director of the Human Resources Department.