Compensation

The optimal rate of pay at hire takes into consideration the following factors:

• The position’s Market Reference Range (“MRR”).
• An assessment of attained capabilities relative to the position requirements.
• A projection of the number of years required to attain performance expectations given current capabilities.  

Consideration must also be given to the availability of funds within the division budget and the labor market. The University’s Market Reference Ranges are sufficiently broad to support pay decisions that are market competitive. Each Market Reference Range includes five anchoring pay rates that can assist managers in establishing pay rates for their new staff employee:

Minimum: The lowest rate observed in the market below which no employee in the MRR is to be paid. Paying at, or moderately above, the range minimum may be appropriate only for those who meet only the minimum requirements of the position.

1st Quartile: The rate of pay halfway between minimum and midpoint. A pay rate at or near the 1st Quartile may be appropriate for new hires with developing capabilities but who will most likely require 2-4 years to be judged fully capable of performing at expectations.

Midpoint: The rate of pay equivalent to market median. Pay at or near the range midpoint may be appropriate for those with directly relevant experience and capabilities and who are expected to immediately and consistently perform at position expectations.

3rd Quartile and Maximum: Infrequently, a decision to establish the pay rate above midpoint may be made. Such rates are beyond the market competitive rate, as represented by Midpoint, but reflect uncommon capabilities that significantly exceed position requirements and that benefit the University. In no event will the starting salary exceed the maximum of the Market Reference Range.

A review of pay rates within the work group is recommended as a final step in establishing pay at hire. Human Resources assists by further comparing the recommended rate to those performing similar work across the University. The hiring manager consults with division/department leadership and Human Resources when establishing pay rates at hire.

A Promotion is defined as elevation to a new position with essential responsibilities that are significantly greater than the current position and a higher Market Reference Range. The pay rate is adjusted on the date of promotion by a rate of 5% minimum. The actual adjustment rate may be higher based on the following factors.

• Current pay rate relative to the new position’s Market Reference Range.
• An assessment of attained capabilities compared to the essential requirements of the new position. Typically, someone who is being promoted will be judged to be developing toward the requirements of the position and the recommended pay rate will reflect this assessment.
• Availability of funds within the cost center or college/school/division.

When the promotion occurs at the same time as an annual merit review the promotional increase will be no less than the increase earned for performance in the review year. The actual increase may be greater based on the guidelines stated above.

Division management consults with Human Resources on all aspects of a planned promotion including appropriateness of the action and pay.

A staff employee may voluntarily transfer to a staff position assigned to a lower Market Reference Range to redirect the path of his or her career. It may be appropriate to reduce the employee’s pay rate as of the transfer date depending on the following factors:

• Current pay rate relative to the new position’s Market Reference Range.
• An assessment of attained capabilities compared to the essential requirements of the new position.
• Availability of funds within the cost center or college/school/division.

Consideration should be given to the additional capabilities that the employee offers in the new position including depth of familiarity with university systems, procedures and people as well as breadth of University experience. It may be reasonable to expect a minimal development period to reach the full expectations of the position. Therefore, pay at or even above the Market Reference Range midpoint may be acceptable.

1. What is a merit-based pay system and how does it work?

Our pay program provides a financial incentive to meet or exceed the requirements of the job and to focus on activities that best support our mission and align with priorities of the University and the division/department.

• In a merit-based pay system each eligible employee receives an increase in pay based primarily on these factors:
• Your contributions during the fiscal year review period, and
• Your current pay rate compared to the market reference range midpoint for your position.

Division leaders allocate increases among faculty and staff from a pool of dollars made available from the University’s annual budget. HR provides guidelines to help differentiate increases for faculty and staff while also ensuring a level of consistency from group to group.

2. What is the market target? What is the market median?

The University has established an objective (or target) for its faculty and staff pay programs where on average, our pay is at a level that is comparable to the median within the identified market comparator group. The median is the middle number in a range of numbers arranged from ascending or descending order. Most organizations use the median in determining the midpoint for a pay range that represents a specific discipline or a group of similar positions. We use the median rather than the mean, or average, because the median is much more representative of the central tendency of the data. Averages are generally not used due to the influence of extreme highs and lows in the data.

3. Is the uniform base pay adjustment a cost of living (cola) increase? Why doesn’t SU have a cola system?

The uniform base pay adjustment was planned as a one-time event for this year in recognition of the extremely unusual circumstances around the pandemic while a COLA is a pay system that utilizes across the board increases tied to a cost-of-living index. SU adopted a merit-based pay system several years ago in recognition that a system where everyone receives the same percent of pay regardless of contribution does not sufficiently recognize and reward individual achievement.

4. Will everyone get a market equity adjustment this pay cycle?

While the board approved funding to address market equity, it will be prioritized to address those employees who fall farthest below the market median starting with those who may being falling below the current minimum established for their position. This means that not every employee will receive an equity adjustment in this pay cycle.

5. How does Seattle University know what the market is for a position?

Seattle University participates in a number of national and local compensation surveys to establish benchmarks.