Compensation Philosophy. Compensation Policy and Guidelines Purpose. Scope. Responsibilities. Definitions

Transcription

1 Compensation Philosophy EMPath s philosophy is to compensate employees equitably, based on performance and within the guidelines of budget constraints. We base this philosophy on our desire to attract, retain and motivate an outstanding workforce. This philosophy is designed to pay market rate for roles, to reward for high performance in role; award promotional increases, as well as reward longevity and loyalty. In order to do this EMPath will maintain a system of job evaluation that will enable us to recognize differences in these areas that will impact employee pay. Compensation Policy and Guidelines Purpose In order to attract and retain people with the right skills, as well as to achieve strategic and operational objectives, we must offer competitive and equitable compensation. We are committed to providing staff members with fair and equitable compensation for all work done. EMPath s Compensation Policy is intended to spell out the principles, rules and guidelines that drive remuneration practices at the organization. Transparency of compensation practices ensures alignment of staff member expectations with organizational objectives and practices. Scope This policy applies to all staff members of EMPath. For specifics related to assistant vice presidents, vice presidents, officers and chief executive officer compensation see appendix A Responsibilities The Human Resources office is responsible for compensation policy and practice at EMPath. All individuals in a supervisory position are responsible for compensation policy interpretation and application. Guidance should be sought from the Human Resources Department for unusual circumstances. No individual is permitted to make any compensation-related commitments on behalf of EMPath that deviate from stated policies prior to appropriate review and approval. Definitions Compensation Monetary wage or salary remuneration for work performed.

2 Pay band A compensation range that represents a monetary starting salary point and maximum for a given role. Governing Laws and Regulations Fair Labor Standards Act Policy General Principles 1. The compensation system is designed in part to support the performance evaluation process. Annual compensation increases can occur to acknowledge an individual s performance or to reflect an increase in their responsibilities. 2. An individual s exact rate of compensation is private and confidential information. We do not prohibit employees from sharing their salary information. We will not release this information to any third party without written approval from the staff member. 3. There is a limited number of staff that has access to salary information, that access must have a valid business purpose. 4. Due to IRS and funder reporting requirements at times certain staff members salaries may become public. Controls 1. A staff member s initial compensation amounts are confirmed in a written employment offer signed by a designated authorizer of the organization. Any subsequent change in compensation amounts must be confirmed in a compensation change form signed by a designated authorizer and approved by the COO and/or the CEO and includes dates describing when the new rate of pay will take effect. 2. Reviews and changes to a staff member s compensation are typically made annually based on performance evaluation. 3. Pay is issued bi-weekly. If the date of pay falls on a federal/statutory/civic holiday, pay will be issued on the last business day prior to the holiday. 4. Pay is issued to staff members via check or direct deposit. 5. Eligibility for changes: all staff members are considered for increases at the time of the scheduled annual review. Pay Bands 1. EMPath maintains a system to ensure that all jobs are consistently and relatively ranked to one another, as well as equitably compensated. Each role will be benchmarked against market data and surveys available for the local market every three years, using market factors which include location, availability of qualified candidates, job title and job description. Roles that cannot be matched will be slotted based on where they sit within the organization and their respective departments. Grading matrixes are established that assist with determining level of responsibilities, skills and competencies for each role, which will correspond with established bands and best practices. 2. This system is driven by the following principles: a. Equity

3 b. American with Disabilities Act (ADA) equality c. Market competitiveness d. Skills and competencies valued by the organization 3. Established bands classifications are a tool for managing the compensation opportunities available within an organization. Pay ranges are established within the bands by role, to recognize staff members and differences in their individual contributions, roles and responsibilities within the structure of the organization. Pay ranges typically consist of a staring rate and a maximum rate of pay for a given role. The pay bands and band classifications are reviewed periodically against market and internal conditions and exceptions can be approved for local market considerations. If an inequity is shown, then compensation bands will be adjusted. Salary Types EMPath has two types of salary: Base salary Base salary is a fixed amount of money paid to a staff member by an employer in return for work performed. Base salary does not include benefits, variable pay or any other potential compensation from an employer. Variable pay Variable pay is used to compensate for additional duties outside of the regular role and is temporary in nature. Variable pay must be approved by the COO or CEO Salary Determination and Review 1. All staff members are normally paid within the set salary range for the position and role they are performing. However, some flexibility has been built in to the compensation system. a. Salary ranges below the pay band for a given position or roles are permitted under the following circumstances, 1.) the staff member has arranged to work a reduced work week (e.g. 80% week instead of 100%). in such an event, the salary will be scaled to correspond with the adjusted work week, 2.) the staff member does not meet all the skills and competencies outlined for the role, role is considered stretch role for 6 months while skill building is in place. b. Adjustments in compensation can be made to recognize growth in contribution and performance. 2. New hires will be placed within a band into which their new job is allocated according to the required skills, abilities, qualifications, experience, and anticipated contribution. 3. Staff members who change jobs within the same band will receive a salary review, but an increase in salary is not guaranteed. 4. Staff members committing to a staff development opportunity will be reviewed for temporary salary increases, but an increase in salary is not guaranteed; examples would be temporary maternity coverage for a higher level role, support to another department for a pre-determined time frame. 5. A staff member who is promoted into a higher pay band will undergo a salary review and their annual review as well. Annual changes in compensation will be reset to align with their promotion date. Noncompetitive promotion-related salary increases (caused by a change in role description and/or organizational need) must be approved by departmental VP and signed off on by COO or CEO prior to discussion with the staff member. 6. A staff member who moves to a job in a lower salary band will be evaluated and every effort will be made to protect salary whenever possible, (i.e. movement to top of band, salary freeze).

4 7. A staff member who has a change of status (i.e. from temporary to permanent) will undergo the same compensation review as would a new hire. 8. A staff member s salary may be red circled (i.e. frozen) as a result of the salary being above the band for the position occupied. This can result from temporary or permanent reassignment or reclassification, length of service in role, demotion, restructure, job re-evaluation, or performance. 9. Individual compensation rates will be reviewed annually against the appropriate pay band in association with performance appraisal. Typically, merit or equity-based compensation adjustments will be made at this time if appropriate. 10. Requests for changes in compensation of any type to include merit adjustments must be signed off on by the VP of the department (if outside the annual established %) prior to any discussion or commitment with the staff member, and then forwarded to the CFO for final coordination. 11. Changes in a given staff member s compensation are effective at the time the person is to commence new duties, or the day following the last day in the old role. 12. Compensation changes will appear on the first paycheck after the information has been entered into the payroll system. 13. Retroactive pay increases may be required if they pre-date the current pay period. Lump sum retroactive pay amounts will appear on the first paycheck after the request has been processed.

5 Appendix A: Assistant Vice President, Vice President and Officers Compensation The senior management team salary is negotiated individually based on the scope and responsibility as well as the experience level the organization is seeking for the role, using the same best practices as outline in the organization s compensation policy. The senior management salary will be benchmarked a minimum of every three years and recommended change to the salary will be discussed with the COO and the CEO prior to any changes being approved. Chief Executive Officer Compensation The CEO salary is set and approved by the board using the same practices as outlined in the organization s compensation policy. The CEO s salary will be benchmarked at a minimum of every two years and any recommended changes to the CEO s salary will be submitted by the Chairman to an ad hoc compensation committee. The CEO s performance is annually discussed and the salary is annually voted on by the full board.