Transcription
Total Rewards Policy for Employees in TMGComplete Policy Title:Policy Number:Total Rewards Policy for Employees in TheManagement GroupApproved by:Date of Most Recent Approval:Board of GovernorsOctober 24, 2019Date of Original Approval:Supersedes/Amends Policy dated:October 24, 2019Responsible Executive:Enquiries:Assistant Vice-President and CHROHuman Resources ServicesRelated Guidelines and Policies: Annual Salary Review Guides and Instructions Contributory Pension Plan for Salaried Employees of McMaster University Including McMasterDivinity College 2000 (“Salaried Pension Plan”) Definition of Retirement for Determination of Eligibility for Other Benefits for Retirees ofMcMaster University Group Registered Retirement Savings Plan (RRSP) Guidelines for Cash Compensation Administration for Employees in TMG Job Evaluation Guide for TMG Management Professional Development Allowance (MPDA) for Members of TMG Parental and Pregnancy Leave for TMG Performance Excellence Program for TMG in Bands F through M TMG Achievement Program - Annual Performance Review for TMG TMG Management Days Policy TMG Time and Leave Provisions Guideline TMG Vacation Entitlement Total Rewards Philosophy for TMG Tuition Assistance and Tuition Bursary Policies Variable Pay Plan for TMG in Bands N through QDISCLAIMER:If there is a discrepancy between this electronic policy and the written copy held bythe policy owner, the written copy prevails.IntroductionMcMaster University provides a comprehensive Total Rewards program for employees in TheManagement Group (TMG) that is designed to attract, develop, engage and retain high calibre leaderswho are critical to the University’s continued success. The information in this Policy is intended to alignwith the Total Rewards Philosophy for TMG. An excerpt of the Total Rewards Philosophy Statement forTMG follows:The Total Rewards program for TMG is designed to be competitive and to recognize and reward individualperformance. In keeping with this philosophy, the Total Rewards program for TMG provides salary rangesBoard of Governors – October 20191October 2019
targeted at the 60th percentile2 of the defined market, pay relative to performance, competitive benefits,performance and recognition programs, promotes internal equity, supports the maintenance of payequity, and operates in a financially responsible manner (now and in the future). The two key foundationalelements that underpin the Total Rewards program design are: Pay for performance; and Salary ranges targeted at the 60th percentile of the defined market.McMaster University is committed to maintaining the Total Rewards program and ensuring that itoperates in compliance with all applicable laws and regulations and that related practices promoteinternal equity and ease of administration. The University reserves the right to amend this Policy andrelated guidelines from time to time.PurposeThis Policy defines and outlines the Total Rewards program provisions for employees in TMG who arecovered by this Policy.DefinitionsDefinitions of key terms can be found in Appendix A.ScopeThis Policy governs the total rewards provisions for all employees who are entering, or are currently in,TMG.Total Rewards Program ApprovalsThe Total Rewards program for TMG is subject to regular review and update, which may requireapprovals up to and including that of the McMaster University Board of Governors.Policy1. Designation of a Position as TMGHuman Resources is responsible for determining whether a position is classified as TMG or included inanother employee group. The job description is the primary basis of this determination.2. Job Descriptions for Positions in TMGAll positions in TMG must have a job description that clearly outlines the job purpose, accountabilities,qualifications, dimensions and working conditions.3. Job Evaluation and Determination of BandAll job descriptions for positions confirmed in TMG must be evaluated to determine the Band of theposition. Each Band has an associated salary range within which compensation is administered.2Throughout this document, references to cash compensation target at the 60 th percentile of the defined marketreflect the current practice. The cash compensation target is subject to review and change at the sole discretion ofthe University.Board of Governors – October 20192October 2019
4. Market CompetitivenessSalary ranges are targeted to the 60th percentile of the defined market. The defined market for TMG is:Bands F – I:Local Market (Hamilton, Burlington and surrounding area)Bands J – M: Regional Market (Hamilton, Toronto, South Western Ontario)Bands N – Q: National Market (All Canada)The market competitiveness target is subject to review and update, normally annually, at the solediscretion of the University.5. Salary Ranges and StructureEach Band has a salary range within which employees’ salaries are administered. The salary range willconsist of a Minimum, a Target, and a Maximum. The Target is currently set to the 60th percentile of thedefined market. The salary range is further divided into zones which reflect the design of the salaryrange structure, as per the following illustration:Salary Range:Minimum(set at 80% of the Target for Bands J toQ; for Bands F to I, the minimum is setbetween 82.5% and 90% of the Target)Target(set at 60th percentile of the definedmarket)Maximum(set at 120% of the Target for Bands J toQ; for Bands F to I, the maximum is setbetween 105% and 115% of the Target)Zones:Progressing ZoneTarget ZoneHigh Performance Zone(Minimum to 94.9% of the Target)(95% to 104.9% of the Target)(105% of Target to Maximum)a. Progressing ZoneThe Progressing Zone is between the Minimum of the salary range and 94.9% of the Target and is theNormal Range for Hiring. Employees progress towards the Target Zone through performance-basedincreases that are determined in the annual performance and salary review processes.b. Target ZoneThe Target Zone is the portion of the range that is between 95% and 104.9% of the Target.Employees’ salaries are administered within the salary range for the applicable band. Over time,dependent on individual performance and through application of the annual performance and salaryreview processes, the majority of employees can expect to be compensated in the Target Zone of thesalary range for the position they hold.c. High Performance ZoneThe High Performance Zone is the portion of the range that is between 105% of the Target and theMaximum of the salary range.The High Performance Zone is intended for employees who have achieved and demonstrated consistentand ongoing outstanding performance.Board of Governors – October 20193October 2019
6. Annual Adjustment to Salary RangesSalary ranges are adjusted on an annual basis to maintain the University’s desired relationship to thedefined market.The effective date of salary range changes is normally the first day of the first full pay period followingJuly 1st. Adjustments to the salary ranges require approvals up to and including that of the Board ofGovernors.7. Administration of Employee SalariesEmployees will be paid in accordance with the approved Band and the corresponding salary range forthe position they hold. For those TMG who work less than full-time, the salary range for the positionthey hold will be pro-rated accordingly.8. Responsibility of Management for Individual SalariesManagers are responsible to manage staff salary levels in accordance with performance within thispolicy and other relevant policies and guidelines.Managers are encouraged to periodically review the employee’s compa-ratio in consideration ofperformance, time in the job, and internal equity to determine whether any adjustments are required.Anomaly increases are permitted for this purpose.9. Establishing Salaries for New Hires, Job Transfer, Re-evaluation or Anomaly Adjustmenta. New Hires, Including Internal Transfers from Other Employee GroupsSalaries for new hires, including internal transfers from other employee groups, will be established inconsideration of the candidate’s relevant skills and experience and internal equity. Managers areexpected to follow the norms outlined in the Guidelines for Cash Compensation Administration forEmployees in TMG.b. Job Transfer within TMGA salary increase may be awarded in the following circumstances:Type of ChangeDescriptionSalary Increase IndicatedPromotionIncrease of 1 or more BandsYesLateralNo change in BandPossibleIncreases are not normally given in the case of alateral job transfer.An increase may be considered where the jobtransfer is a developmental move. In suchsituations, consultation with Human ResourcesServices and appropriate approvals are required.Board of Governors – October 20194October 2019
Type of ChangeDemotionDescriptionDecrease of 1 or more BandsSalary Increase IndicatedNoIf the job change is at the employee’s request, adecrease in salary may be appropriate. In nocircumstance can the employee’s salary beabove the Maximum of the new position.If the job change is due to a reorganization,time-limited salary protection, which mayinclude red-circling, will apply.Managers are expected to follow the norms outlined in the Guidelines for Cash CompensationAdministration for Employees in TMG.c. Re-evaluation of a TMG JobA salary increase may be awarded in the following circumstances:Type of ChangeSalary Increase IndicatedIncrease of 1 or more BandsYesNo change in BandNoDecrease of 1 or more BandsNoIf the job has been redesigned due to a broader reorganization,time-limited salary protection, which may include red-circling, willapply.Managers are expected to follow the norms outlined in the Guidelines for Cash CompensationAdministration for Employees in TMG.d. Anomaly AdjustmentsAnomaly adjustments will be permitted where an employee’s base salary no longer reflectsperformance or market. Managers are expected to follow the norms for anomaly adjustments outlinedin the Guidelines for Cash Compensation Administration for Employees in TMG.10. Controls and Approvals Required for Establishing SalariesAppropriate controls and approval levels will be maintained to ensure equity prevails.The establishment and ongoing administration of salaries for new hires, on job transfer or re-evaluation,or anomaly adjustments are subject to the controls and approvals that follow. Refer to the Guidelinesfor Cash Compensation Administration for Employees in TMG for the practices to be followed for theestablishment of salaries at initial hire and the ongoing administration of salaries for employees in TMG.Board of Governors – October 20195October 2019
Base Salary as a %of the TargetBetween Minimumand 94.9%Between 95.0%and 104.9%Between 105% andMaximumOver MaximumApprovals RequiredThe approvals required apply to the following: New Hires (Including Internal Transfers from Other Employee Groups) Job Transfer within TMG Re-evaluation Anomaly AdjustmentsApproval of the Department Head is required.Approval of the Dean or AVP is required.Approval of the Budget Envelope Manager is required in advance. Consultationwith Human Resources Services is required.Exception:Increases which adhere to the norms outlined in the Guidelines for CashCompensation Administration for Employees in TMG: Job Transfer: In the case of a job transfer which is a promotional changeand an increase in salary of 5% is to be applied, approval of the Dean orAVP is required. Re-evaluations: In the case of a re-evaluation which results in anincrease of 1 Band or more and a salary increase of 5% is to be applied,approval of the Dean or AVP is required.Written request endorsed by the Vice-President.Written approval from the President and Vice-Chancellor, in consultation withthe Chief Human Resources Officer, is required in advance.11. Annual Salary ReviewIn keeping with the University’s pay for performance philosophy, increases awarded in the annual salaryreview will be in the form of merit that is allocated based on a merit matrix which factors in assessmentof employee performance and position in the salary range (compa-ratio). Completion of a performancereview is required to be eligible for an annual merit increase.12. Variable Pay ProgramsTMG, subject to program eligibility, assessment criteria and application, may receive variable paypayments through either the Performance Excellence Program for TMG in Bands F through M or theVariable Pay Plan for TMG in Bands N through Q. Any payouts from these programs will be in the formof one-time, lump sum payments, subject to applicable deductions, and do not impact benefit orretirement income programs.Refer to the respective policies for program details and eligibility criteria.13. Benefits While Actively EmployedCompetitive benefits programs will be maintained. The provisions may change from time to time at thesole discretion of the University.Board of Governors – October 20196October 2019
Subject to eligibility requirements, persons hired into TMG positions will be eligible for participation inthe University’s health, emergency travel assistance, dental, life insurance, salary continuance, LTD andAD&D benefits plans, while actively employed.14. Benefits On RetirementEmployees in TMG who were hired by the University prior to June 16, 2006 into a position that waseligible for post-retirement benefits retain eligibility for post-retirement benefits upon retirement froma TMG position. (TMG retiree benefit plan terms and provisions apply.)Employees in TMG who were newly hired by the University on or after June 16, 2006 are not eligible forpost-retirement benefits. The University provides an exception for employees who were hired into aUnifor post-retirement benefit eligible position on or after June 16, 2006 and subsequently transfer to aTMG position after their date of hire and before May 1, 2022. These individuals have beengrandparented and retain eligibility for post-retirement benefits upon retirement from a TMG position.(TMG retiree benefit plan terms and provisions apply to the those who have been grandparented.)Post-retirement benefits are restricted to those TMG who meet plan eligibility definitions. Benefits onRetirement provisions may change from time to time at the sole discretion of the University.15. Retirement Income ProgramsCompetitive retirement income programs will be maintained. The provisions may change from time totime at the discretion of the University.Persons hired into TMG positions will be eligible for participation in the University’s Group RRSP orSalaried Pension Plan, as per plan eligibility definitions. For clarity, individuals newly hired to McMasterinto a TMG position on or after June 16, 2009 will participate in the University Group RRSP. Employeesin TMG who were hired prior to June 16, 2009 will continue to participate in the University’s DefinedBenefit Pension Plan.16. Programs that Support Work Life Blend and DevelopmentAs part of its Total Rewards program, McMaster provides a number of offerings that support work-lifeblend (e.g., Management Days and vacation) and development of employees in TMG (e.g., ManagementProfessional Development Allowance, Tuition Assistance, Tuition Bursaries). Refer to the applicablepolicy and leave provisions guideline for details.17. Responsibility of Managers of TMGManagers of TMG are required to:o understand and adhere to this Policy and obtain appropriate approvals for salary adjustments,as defined in this Policy and any related Guidelines including the annual performance reviewand merit program;o create and maintain job descriptions for TMG in accordance with Job Evaluation Guide for TMG;o actively engage with TMG in setting and evaluating performance goals in accordance with theTMG Achievement Program which is the University’s Annual Objectives and Development Goalsprogram for TMG;o provide feedback and coaching; engage in career development planning;Board of Governors – October 20197October 2019
oooactively manage the salaries of TMG employees in accordance with the applicable policies,guidelines and program provisions;as required, consult with Human Resources Services on matters related to compensation forTMG; andadhere to and operate within existing budget and approval processes.18. Responsibility of Human Resources ServicesHuman Resources Services is responsible for:o policy maintenance;o policy interpretation;o administration of the Total Rewards program, including compensation, benefits and retirementincome plans;o providing guidance and advice to departments;o periodic audit;o maintaining a current perspective on compensation and reviewing of compensation trends andchanges in relevant markets; ando adherence to legislative requirements and reporting.19. Related Procedures and DocumentsThis Policy is to be read in conjunction with all applicable statutes and University policies and practices.The following is not a comprehensive list:o Annual Salary Review Guides and Instructionso Contributory Pension Plan for Salaried Employees of McMaster University Including McMasterDivinity College 2000 (“Salaried Pension Plan”)o Definition of Retirement for Determination of Eligibility for Other Benefits for Retirees ofMcMaster Universityo Group Registered Retirement Savings Plan (Group RRSP)o Guidelines for Cash Compensation Administration for Employees in TMGo Job Evaluation Guide for TMGo Management Professional Development Allowance Policyo Performance Excellence Program for TMG in Bands F through Mo Total Rewards Philosophy for TMGo Treatment of Employees on a Temporary Growth and Development Appointmento TMG Achievement Program – Annual Performance Review for TMGo TMG Management Days Policyo TMG Vacation Entitlemento Tuition Assistance and Tuition Bursary Policieso Variable Pay Plan for TMG in Bands N through QAny question of the interpretation or application of this Policy or related policies and guidelines shall bedetermined by the Assistant Vice-President and CHRO.Board of Governors – October 20198October 2019
Appendix A: DefinitionsBand:Jobs in TMG are administered in Bands. The Band ofa job is determined through application of theUniversity’s job evaluation process which uses agender neutral comparison system to evaluate jobsbased on the skill, effort, responsibility and workingconditions. Each Band has a corresponding salaryrange within which incumbents of jobs areadministered.Job:For purposes of this document, a job is the collectionof duties and responsibilities assigned and asdescribed in a job description.Merit:A program in which salary increase decisions aremade contingent upon performance and position inthe salary range (compa-ratio). Commonly calledpay-for-performance.Base Salary:The compensation paid to an employee forperforming specific job responsibilities. Base salary isreflective of: a) the expected contribution of the jobto the University based upon current jobrequirements; b) competitive base salaryinformation for similar jobs at peer organizations; c)individual knowledge, skills and competencies thatrelate to success on the job; d) individualperformance in the role.Merit Matrix:A merit matrix provides the maximum amount ofmerit that may be allocated during the annual salaryreview. The merit matrix considers performance andposition in the salary range.Normal Range for Hiring:The Normal Range for Hiring new employees isbetween the Minimum and 94.9% of the Target ofthe salary range. Placement within the NormalRange for Hiring is determined based on theindividual skills and experience of the candidate andin consideration of internal equity within the hiringdepartment and area.Cash compensation:Cash provided by an employer to an employee forservices rendered. Compensation comprises theelements of pay (e.g., base pay, one-time lump-sumpayments, stipends, etc.) that are offered to anemployee in return for their services.Performance Excellence Program:The Performance Excellence Program rewardsmembers of TMG deemed truly exceptionalperformers who are clearly leaders among theirpeers and have noticeably excelled in theirperformance over and above what would normallybe expected in their role and have been identified ashigh potential and/or high performing employees.TMG in Bands F through M with a performancerating of Outstanding are eligible.Calibration:The calibration process is designed to encouragegreater consistency across the University in theapplication of the TMG Achievement Programratings in the annual performance review andrelated merit allocation in the annual salary review.Compa-ratio:Compa-ratio is used to describe an employee’sposition in the salary range and is calculated bydividing the employee’s salary by the Target of thesalary range and multiplying the result by 100.Position:For purposes of this document, a position refers to ajob in a specific department.Progressing Zone of the Salary Range:The portion of the salary range between theMinimum and 94.9% of the Target.High Performance Zone of the Salary Range:The portion of the salary range between 105% of theTarget and the Maximum. The High PerformanceZone is intended for employees who havedemonstrated consistent and ongoing outstandingperformance.Red-circling:Protection provided to an employee whose salary isabove the established salary range maximumassigned to the job they hold. The employee is notBoard of Governors – October 20199October 2019
eligible for further base salary increases until therange maximum surpasses the individual’s salary.of others and employees without managerialresponsibility but who are exempt from unionizedemployee groups due to the scope of recognitionclauses or the confidential labour relations nature ofthe work performed. TMG includes employees whoare exempt from Unifor because they work outsideof the province of Ontario.Salaried Pension Plan:Refers to the Contributory Pension Plan for SalariedEmployees of McMaster University IncludingMcMaster Divinity College 2000.Salary Range:The range of pay that is allowed for a job. Theevaluation outcome of a job determines the Bandwhich has a corresponding salary range. Salaries ofincumbents of the job are administered within thesalary range in accordance with applicable policies,guidelines and administrative practices.TMG Achievement Program:The TMG Achievement Program is the performancereview and development planning program. TheProgram recognizes three levels of achievement:achieving, successful and outstanding. A ratingreflective of overall achievement in consideration ofwork objectives, leadership capabilities andindividual development is assigned.Target of the Salary Range:As at the date of approval of this Policy, the Target isset to the 60th percentile of the defined market.Total Rewards:The monetary and non-monetary returns providedto employees in exchange for their time, talents,efforts and results. Total rewards involve thedeliberate integration of five key elements ofcompensation, benefits, work life, development andcareer opportunities, and performance andrecognition, that effectively attract, develop, engageand retain the talent required to achieve desiredbusiness results.Target Zone of the Salary Range:The portion of the salary range between 95.0% ofthe Target and 104.9% of the Target. It is expectedthat salaries of employees in TMG will progress tothe Target Zone over time. The time required toreach the Target Zone varies and is dependent onskills, experience, performance, salary increaseprovisions for TMG, and market conditions.Variable Pay:The Variable Pay Plan program provides a frameworkthat enables rewarding truly exceptional performerswho, through their involvement in activities withinor beyond the scope of their position, directlyadvance the University’s strategic priorities. TMG inbands N through Q are eligible.TMG:TMG refers to The Management Group which is aheterogeneous group consisting of managers withresponsibility for making effective recommendationsthat impact the terms and conditions of employmentBoard of Governors – October 201910October 2019
Board of Governors - October 2019 Base Salary as a % of the Target Approvals Required The approvals required apply to the following: New Hires (Including Internal Transfers from Other Employee Groups) Job Transfer within TMG Re-evaluation Anomaly Adjustments Between Minimum
