Merit Pay
"Merit pay, also known as pay-for-performance, is defined as a raise in pay based on a set of criteria set by the employer. This usually involves the employer conducting a review meeting with the employee to discuss the employee's work performance during a certain time period." U.S. Department of Labor
WU Salary Program
Washburn University has utilized a four-tier performance based salary program over the past several years. In theory, expectations have been determined and wage increases have been granted based on meeting or exceeding those expectations. At the same time, the administration has been working to close a compensation gap that reportedly had Washburn salaries still lagging 6.8% behind the national average in FY04.
Merit or Favoritism?
A review of the pay increases at Washburn University over the past several years indicates that merit pay may be wonderful in theory but very challenging in practice. Unless there is a consistent standard utilized to determine merit and strict adherence to actually setting and consequently evaluating the performance criteria, merit pay systems most often reflect favoritism and invite discriminatory compensation practices.
Merit Pay or Market Adjustment?
It is impossible to determine whether pay increases reflect meritorious performance or market adjustments. It seems that if the University is serious about closing the compensation gap, a more methodical approach should be utilized such as the one discussed in 1998 comparing Washburn University faculty compensation with three peer institutions. In the 1998 report, a professional consultant helped the University identify 10-20 individuals with significant compensation problems, and adjustments were made for 13 of those individuals. As it now stands, most market adjustments seem to occur randomly or when new persons are hired.
Indicators Inconsistent with Merit
If the pay increases were in fact based on merit, it seems that the compensation pattern would confirm meritorious performance with percentage increases consistently exceeding the percentage increase for "meeting expectations." On the other hand, a person who consistently performed at the level of "meeting expectations" should consistently receive the stated percentage increase.
Data Sample
Here is how a sampling of percentage increases for randomly selected faculty appear on a graph:
This chart may indicate that market adjustments occurred in FY03. Then more modest salary increases in FY04 may have been misunderstood, given the rebounding percentage increases in FY05.
Discriminatory?
Analysis of some pay increases hint at discriminatory compensation practices. In some cases, it seems that age, gender, and origin may in fact be factors, with older, tenured professors more consistently getting the smaller pay increases. Pay disparities that approach $20,000 within the same classification in the same department also seem suspicious.
Reasonable?
Even if the pay increases were in fact based on merit, it seems that the ridiculous situation could exist where a person exceeding expectations could at some point be compensated at a level that far exceeds the position's value to the University. At what point does awarding meritorious compensation stop so that the individual remains within a reasonable compensation range? Even as other public institutions in this state have been cutting costs by giving modest pay increases of 0-2% over the past few years, meritorious increases of 7-10% at Washburn University have not been uncommon.
Equal Opportunity?
"It is University policy to have positive action taken to assure the full realization of equal opportunity for all who work for the University." Washburn University Equal Opportunity Policy Statement.
But some of the "all who work for the University" are in bargaining units. So, although the equal opportunity policy encompasses compensation, the merit pay is not available to that group of employees. With annual compensation in the mid teens to lower 20's, market adjustments seemingly have not received much consideration for this group.
Of course, another important group of employees, the students, have not received comparable compensation adjustments. Although they fill some significant positions across campus, they may be the most under compensated group on campus.