Merit and Bonus Guidelines for FY2009

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Merit and Bonus Guidelines for FY2009

• Compensation Team
• April 14, 2008

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Agenda

• Fiscal 2009 annual increase and bonus guidelines
• Fiscal 2009 compensation/reappointment submission
  process overview and schedule
• Performance management update by Learning
  Organizational Development

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Two Components of Compensation

• Two Components to FY2009 Annual Increase Process
• 3.5 merit pool incremental add to base salary,
  as historically done. Merit pools will be
  calculated on the sum total of a school or
  administrative units base salaries for eligible,
  continuing employees as of April 30, 2008,
  multiplied by 3.5 (excluding vacancies).
• 0.5 bonus pool bonus pools will be calculated
  as 0.5 of the sum total of a school or
  administrative units base salaries of eligible,
  continuing employees as of April 30, 2008,
  multiplied by 3.5 (excluding vacancies).
  University Administrative units will be
  consolidated at the level of Senior Vice
  President/Senior Vice Provost (SVPs) or higher.
• Human Resources will provide these pool
  calculations, which are fixed for the duration of
  the AMI/Bonus cycle.

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AMI Bonus Pool Budget and Calculations

• The Budget Office estimates the funding that is
  required in each school or unit to meet the AMI
  and bonus guidelines. The actual AMI and bonus
  pools that are calculated by the Human Resources
  Office may be greater or less than the Budget
  Office estimates.
• Schools and units are responsible for funding any
  shortfall between the budget allocation and the
  HR calculated pools.
• The maximum amounts that are available for AMI
  and bonuses are calculated and reported by Human
  Resources. Note that the budget estimates
  provided by the Budget Office do not govern the
  maximum pools that are available to units.
• You cannot overspend your pool. Human Resources
  will advise units exceeding their pool to revise
  their AMI/Bonus submissions.
• Schools may use undesignated funds to supplement
  bonus pools for staff paid from designated funds
  only to the extent the designated funds are
  insufficient to pay the bonus.

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Performance Ratings

• Last year we developed a University-wide
  Performance Rating framework for distributing
  merit increases and bonuses.
• We are continuing the same rating program this
  year, but we have modified the definitions
• Regardless of the performance management system
  that you use, we ask you to make performance
  distinctions, using the following rating scale.

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Merit Increase/Bonus Performance Matrix
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FY2008 Ratings Distribution Curve
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Performance Differentiation How did we do?
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FY09 Annual Increase Program
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FY2009 AMI Eligibility Guidelines

• Code 100/110 Administrative/Professional
  employees (and those hired, transferred or
  promoted into these codes) before May 1, 2008.
• Code 102 and non-union code 112 Full-time and
  part-time faculty
• (Note increases for code 112 faculty covered by
  the UAW agreement are subject to the terms of
  that agreement.)
• Code 103/113 Research/Training Staff
• Code 106/116 Non-union clerical (those
  employees not covered by a collective bargaining
  agreement)
• (Note non-union service (or parity) employees
  (code 107/117) are not eligible for the 3.5
  merit pool and will continue to receive parity
  increases.)
• Eligible employees promoted or reclassified
  during this fiscal year will continue to be
  considered for a September 1, 2008 AMI (includes
  codes 104/106/107 employees promoted to code
  100/110 roles).

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FY2009 AMI Eligibility Guidelines (Contd)
Pro-Rated Increases

• Employees hired on or after May 1, 2008 are
  eligible for an increase in September 2009. This
  increase can be pro-rated for additional months
  worked, provided employees have a satisfactory
  attendance rating and are in good standing
  relative to performance. Example of a pro-rated
  AMI
• New hires from October through May should also be
  pro-rated and receive less than the full 3.5 for
  not having worked the full year, per discretion
  of HRO Department Head.
• Pro-rated increases are not intended to impact
  your current merit pool. Our recommendation is to
  award a pro-rated AMI/Other Adjustment
  combination (e.g., market/equity adjustment).

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FY2009 AMI Administrative Guidelines

• Performance ratings are required for all AMI
  eligible employees.
• Managers and HROs will need to translate employee
  ratings to the rating scale provided in the AMI
  application for consistency across business
  units.
• All HROs should plan as best as possible to
  submit salary changes, promotions and upgrades by
  July 1st to facilitate optimal AMI process.
• Salary increases will not be made retroactive to
  the prior fiscal year.

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FY 09 Other Base Pay Adjustments
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FY 09 Other Base Pay Adjustments Eligibility
Guidelines

• Other base pay adjustments (increases other than
  Annual Merit Increases) apply to all schools,
  auxiliary services and administrative units.
• Other base pay adjustments include promotions,
  equity adjustments and upgrades
• Promotions A promotion occurs when an employee
  moves from a lower to a higher level position
  within the University in the same or different
  unit
• Salary Adjustments (Internal External Equity)
  Internal equity adjustments may be used to
  address salary inequities among individuals who
  are functioning in like positions that require
  similar skills, responsibilities and experience.
  Market (external equity) adjustments are used to
  align pay with the external market
• Upgrades An upgrade occurs when an employees
  current position is re-classified to a higher
  level based on increased responsibilities
• Other Adjustments apply to all full-time and
  part-time, Code 100/110, 104/114, 106/116,
  107/117 employees.

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FY2009 Other Base Pay Adjustments Administrative
Guidelines

• Other base pay adjustments require the review and
  approval of the appropriate Unit Head and the
  Compensation Department.
• There will be an established dollar limit for
  other base pay adjustments for staff/administrativ
  e positions in FY09 we will be communicating
  this percentage in the near future.

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FY09 Annual Bonus Spot Bonus Programs
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Annual Bonus/Spot Bonus Plan Eligibility
Guidelines

• The bonus pool is divided into two components
• Annual Bonus to be paid on October 2, 2008 for
  significant contribution and business unit impact
  or the achievement of goals and objectives over a
  one year period.
• Spot Bonus to be paid throughout the year
  (September 1, 2008 through August 31, 2009) for a
  single instance of superior performance or
  exemplary behaviors.
• Applies to all schools, auxiliary services and
  administrative units.
• The annual bonus and spot bonus plans do not
  apply to faculty positions, union employees,
  contractors or members of the ULT.

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Annual Bonus Plan/Spot Bonus Plan Eligibility
Guidelines (Contd)

• Eligible employees (as outlined within this
  presentation) should have a satisfactory
  attendance record and be in good standing.
• To receive a bonus payment, an employee must be
  on the payroll the date the bonus is paid.
• An employee who is eligible for a bonus but is
  absent due to a leave at the time the bonus is
  paid, will be paid the bonus upon return from
  leave.
• In the case of employees who are employed for
  less than a full 12 months due to illness, date
  of hire, or leaves, the award shall be prorated
  to reflect the proportion of time actually
  employed.

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Annual Bonus/Spot Bonus How You May Distribute
the s

• Schools and units may distribute bonus dollars in
  the following manner
• All annual bonuses
• All spot bonuses
• Traditional split of annual/spot bonuses
  proportion of funds for each to be determined by
  individual school/administrative unit
• No requirement to obtain approval on plans from
  Mssrs. McLaughlin and Alfano
• You cannot overspend your pool and bonus dollars
  can not be used for increases to base salary.
• Monies are to be given out based on performance
  (generally top 20 of population)

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FY09 Annual Bonus Program
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FY2009 Annual Bonus Plan Administrative Guidelines

• Employees hired after May 1, 2008 are eligible
  for annual bonus in October 2009.
• Annual bonus plan applies to all full-time and
  part-time employees, including non-exempt/non-unio
  n employees, except for members of the ULT.
• Annual bonus payout should be not less than
  1,000.
• Performance ratings and VP or Dean approval are
  required for all employees recommended for a
  bonus.
• Report of all annual bonus-eligible employees
  will be available to all schools and
  administrative units within the new online AMI
  application in early June.
• Only top performers should be paid bonuses.
  Therefore, it is the responsibility of each unit
  to identify (through respective performance
  management process) up to their top 20 high
  performers and distribute available bonus dollars
  accordingly.
• Bonuses can be input within the new online
  application along with your units AMIs.
• Bonus checks will be made available in the same
  manner as the employees current paychecks (e.g.,
  live check or direct deposit).

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Code 103/113 Annual Bonus

• Code 103/113 employees are also bonus-eligible
  according to University criteria.
• Since such staff members are entirely paid from
  external grants, any bonuses that are awarded
  should be funded from the employee's respective
  grants there is no common pool available for
  this category of bonuses.
• Please contact Peter Gonzalez at x82275 or
  peter.gonzalez_at_nyu.edu if you have any questions.

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Sample Criteria for Awarding Annual Bonuses

• The achievement of goals, objectives and
  sustained performance over a one year period.
  These contributions and goals could include any
  or all of the following
• Completion of a critical project early and/or
  under budget.
• Identification of a process improvement or cost
  savings for the unit or university.
• Making a key contribution as part of a
  successful team or task force.

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Annual Bonus - How did we do?
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FY09 Spot Bonus Program
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Spot Bonus Administrative Guidelines

• Spot bonus plan applies to all full-time and
  part-time employees, including non-exempt/non-unio
  n employees, except for members of the ULT,
  regardless of hire date.
• These bonuses are given on the spot and provide
  immediate recognition for a special achievement.
• These special bonuses can be awarded at any time
  during the year at the discretion of the
  department head and it is suggested that the
  unit director consult with their VP or Dean on
  appropriateness and size.
• Size of special bonus awards--recommended range
  250 - 2,500. Keep in mind that with the reduced
  pool, larger awards reduce the number of
  recipients.
• Number of spot bonuses payable to one person in
  one fiscal year Maximum of two.
• Spot bonus payouts should be submitted through
  the PASS application.

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Sample Criteria for awarding Spot Bonuses

• Specific Criteria
• One-time noteworthy achievements which may not
  meet the criteria for an annual bonus or
  temporary salary increase (for example,
  completion of a project milestone).
• Accomplishments in small special projects of a
  short duration.

• Spot Bonuses should be seen as being on a
  continuum, with greater achievement earning
  greater reward.

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Spot Bonus How did we do?

• 130 Spot Bonus approved from September through
  April
• Average Amount 1,000
• Most Common Spot Award Reasons
• Implemented new system to streamline a process
• Revamped a process with great results for client
• Developed/expanded a program or special event
• Team leader or key player for major project with
  great results
• Superior customer service
• Exceptional effort, going above and beyond
  during critical transition or in absence of
  colleagues

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Recommended Communications

• Units should announce the AMI and Bonus Programs
  and can do that in one of several ways, e.g., a
  letter from the Dean or VP to each business unit
  head who can meet with their groups to announce
  the programs letter from the Dean or VP to each
  employee announcing the program.
• Deans, VPs, or designated department heads should
  distribute a memo to each employee in their
  respective unit, indicating new fiscal year base
  salary and annual bonus, if applicable.
• Deans, VPs, or designated department heads should
  also hold 11 meetings with employees to discuss
  memo contents, performance/accomplishments and
  goals for upcoming 2009 academic year.

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FY2009 Annual Increase and Bonus Plan
Information Session

• Compensation will be hosting several information
  sessions to explain the FY2009 annual increase
  program and bonus plan guidelines. We encourage
  all Human Resources Officers and their
  professional staff to attend one of these
  sessions as we kick-off this years AMI and bonus
  programs. Finance Officers and their
  professional staff are also invited to attend.
• Training will be held at 7 East 12th Street
• Email compensation_at_nyu.edu to confirm your
  attendance.
• We look forward to seeing you at one of these
  sessions.

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Questions

• If you have any questions, please call
• Mike Camuso, Director Compensation _at_ x81261
• Marina Kartanos, Manager, Compensation _at_ x89071
• Tara OBoyle, Manager, Compensation _at_ x81266
• Andrea Williams, Senior Compensation Analyst _at_
  x81267

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APPENDICES

• Appendix A AMI/Bonus SummaryAppendix B
  Screen Shot AMI/Reappointment Request
• Appendix C Screen Shot Administer Employee
  Bonuses
• Appendix D AMI/Bonus Schedule
• Appendix E Annual Bonus Logistical Information
• Appendix F AMI Bonus Eligibility by Object
  Code

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Appendix A AMI/Bonus Summary
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Appendix B webAMI 2009 AMI/Reappointment
Request
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Appendix C webAMI 2009 Administer Employee
Bonuses
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Appendix D AMI/Bonus Schedule
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Appendix D AMI/Bonus Schedule
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Appendix E Annual Bonus Logistical Information

• Annual bonuses will be made available in the same
  manner as employees current paycheck (e.g., live
  check or direct deposit).
• Checks and hard copy advices will be available to
  be picked up at noon on October 1, 2008.
• Online pay advice will be posted to NYUHome and
  notifications will be released at 1000am October
  2, 2008.
• Annual bonuses will be taxed at the following
  rates
• Federal - 25
• State - 7.35
• City 4 (if applicable)
• FICA/Medicare 7.65 - Exception is if an employee
  has reached the maximum FICA amount for the year
  if so, taxable rate is 1.45 (which is just
  Medicare portion).
• Employee contributions to the 403(b) Retirement
  Plan or the 457 (b) Deferred Compensation Plan
  will not be taken from bonus payments. Employees
  who wish to tax defer all or part of their bonus
  can increase their contribution amount to those
  plans from remaining future paychecks up to the
  IRS maximums in effect for the year in which the
  bonus is received. Employees should contact the
  Benefits Office or go online and submit a revised
  Salary Reduction Agreement.
• Use the following account codes that have been
  assigned by the Budget Office
• Annual Bonuses 51155
• Spot Bonuses 51156
• Any additional questions on where to charge bonus
  awards should be directed to the Budget Office.

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Appendix F AMI Bonus Eligibility by Object Code
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Appendix F AMI Bonus Eligibility by Object Code