03/22/2013
Policies & Procedures
Policy Name:
Approved by:
(Rev: 11/14/13)
Funding Personnel Actions
Date Approved:
Purpose:
All employees hired by the University have a budget assigned to their position number
which matches their wages and benefits. Various funding actions are identified and
matched with their appropriate funding sources in the budget.
Procedures:
The University’s budget process identifies a few funding sources that cover various
personnel actions.
1. President’s discretionary fund:
 The President’s discretionary fund is used at the President’s discretion and
requires her/his approval. Refer to the “forms” tab on the University
Budget website for the relevant approval form which will guide you
through the process of requesting use of the President’s discretionary fund.
2. Preliminary commitments:
 Preliminary commitments are a subset of the President’s discretionary
budget. There is no budget allocated for these commitments. Preliminary
commitments are used to fund interim and working out of class
assignments as well as hiring an employee above the budgeted salary for a
specific position. As the need for such commitments is identified and
approved, they are reduced from the total budget of the President’s
discretionary funding.
 These commitments are tracked through the fiscal year, by division and
reviewed regularly by the CFO/President.
 Prior to any written or verbal offer, new hires or replacements of existing
positions over the base budget of more than $7,500 require CFO approval;
of more than $12,500 require the President’s approval.
 Working out of class pay is funded through preliminary commitments. As such,
all out of class pay actions require the President’s approval.
3. Contractual:
 This fund is a central account and is used to fund contractual increases
such as longevity, part-time lecturer longevity, step increases, band
increases, contractual bonuses, lateral bumping, faculty promotions and
across the board increases.
4.
Severance: Is funded from the severance account. (fund code G00005, organization code 125051, account code 1695) 5. Growth fund:
 The Growth fund is used at the Provost’s discretion to support academic
program growth.
6. Reorganizations: (Please use the reorganization template located in the “forms”
tab)
 Departments may decide to reorganize their position structure to better
reflect their needs. This would include examples such as reclassifying
positions, eliminating positions, replacing vacant positions with newly
created positions, etc. The President’s approval is required before any of
these actions are implemented. If the reorganization results in savings to
what is currently budgeted, the difference will become part of the
University’s contingency fund. If the reorganization proposes more costs
than are currently in the budget for positions, the department needs to go
through the normal approval path for new funding requests. Wage
increases cannot circumvent preliminary commitments, discretionary or
re-class approval process by combining it with a reorganization.
 Supervisors may not use reorganizations to justify discretionary increases
to employees. Reclassifications due to substantive changes in job
requirements are processed through the Director of Compensation.
7. Annual budget:
 The budget process can fund position actions for the upcoming year.
8. Supplies, services and maintenance (SS&M):
 Departments may use their SS&M dollars to fund an increase of less or
equal to .25 FTE. The increase should not exceed a total amount of
$30,000, inclusive of fringe benefit costs. Under no circumstances will the
use of these funds take a position from a non-benefit status to a benefit
earning status.
Note: Salary savings are defined as unpaid wages calculated when there is an interruption of pay in a permanent,
budgeted position. This occurs whenever there is a vacant or unfilled position, an employee goes on a leave without
pay, or during an interim assignment when the employee is getting paid less than the salary budget for the interim
position.
Salary savings are included in the University budget as a negative estimate to budgeted wages. Salary savings cannot
be used twice in the budget process. As salary savings occur, they are not to be viewed as additional available
resources for use in operations (exceeding controllable budgets). Refer to “Funding Sources for Personnel Actions” for
viable funding sources.
All permanent base budget adjustments must be funded on an annual basis regardless of
the effective date. {Example, Position A’s salary is $49,000 a year. If a $1,000 increase to its base is approved effective 01/01/2013, the FY13 additional budget funded will be $1,000, not $500. The full amount of $50,000 is the base budget that will roll from year to year. It reflects the actual revenue commitment to this position; the University will need to commit the full $1,000 of its revenues to cover these wages for a fiscal year.} The funding source will also bear the cost of fringe benefits associated with any salary
adjustments for any new positions added to the total general fund budget after the
Regents have approved it. The total budget for fringe benefits was not built to include
fringes for these new positions. (Note: there is no budget for Preliminary Commitments. It is tracked through the
President’s Discretionary account.)
Eastern Michigan University Funding Sources for Personnel Actions ********** Funding Sources ********** Personnel Actions Compensation Adjustments 100300 2930 President's Fund 100300 2930 Preliminary Commitments 100300 2930 ATB Growth Severance Reorganization Annual Budget 125051 1210 100300 2901 125051 1695 Faculty Part‐time lecturer longevity x Faculty/promotions x Staff Longevity (CP, PS, CC, FM, LL non‐base) x FTE increase Discretionary increases x x Interim/working out of class Bonuses x x x New hire above/below budgeted salary x New positions Gender / race equity increases x x x x x Lateral transfers (union) x Reclasses (contractual, IT) x Reclasses (non‐contractual) x Promotions (contractual) x Severances x Bumping x Step increases x Reorganization x x Healthcare (flat amount) Market adjustment ‐ contractual Market adjustment ‐ non‐
contractual x x x Supervisor/subordinate inequity x Pay compression x Definitions:
Bonuses (coaches and academic APs): Hiring bonuses are used rarely. A new hire may
receive a recruitment bonus as part of the offer letter. The bonus amount is paid in two
increments, six months and then one year after employment. A current employee may
receive a retention bonus as part of a special salary adjustment or as a lump sum
payment. Bumping: Certain bargaining units have bumping rights where a union member
has the right to get into a job held by another union member with a lower seniority level.
Discretionary increases: Discretionary increases are permanent base salary
adjustments for certain employment classifications.
FTE increases: FTE increases are permanent increases to base salary associated
with an appointment percentage change.
Gender/race equity increases: Compensation analyses are conducted
periodically to ensure that pay is market competitive (external equity) and paid
consistently across similar positions, regardless of gender and race differences (internal
equity). The analysis may result in gender/race equity increases.
Healthcare: Union contracts may dictate an increase (flat amount) in base
salaries of its members to help offset the cost of healthcare. In addition, the union may
also dictate a flat rate increase that is not added to their members’ base salaries, to help
offset healthcare costs.
Interim appointments: Interim assignments should generally last for less than
one-year while the replacement candidate search is underway. Salary may increase to the
minimum of the learning, competitive, or expert broadband range based on market
considerations, candidate qualifications, experience, and internal equity factors. The
employee will move to the position related to the interim assignment. When the interim
assignment is concluding, the employee will return to his/her old position and rate of pay
when they left the previous position plus any adjustments they would have received had
they not been performing in that interim role.
Lateral transfer: There may be times when an employee voluntarily moves from
one job to another; both of which are in the same range. This is considered a lateral
transfer and no adjustment to base pay shall be granted.
Longevity (part‐time lecturers non‐base, PTs ‐ base, FM’s non‐base): Longevity payment criteria,
amount, and pay practice are outlined in the respective collective bargaining agreement.
Longevity payments can either be applied directly to the base salary or lump-sum
payment not applied to base.
Market adjustment (contractual): Market adjustments are designed to address
positional market alignment, recruitment ability, and retention issues due to the growth of
the market. A market reference point is assigned annually to each position based on
benchmarked comparable positions. An employee’s salary within the market salary range
is dependent on individual pay factors including qualifications and years of experience.
Pay compression: Pay compression can be defined as pay differentials that are
too small to be considered equitable. The term may apply to differences between the pay
of a supervisor and subordinates.
Promotions (includes faculty promotions): Promotions include competitive recruitment
hiring processes and non-competitive contractual increases. Promotional increases,
criteria, and pay practice are outlined in the Compensation Philosophy and in respective
collective bargaining agreement. Promotional amounts are applied directly to the base
salary.
Re-classifications: When an employee’s duties and responsibilities change
substantially over time, the job can be reclassified so that the position accurately reflects
the changed performance requirements.
Severances: Non-bargained for employees who are terminated by the University
without cause may be provided severance pay (and/or working notice in lieu of severance
pay) subject to the University’s terms and conditions.
Step increases: Contractual increases agreed upon in the union negotiations.
Supervisor/subordinate inequity: When a subordinate is paid more than or
equal to his/her supervisor
Working out of class pay: Working out of class are temporary base salary
adjustments. When an employee is working out of class, they remain in their home
position. Criteria, amount, and pay practice are outlined in the respective collective
bargaining agreement.