The University allocated $250,000 for employee bonuses and merit-based awards this fiscal year, according to Karen Davis, vice president for human resources. This figure represents an increase since the fiscal downturn of 2008 and 2009, after which no funds were allotted to the pool, but it is still far from its peak of $800,000 distributed in the fiscal year ending in June 2006.
Despite low bonus and merit-based award distributions during the fiscal downturn, Davis said the University remained competitive with peer institutions, who were also hit hard.
The merit and bonus pool is determined each year as part of the University's budgeting process. Its total varies considerably from year to year in direct correlation with the greater economic climate, Davis said. Typically, all funds are used. About 5 to 10 percent of employees receive bonuses and about two-thirds receive merit-based awards. "Whether there is an up year or a down year, we are looking at market data all of the time and using anecdotal information to determine a competitive amount," she said.
Though 2009 saw a bear market, the brunt of the downturn did not come until 2010, when the University factored losses into the budget, said Elizabeth Warner, director of compensation, organizational services and employee programs.
The University anticipates an extended period of slow financial growth in coming years, but Davis said it is impossible to predict how the economy will shape future budgets.
"We evaluate our total compensation programs and needs on an annual basis," Davis said. "This evaluation considers a number of factors that include the general financial climate, as well as external benchmarking and market data, internal recruitment and retention trends."
The University also distributes excellence awards from a separate bonus pool totaling approximately $125,000 each year to 20-30 staff members.
The University Resources Committee recommended a 4.25 percent increase in the total faculty salary pool for the current fiscal year for "merit increases, promotions and competitiveness" in the committee's 2012 annual report.
