Compensation Policy and Practices

The objective of Emerson’s compensation system is to provide a means to assist in recruiting and retaining employees. It seeks to establish a salary structure that is competitive with the labor markets in which Emerson recruits talented employees, reflects the value of positions to Emerson as determined by a job review which takes in to account the duties and level of responsibility of each job and supports fair and equitable pay practices.

Objectives

1. To ensure a pay philosophy that is reflective of the values and goals of Emerson.
2. To provide a rational basis for making pay decisions and thereby establishing internal fairness and equity.
3. To maintain competitiveness with labor markets from which employees are recruited.
4. To clarify the knowledge, skills and abilities (“KSAs”) required to competently perform the position and aid in the development of career paths.
5. To establish job titles and descriptions using consistent principles applied throughout Emerson
6. To ensure Emerson’s financial resources are used in the most effective and efficient manner.

The Human Resources’ Compensation team is responsible for the administration and maintenance of the compensation system. These responsibilities include assignment of proposed new jobs to salary grades, reassignment of existing jobs to salary grades, preparation and maintenance of job descriptions, review and approval of pay adjustments and maintenance and updating of pay structures.

Assignment of a New Job to a Salary Grade

Compensation is responsible for the assessment of proposed new positions and subsequent assignment to a salary grade. All jobs will be assessed according to Emerson’s compensation system based on published salary data and internal comparable value. This system establishes a consistent basis for measuring and ranking the relative market pay of each job.

Assignment of New Positions to a Salary Grade Procedures

1. Following approval to create a new position, the department manager, or a designee, drafts a job description describing the duties and qualifications to be assigned to the position.
2. The department manager submits the job description through their Human Resources Business Partner (HRBP) to Compensation for review and assessment.
3. All new and existing jobs are assigned to a salary grade based on market data either determined by published salary survey data and/or Emerson’s determination of relative comparable positions. The first step is to determine if market pay information exists for the job in published salary surveys. Compensation will compare job duties and responsibilities noted on the job description to the definitions found in both published and proprietary salary surveys. The job will be assigned to the appropriate salary grade by comparing the salary survey data to the midpoints of the salary grades.
4. If the job does not sufficiently match a salary survey definition, it is compared to other jobs within the department and/or College. This is accomplished by evaluating and ranking the position based upon an assessment of the duties and responsibilities of the position and in consultation with the department manager, confirming the position title and assigning a salary grade.
5. The department manager is notified in writing of the position title and salary grade assignment after which the position can be posted and recruitment for the vacancy may begin. The assigned pay grade provides a spread from a minimum to a maximum rate. New employee compensation within any salary grade is based on duties, responsibilities, required qualifications, experience and external market factors.

Requested Review of a Job's Salary Grade Assignment

A job reassignment occurs when a job is moved to a different grade because the essential job functions have significantly changed. Department managers and employees may request a review of the evaluation of their job no more than once in a 15-month period. Specific requests to Compensation must be approved by the employee’s department manager and routed through the Human Resources Business Partner for that department.

Reassignment of an Existing Position Procedures

1. A review of a position is warranted when there has been a material, significant and permanent change in job duties. The direct supervisor or department manager is responsible for recognizing with the employee when such job changes occur.
2. When the supervisor and department manager conclude that a material, significant, and permanent change in job duties has occurred, a new job description should be completed by the employee, reviewed by the supervisor and sent through administrative channels to HR and Compensation.
3. Upon receipt of a newly completed job description, an assessment of the duties and responsibilities of the position will be made using a review of internal comparable jobs and a review of published and proprietary salary surveys. This process may include an interview with the employee and/or supervisor. Following this evaluation, Compensation will determine if the job grade should remain as presently assigned or if a new assignment is appropriate. The department manager is notified in writing of the results.
4. If, upon the evaluation of a job, it is determined that a job is still within the same salary grade, no salary adjustment will be made. In the instance where an employee's job is reassigned to a lower salary grade, the employee’s salary will not be changed; however, the reclassified grade maximum will define the limit of future pay increases. In the instance where an employee's job is reassigned to a higher salary grade, the employee's pay shall be adjusted by ten percent (10%) or to the minimum of the new salary grade. If there are other staff in the same job, with the same knowledge, skills, abilities, experience and qualifications, each will be reviewed to ensure internal equity is maintained. This applies to both an increase or decrease in grade for the job reviewed.

Establishing Initial Pay for Prospective New Hires

It is the goal of Emerson to offer wages that attract the best possible employees. It is also the goal of Emerson to ensure pay fairness among employees within similar job titles. Therefore, a new employee’s initial pay should be set in consideration of the candidate's qualifications as defined by the job requirements, the pay of other similarly employed individuals, the pay and pay scales of supervised employees, and external market factors.

Typically, the initial wage should be set between the minimum and the midpoint of the salary grade. Exceptions to this policy may be made in cases with unusual circumstances such as where market conditions prohibit hiring within the authorized hiring grade. In advance of any offer, all requests for exceptions must be submitted to Compensation in writing and include a compelling case for the exception. 

Establishing Pay for New Hire Procedures

1. Compensation will carefully review the applicant’s qualifications in relation to the job’s requirements, external market factors, and the current wages of individuals employed in similar titles. It is typical that Compensation will provide guidance to the hiring manager regarding market pay for the position. It is anticipated that most salary offers will be between the minimum and the midpoint of the salary grade.
2. Compensation will provide to the hiring manager a beginning salary that is reflective of the prospective employee KSA’s, addresses market pay influences, and is equitable to existing employees. Beginning salaries for new employees should not be set at a rate greater than the salaries of existing employees with equivalent qualifications within the same job title in order to reduce the possibility of compression issues.
3. In partnership with Compensation salary offers will be prepared and forwarded by the Talent Acquisition Specialist to the hiring manager. The hiring manager may then communicate the offer to the prospective employee.

Determining Pay for Promotions, Demotions and Interim

A promotion occurs when an employee moves to a job in a higher salary grade or range.

An in-grade promotion occurs when an employee changes to another position in the same salary grade as the position previously occupied.

A demotion occurs when an employee's position is reassessed to a lower salary grade or when an employee is transferred to a position in a lower salary grade typically due to reorganization. A demotion also occurs when an employee voluntarily accepts a position in a lower salary grade than the position occupied.

Determining Pay for Promotion Procedures

1. Compensation will determine the promotional increase percentage according to the pay adjustment guidelines. The employee’s pay shall be adjusted ten percent (10%) or to the minimum of the new grade, whichever is greater. If a promotion is more than one grade higher, pay will be adjusted ten percent (10%) for each grade not to exceed the midpoint of the new grade. For example, if an employee is promoted up two (2) grades, the promotional increase is calculated as current base pay x 20%. New guidelines for increase percentages may be established each year based on Emerson policy and market considerations. Incumbents in the same job, if any, will be reviewed to ensure internal equity is maintained.
2. Promotions to acting or interim positions should be to one grade lower than then regular position and pay adjusted ten percent (10%) or to the minimum of the new salary grade, whichever is greater. If a promotion is more than one grade higher, pay will be adjusted ten percent (10%) for each grade not to exceed the midpoint of the new grade. For example, if an employee is promoted up two (2) grades, the promotional increase is calculated as current base pay x 20%.
3. For in-grade promotions pay shall be adjusted up to a maximum of eight percent (8%) at the time of such transfer depending on the change in job responsibilities and qualifications.

Determining Pay for Demotion Procedures

1. In the case of a demotion resulting from poor performance or employee election, the employee’s current pay is reduced by ten percent (10%) for each grade reduction and then compared to the new salary grade minimum and maximum. If the adjusted pay is lower than the new grade minimum, the pay reduction will be to the new grade minimum. If the employee's adjusted pay is greater than the new salary grade maximum, pay will be reduced to the new salary grade maximum.
2. In the case of a demotion resulting from an organizational change or development assignment, a review of the employee’s salary will be conducted to determine if there should be a reduction in salary or if the individual should remain at their current salary.

Market-Based Pay Adjustments

Emerson strives to pay at levels that are competitive with the market. Salary adjustments may be made to employee salaries to address significant discrepancies between Emerson’s level of pay and market pay levels for jobs. Actual adjustment amounts will be based on Emerson’s capability to pay.

Market-Based Pay Adjustment Procedures

1. Compensation will periodically compare current employee pay levels to the market pay for similar jobs.
2. If, after a lengthy posting or lack of qualified candidates, a particular job at Emerson becomes exceedingly difficult to recruit and retain because of salary requirements, Compensation will recommend salary adjustments to address the demand for greater pay because of extreme market competitiveness.
3. Individual employee pay will be reviewed in consideration of market survey data and recruiting requirements. Based upon this review, individual employee pay may be adjusted to better reflect market rates, decrease salary-related turnover, or match a job offer. The actual percentage an employee’s pay is adjusted will be based on the employee’s knowledge, skills, and abilities (KSAs) in comparison to the job’s KSAs, and the extent of external market pay factors.

Bonus Payments

From time to time bonus payments may be necessary to attract or retain staff. Such bonus payments are discretionary and determined on an individual basis with input and approval from the Department Head, Human Resources and the VP of Administration & Finance. Bonus amounts are determined on a situational basis. Bonus amounts are taxable and not eligible for retirement deferrals or employer retirement contributions.

Sign-On Bonus

While we strive to make market competitive offers, occasionally it may be necessary to offer a sign-on bonus to secure a candidate. In such cases, the hiring manager must work with Talent Acquisition and Compensation to determine the basis for the bonus, the appropriate amount and terms and conditions of the payment.

One-Time Bonus

One-time bonus payments may be awarded to employees who show exemplary performance above and beyond the duties and responsibilities of their job. If a manager feels a staff member is deserving of a bonus, they should send a formal written request to their Department Head and Human Resources providing supporting documentation for the request. Requests for one-time bonus payments are limited to once in a 12-month period.

Retention Bonus

Retention bonus may be awarded to staff to ensure their continued work at the College so as not to disrupt operations. Requests for retention bonuses should be made in writing by the Manager to their Department Head and Human Resources providing supporting documentation for the request.

Salary Structure Adjustments

Emerson’s salary structures will be adjusted on a periodic basis to ensure that we remain competitive with markets from which we attract talented employees.

Salary Structure Adjustment Procedures

1. On an annual basis, Compensation will review the pay structures in consideration of changing economic and competitive factors as determined by published salary surveys and other data sources, such as the federal Bureau of Labor Statistics Employment Cost Index and Consumer Price Index.
2. Compensation will recommend an appropriate salary structure adjustment to Emerson leadership, if required based on a review of market conditions.
3. Salary structures will be adjusted as approved.
4. Any employee whose salary is below the assigned updated salary range will receive a pay adjustment at least equal to the difference between actual salary and the salary range minimum. Such pay increases will be provided only if sufficient financial resources are available.

Annual Salary Increase Review

Annually, Emerson will evaluate the appropriateness and capacity of the College to offer salary increases to ensure that salaries remain competitive. 

The factors that Emerson will consider when approving a salary review budget, include, but are not limited to the following:

• The budget, including the short- and long-term implications of salary increases.
• Salary increase trends, as measured through third-party surveying firms.
• Wage inflation, as measured by the federal Bureau of Labor Statistics Employment Cost Index.
• Overall inflation, as measured by the Consumer Price Index.

Pay Above Grade Maximum

The compensation system is a tool used by Emerson to provide a rational basis for pay decisions. It helps to ensure that positions are not underpaid or overpaid based on job responsibilities and the competitive labor markets from which employees are recruited. The salary grade assigned to each position indicates the value of the position within Emerson. For any employee whose pay is at or above the maximum for his or her salary grade, future increases will be paid in a lump-sum not added to base pay so long as the current pay is greater than the salary grade maximum.

Timing and Effective Date of Job and/or Pay Changes

Changes to job title, grade and/or pay for any of the reasons outlined in this Policy will become effective with the first day of the pay period following the approval of such changes and subsequent processing of such changes in Workday. Changes to job title, grade and/or pay may be delayed if an employee is not actively at work at the time such changes are approved. In this situation changes to job title, grade and/pay will become effective when the employee is actively back at work.