Compensation Review Process
Each year, the pay levels for all full- and part-time staff and faculty members at Carnegie Mellon are reviewed. The review process ensures that pay increases are distributed in an equitable manner and that pay increase guidelines are followed.
Pay Increase Guidelines
The pay increase guidelines are established by the president, provost, deans and vice presidents each year. The guidelines are distributed in May as part of the compensation review process. These guidelines establish pool increase percentages, time frames for review, the recommended range for increases, and the staff pay schedule for the upcoming fiscal year.
Once distributed to the deans, vice presidents and institute directors, the guidelines are available to managers through Human Resources.
Equitable distribution of the pay increases is achieved through monitoring pay increase averages compared to the pool amounts. The total average increase for a department or division should not exceed the allotted increase percentage per pool.
Basis for Pay Increases
Pay increases are a way of communicating to an employee the value of their performance level over the past year. Carnegie Mellon does not provide annual Cost of Living Allowance raises, and no employee is automatically entitled to a pay increase.
Pay increases should be based upon and supported by an annual performance review, feedback sessions and other documentation. Performance should be evaluated against established criteria. Key contributions to the department should also be considered.
- A recommended increase is advised for most individuals performing at expectation.
- Poor performers should receive minimal increases or no increase at all.
- Employees performing at exceptional levels should be rewarded with larger raises.
In addition to the value of the employee’s contributions and performance to the department/group, other criteria to consider when making a recommendation include:
- Internal pay equity: Are employees with similar jobs, performance and experience making similar amounts? Have market conditions led to hiring new employees at higher salary levels? Are the pay levels of women and/or minorities consistent with others in the department who have similar qualifications, years of service, and duties?
- External pay equity: Do competitors pay significantly more for similar jobs, including benefits and other rewards of working at Carnegie Mellon? Are you experiencing high turnover due to people leaving for other jobs?
- Employee potential: Does the employee have the willingness and ability to assume greater responsibilities? This should be rewarded and encouraged — we do not want to lose motivated employees who have the potential to be university leaders.
- Criticality of skills: Does your employee possess skills, competencies or relationships that are critical to achieving your goals? How difficult is it to find someone with the necessary combinations of knowledge and abilities? Is this employee indispensable?
- Form of rewards: Good performance does not need to be rewarded only with an increase in base salary. Consider whether other rewards may be appropriate, such as taking the employee out to lunch, having a recognition event in the department, nominating the employee for an Andy Award or celebrating the employee in other ways.
Communicating Pay Decisions
Pay recommendations should not be discussed with individual employees until formal approval is received from the president and provost. After approval has been received, and before July 1, all individuals should be informed of the decision made in their case, preferably in writing or at a private meeting.
The pay decision should not come as a great surprise to your employees. Continuous feedback and their performance reviews should give them a good idea of what to expect. It is important that employees clearly see the relationship between their performance review and the size of their pay increase. They should also understand other factors that contributed to the decision.
The overriding goals in communicating pay decisions are that:
- The employee believes that their pay is fair, equitable and a reward for their performance
- The employee is told the reasoning behind the pay decision
- The employee is told exactly where they stand
After the appropriate compensation conversations, future discussions should follow where you set goals, discuss ongoing actions and provide feedback.