Compensation Standards and Practices

At The University of Texas at Dallas, compensation decisions are a collaborative effort between the hiring manager or supervisor, responsible higher-level administrators, and Human Resources.

Implementation of consistent and appropriate practices are instrumental to our ability to attract, motivate, and retain qualified employees, and to ensure compliance with appropriate rules, regulations, and laws. The success of our compensation program hinges on our ability to appropriately compete with external labor markets, to recognize and reward exceptional performance, and to maintain a shared sense of internal equity and fairness.

The Office of Human Resources is responsible for the administration of the program; however, every employee and manager has a responsibility to ensure the success of the program. In accordance with federal guidelines, enforced by the Equal Employment Opportunity Commission (EEOC), it is unlawful to knowingly or unknowingly discriminate in pay or application of employment practices, and therefore all salary decisions must be made without regard to race, color, religion, sex, national origin, age or disability. In addition, UT Dallas policy prohibits discrimination based on gender expression or gender identity.

The Human Resources team is responsible for managing the campus-wide processes for UT Dallas’ hiring and compensation practices, performance management, review of promotional opportunities, and for providing assistance to non-faculty staff. The Office of the Provost is responsible for all faculty hiring and compensation decisions, though much of the hiring, performance assessment, and compensation decisions are made at the level of the academic schools by deans or their designees. The principles described herein apply explicitly to all non-faculty staff, but, in some cases, apply implicitly to faculty, as well. For example, the guidelines regarding merit-based salary adjustments, one-time merit awards, market-based adjustments, and compression or inversion issues are equally applicable to faculty and staff. Further, institutional equity and fairness issues are also equally applicable, though partially separated administratively. For additional information or assistance with hiring and compensation matters, please contact the Employment Services team in the Office of Human Resources.

Determining Pay

Salary Ranges and Quartiles

A salary range is an established range of pay organized into salary grades. Each job is assigned a salary grade that represents employees performing similar work utilizing similar knowledge, skills and abilities. Since employees have different levels of experience and education, we utilize quartiles to determine where an employee should be placed in the salary range.

First Quartile

The first quartile of the range is usually intended for employees who are new to the grade, are in a learning situation, and/or do not have substantial experience in the new position.

Second Quartile

The second quartile of the range is intended for employees who have gained experience and skill and who are becoming more proficient in the position for which they were hired.

Midpoint

The midpoint represents the market rate for this position, and represents fully experienced employee at that level.

Third Quartile

The third quartile is typically reserved for experienced employees who perform all tasks independently and consistently exceeds expectations in exhibiting the core competencies of the position.

Fourth Quartile

The fourth quartile of the range is normally reserved for individuals who are considered the subject matter expert in their position with a depth of knowledge that extends beyond their primary responsibilities.

Salary Grade*

	First Quartile	Second Quartile	Third Quartile	Fourth Quartile
Annual	$17,265 – $18,988	$18,989 – $20,711	$20,712 – $22,435	$22,436 – $24,158
Monthly	$1,439 – $1,582	$1,583 – $1,725	$1,726 – $1,869	$1,870 – $2,013
Hourly	$8.30 – $9.13	$9.14 – $9.95	$9.96 – $10.78	$10.79 – $11.61

* This example represents guidelines for salary range placement. Other factors may be considered if necessary.

How to use the salary quartiles:

• When determining pay, the employee’s knowledge and skills should be considered as they relate to the new job/duties/responsibilities, not their current position.
• The minimum of the salary range equates to the minimum qualifications required of the new job. If an employee meets only the minimum qualifications of the position, they likely should be compensated in the first quartile.
• The midpoint of the salary range is considered the market value of the position, and it is expected that the employee at this salary or above is fully productive in the position and has considerable experience in the job. Only substantial and relevant years of experience in a previous position that is directly related to the position at UT Dallas will be considered.
• Years of experience not related to the position are not considered.

View the Classified Pay Plan and Salary Guides here.

Review of Pay Equity and Market Comparison

The Human Resources compensation team is committed to ensuring fair and equitable compensation practices and maintaining competitive salaries. A review of pay equity and market comparison will be conducted on a scheduled basis to identify pay inequities. The goal of this review is to assist managers, during the budget cycle, in determining if pay adjustments are necessary to address unjustified gaps in pay or issues relating to misalignment with market-based compensation levels (especially for areas in which compensation levels are changing), salary compression, or salary inversion for similarly situated employees, or gaps that may impact recruitment or retention. Additional review may be required by the Office of Institutional Equity.

Determining new hire starting salary

Using the salary range associated with the position’s job grade, all new starting salaries will be evaluated based on their relevant knowledge, skills and experience as it relates to the minimally required knowledge, skills and experience of the position to which they are applying. In general, the starting salaries for a new hire should not exceed the midpoint of their salary range. This allows the new employee an opportunity for future growth within the salary range. Other things to consider:

• Job value: Each job is assigned a pay grade, based on the job description and the analysis of industry pay rates for similar jobs. Additional consideration may be given for jobs with hard to find skills and/or the job’s overall value to achieving the goals of the department.
• Individual value: The value that the individual applicant brings to the job based on their relevant skills and experience. Less skilled and experienced applicants should be paid lower in the range, while more skilled and experienced applicants would be paid higher in the range, though not always above the mid-point or at the max.
• Internal equity: A review of salaries of current employees in similar positions will be completed to ensure internal equity.

Any starting salary above the first quartile will require justification and review by HR/Compensation.

View the starting salary process here.

Job Changes

Promotion

When an employee moves from their current position to a different position that is assigned to a higher salary grade, this is considered a promotion. A promotion generally warrants an increase in base salary to recognize additional skills and/or responsibilities of the employee and to ensure that pay for the new position is consistent with market and internal equity. To be eligible for a promotion, an employee must:

• Be a regular full-time or part-time employee (not temporary status or in a temporary job code)
• In current position for six (6) consecutive months
• Have earned a performance rating of CM or EX
• Meets or exceeds competencies and requirements of new position

If an employee is being promoted into a position that is non-competitive (not posted), the promotion will be subject to review by Institutional Equity to ensure fairness in selection. An appropriate salary within the new salary grade will be determined based on the employee’s skill, knowledge, experience, and performance. Since circumstances that determine an employee’s pay are varied, it is important to be as consistent as possible when making pay decisions relating to promotions. Pay increases are based on several factors and will typically fall within the following ranges:

Criteria	Assessment Factors
	Modest Increase (3% – 5%)	Moderate Increase (6% – 13%)	Significant Increase (13% – 15%)
Degree of increase in responsibilities	Moderate		Significant
Current salary relative to others in the new pay grade (Internal Equity)	High		Low
Demonstrated ability to perform the duties of the new job	Consistently Demonstrates		Consistently Exceeds

A promotional increase in salary will thus consider an employee’s skill, knowledge, experience, performance, degree of increase in responsibilities, current salary relative to others in the new pay grade, and ability to perform the duties of the new job. Any promotional increase in salary above 5% will require justification and review by HR/Compensation. Any promotional increase above 15% will require additional justification, an internal equity review, and approval by the President or Provost.

View the Promotion Process here.

Lateral Transfer

While taking a different position may prepare an employee for career advancement by enabling them to broaden their skills, not all job changes will result in an increase in salary. A lateral transfer occurs when an existing employee is competitively (position was posted) selected as the most qualified candidate for an existing vacant position within the same pay grade of their current job. For a competitive (posted and selected) lateral move/transfer, a salary increase may be considered only if duties of the new position are substantially different. If an increase is approved the increase amount shall not exceed 3%. Any exception to this guideline will require additional justification, an internal equity review, and approval of the appropriate vice president.

View the Lateral Transfer Process here.

Voluntary Demotion

A voluntary demotion occurs when an existing employee applies for and is competitively selected as the most qualified candidate for an existing vacant position within a pay grade lower than their current job. Because the employee voluntarily applied for and accepted a lower graded job, the employee will not receive an increase in salary. If the employee’s current salary aligns with the internal equity of the new pay grade, the employee’s salary will not be impacted. If the employee’s current salary does not align with the internal equity of the new pay grade, the employee’s salary may be decreased. If the employee is reassigned/transferred to a position in a lower salary grade for reasons other than performance, such as a departmental re-structuring, the employee’s salary will not be decreased; however, the employee may not be eligible to receive additional pay increases until parity is reached.

View the Voluntary Demotion Process here.

Reclassifications

A reclassification may be required when there is a substantive change in the duties and responsibilities of a job that may occur due to changes in the organization, type of work, staffing requirements, technology or when the classification (title, job grade, or status) assigned to the job is incorrect based on the actual job duties. The primary goal of a reclassification is to ensure that the work being performed corresponds with the job description. As such, reclassification may or may not result in an increase or decrease in salary grade. An employee’s pay after the reclassification must fall within the newly determined salary range. Any changes in pay will be considered in relation to internal equity and external market equity; the complexity and/or scope of duties and responsibility; and how critical the skills are to the completion of department or University goals. Reclassifications will be effective as of September 1 of each fiscal year.

View the Reclassification Process here.

Salary Changes

There may be instances in which an employee’s salary may be changed without an associated change in job. Salary changes should be set to ensure that the employee is paid at least the minimum and not more than the maximum of their current pay grade range. Before determining salary changes for classified staff, one should refer to the Classified Pay Grade range. For A&P staff, one should consult with the dean and/or Provost (where applicable), or the division vice president and HR/Compensation to assist in determining salary increases that are equitable, performance-based and in alignment with department and University standards.

Annual Salary/Merit Increases

Increases in merit are considered as a part of the annual merit pay cycle and implemented during the annual operating budget planning process. The merit pool (the amount available to distribute as merit-based increase in salary or one-time merit-based awards) is dependent on the availability of funds and is determined by the President. Merit increases are performance-based increases in compensation granted to employees whose performance and productivity are sufficient to earn an increase. Merit increases are granted to those employees who consistently perform above what is normally expected and required of his or her job. An employee is eligible to receive a merit increase when:

• They have been employed in their current job for at least six (6) continuous months before the effective date of the increase.
• The effective date of a merit increase is at least six (6) months after the employee’s last salary increase unless the increase is due to a reclassification.

Annual merit increases will be effective September 1. If an employee’s current annual salary is at the maximum of the pay grade, a one-time merit payment (see below) should be made in lieu of an increase in salary. Merit increase (salary or a one-time payment) will be effective at the beginning of the new fiscal year. Written justification is required for all proposed merit increases over 5% of the employee’s current salary and must be reviewed by Human Resources prior to approval.

One-Time Merit Payments

One-time merit payments are effective at the beginning of the fiscal year (September 1) and may not exceed 5% of the employee’s current base pay (pre-September 1 rate) unless approved by the President for extraordinary circumstances. The administrative leave award for exemplary service should be used in lieu of one time merit payment for extraordinary circumstances when appropriate.

Market/Equity Adjustments

A market/equity adjustment is a change in pay rate based on internal salary parity (for example, as a result of compression or inversion) or external labor market parity. Any request for a market/equity adjustment must include a written justification and be recommended by the dean and/or Provost (where applicable), or the division vice president, and will require approval from Human Resources/Compensation. If the adjustment is greater than 10%, the adjustment must be approved by the President.

View the Market/Equity Adjustment Process here.

Counteroffers

The University normally does not counteroffer when an employee is offered a job at a higher level or a lateral position, especially when the offered job is for an internal position. However, on occasion, an external offer may be made by another employer at a slightly higher level, and it may be in the best interests of the University to counteroffer for a top performer. A counteroffer may be necessary to retain a top performer if the employee is offered a salary higher than their current pay, by another employer, to perform the same duties. The salary may be increased to match or exceed the offer. A counteroffer should not normally exceed the offered amount by more than 5%. Internal counter offers should not exceed 3% of the original offer. If the counteroffer creates inequities in pay for the department or division, an action plan must be submitted to address inequities. Pay increases to address immediate retention concerns for a top performer who has a competitive job offer will be considered and become effective the first of the following month. Factors such as internal and external market data, skill set, qualifications, and impact to campus will be considered upon a determination of an appropriate retention increase. If the job offered is at a significantly higher level — for example — moving from a non-management position into a management position, it is the policy of the University not to counteroffer. Pay increases for internal transfers to a position in the same pay grade (lateral transfer) are not typical and are discouraged.

View the Counteroffer Process here.

Applying Adjustments

Applying Compensation Adjustments

When applying several compensation adjustments, merit must always be applied to the current salary first. All other adjustments will be applied after merit. For example, if the effective date of a promotion is September 1 (the same effective date as merit), the percentage increase for merit will be applied to the current salary followed by the percentage increase for the promotion.

Over/Under Pay Range Adjustments

Occasionally, an employee’s salary may fall above or below the salary range for their pay grade. This may occur when a salary range is adjusted or when an employee’s pay actions have exceeded the range. For salaries falling under the designated pay grade, an adjustment will be necessary to ensure the employee’s salary falls within the range for the pay grade of their job. For salaries that are over the pay grade, a job audit should be completed to determine if a change in pay grade is warranted. If an adjustment needs to be made, HR Compensation will contact the supervisor/manager responsible for the position to discuss available options.

Retroactive pay

According to Article III, Sections 44, 51, and 53 of the Texas Constitution, an increase may be retroactive to the first day of the month in which final approval (from all required approvals) for the pay change is received, provided that the approval was received in the same pay cycle (i.e., an increase requested with all required approvals received anytime in November may be retroactive to November 1, but not prior to November 1). In addition, an employee may not begin working before the official start date issued by Human Resources. An administrative error in awarding a salary increase is insufficient, by itself, and may only be corrected if the error resulted in an employee not receiving an increase they are entitled to under the law. Merit increases and market adjustments are not an entitlement under the law.

Salary Processes

Starting Salary (new hires and competitive promotions)

• To initiate a request for a new starting salary for a new hire or competitive promotion, complete a Hiring Proposal.
• Refer to the salary quartiles to assist with proposing a starting salary.
• The completed forms should be routed for approval and submitted to HR via email (preferred), fax, hand delivery, or inter-office mail.
• HR/Compensation will review the proposal and the official offer of salary will be extended by the Employment Specialist. The following may be considered in the salary review:
  • Applicant’s Experience: the number of years of industry and relevant functional experience the applicant possesses at the time of application.
  • Applicant’s Education: relevant education, training and/or certifications that at least meet the minimum requirements for the job.
  • Applicant’s Salary History: the salary history in positions similar to the new position or considered as progression towards the new position, may be taken into consideration.
  • Internal equity: the skills and background of applicants should be compared to those of internal (department and division) employees performing similar work. Salary equity does not imply that all employees in similar positions who have similar years of experience and education should be paid the same salary. Recognition of varying levels of skills and performance, for example, will result in differences in salary among employees.
  • Recruitment difficulties: skills in high demand or hard-to-find areas require additional salary consideration. Factors such as the scarcity of qualified applicants, the number of rejected job offers, and the turnover rate for the position may be considered.
• When considering a new starting salary for internal applicants, it is also important to be aware of the employee’s current salary/grade to assess the potential that the new pay grade of the new position might negatively impact the employee’s current salary.
• Competitive lateral transfers and demotions should be submitted via Hiring Proposal; however, these actions may/may not result in a change in pay.

Promotion (non-competitive)

• To initiate a request for a non-competitive promotion, complete the Position Review and Request Form (PRR) and Staff Promotion Assessment Form. The Staff Promotion Assessment form assists HR with determining the impact to other employees if the position is not posted.
• Refer to the salary quartiles to assist with proposing a starting salary.
• The completed forms should be routed for approval and submitted to HR via email (preferred), fax or inter-office mail.
• The Office of Institutional Equity will be engaged if it is determined that the position should be posted to provide employees with similar knowledge, skills and abilities the opportunity to apply.
• The employee should not be informed of any change in position or title until after final approval from Compensation has been received.

Lateral Transfer (non-competitive)

• To initiate a request for a non-competitive lateral/departmental transfer, complete a PRR or ePAR. (In this case, the PRR will be substituted for the paper PAF).
• Select “Other” for the Action Request.
• The Office of Institutional Equity will be engaged if it is determined that the position should be posted to provide employees with similar knowledge, skills and abilities the opportunity to apply.
• The employee should not be informed of any change in position, pay, or title until after final approval from HR Compensation has been received.

Voluntary Demotion (non-competitive)

To initiate a request for a non-competitive demotion, please contact HR Employee Relations.

Reclassification

• The request for reclassification must be made by the supervisor/manager responsible for the position.
• To initiate a request for reclassification, complete the Position Review and Request Form (PRR) with approval signatures. If the job, to which the employee is to be reclassified, is a new position (not currently available in the UT Dallas job library), the Position Description Questionnaire (PDQ) will also need to be completed.
• The completed form should be routed for approval and submitted to HR via email (preferred), fax or inter-office mail.
• HR/Compensation will review the PRR and PDQ to determine if the job requires reclassification. If the job is to be reclassified, a job audit will be conducted that will include a review of the duties, pay grade and FLSA status. This review can take up to 30 business days to complete depending on the complexity of the reclassification. HR will contact the responsible manager to discuss the outcome of the review and communicate the next steps.

Market/Equity Adjustment

• The request for reclassification must be made by the supervisor/manager responsible for the position.
• To initiate a request for reclassification, complete the Position Review and Request Form (PRR) with approval signatures.
• HR/Compensation will review internal and external equity.
• HR will contact the responsible manager to discuss the outcome of the review and communicate the next steps.

Counteroffer

If the requested salary increase is for a counteroffer, the justification must include a copy of the job offer. Once this action has been approved, an ePAR/PAF must be submitted to complete the change. To initiate a request for a counteroffer, please contact HR Employment Services.

Definitions

Internal Equity

Internal equity is an assessment that attempts to identify and address inequities in compensation between employees who are considered similarly situated and are performing similarly. Internal equity does not attempt to make pay exactly the same for employees simply because they are in the same job title, but rather considers the similarities and dissimilarities in experience, skills, abilities and record of job performance, and aligns the pay fairly and equitably based on those factors.

External Market Equity

The review of external market equity is an assessment that attempts to align University salaries with the external market compensation for the same duties. External market equity is used as a retention tool, as well as a means to ensure competitiveness in pay practices. External market equity is not used solely to match market pay, but rather provides guidance on when it is most appropriate to lag, match, or lead the market based on budget, availability of skill and mission critical jobs. Market equity assessments can be complex when individual job variables such as expectations for travel, fund-raising requirements, or work outside of normal work hours enter into the evaluation.

Job Movement

Job movement occurs when an employee moves from their current position to a new position in the same or different department or division.

Salary Compression

Salary compression occurs when salaries of newly hired individuals become minimally differentiated from those of more experienced personnel. Using the quartile approach mentioned above, if the first and fourth quartile are essentially the same, salaries have become compressed. Salary compression can occur in fields where entry-level salaries rise more rapidly that salaries in general, forcing the compression through rise in first-quartile compensation levels. The issue is normally addressed by adjusting the salaries of more experienced personnel upward to provide a reasonable spread.

Salary Inversion

Salary inversion is an extreme variant of salary compression in which newly hired individuals have a salary greater than similarly situated, more experienced personnel. Inversion can occur in “hot areas” in which entry-level salaries are rising so rapidly that they exceed the salaries of experienced personnel already at the institution. The situation is often complicated by the fact that the “hot area” is unlike any existing areas and, thus, identifying similarly situated personnel can be difficult. The solution to salary inversion issues is the same as that of salary compression, i.e., raising salaries of current personnel to more appropriately reflect an individual’s experience and skills in the “hot area”.