Equity Adjustment Procedures

It is the Davis campus practice to award salary increases through the regular budget/merit cycles. As with all practices, however, some flexibility is needed to respond to exceptional circumstances. The intent of equity adjustments is to provide consideration to critical and/or unusual pay administration problems. With all requests for salary increases, a compelling argument must be made as to why to increase an employee's base salary.

Reasons for salary equity adjustments outside of the normal salary programs may include issues such as external pressure in high demand areas, internal salary compression, and/or retention considerations. In these instances equity increases may be approved to remedy a salary inequity. Equity adjustments are not granted to reward performance. Justification must accompany requests for equity adjustments, including specific outside salary offers in cases of retention, or a specific analysis of salary relationships in cases of correcting salary inequities.

To provide guidance and understanding of the equity increase process the Compensation Services Unit has outlined the following guidelines to help facilitate the process for reviewing and approving equity increases as part of a central HR process.

The application of equity increases may be appropriate in the following instances:

  • Retention of mission critical staff. This includes individuals with special skills or experience that are uniquely critical to the program or completion of high priority projects.
  • Restructuring within a department that results in an incumbent taking on additional staff and/or responsibilities that do not warrant an upward reclassification, but may result in an increased level of responsibility or direct reports that receive higher pay. Direct reports receiving more pay should not automatically be considered an inequity. For example, a Programmer may demand a higher pay level due to market considerations based on technical skills. If the supervising Manager does not possess the technical skills, an inequity in salary may not exist.
  • When the outcome of the collective bargaining process results in increases for staff causing compaction problems with supervisors/managers.
  • New hires being appointed at a higher salary rate than existing employees in the same classification within a particular unit, department, or division. Individuals' knowledge, length of service, performance, and experience should all be taken into consideration when ascertaining the appropriateness of an equity adjustment.
  • To correct an unacceptable internal salary inequity/compression which may have occurred in the rate of pay for work in positions which are of comparable value to the organizational unit and which require equivalent knowledge, skills, abilities, effort, and responsibility, absent differences caused by such factors as performance, market, or length of service.
  • When the difference is not explainable by differences in qualifications, type or length of experience, the work itself, the value to the organization, performance/productivity, and/or market.

Increases are separate and distinct from the annual merit and bonus process. Equity adjustments should not be used to circumvent the campus' merit and bonus programs. The review of equity adjustments are conducted as a focal point review on an annual basis for the campus and health system in October of each year.  Equity requests outside of the annual process are limited and intended to address immediate employee retention actions.

Policy states that an employee's total salary increase in a single fiscal year shall not exceed 25 percent of base pay. Increases include all monetary awards, for example, merit, promotional, and equity increases. Exceptions to policy should be directed to a member of the Compensation Services Unit.

Equity increases are typically requested by management within a department to correct a salary issue. The request should be initiated in the PeopleAdmin Position Management System.  Use the justification field when taking this action.  The request should include information regarding the reasons for the request (e.g. retention, compression); an outline of the employment and salary history of the incumbent in the department; employment and salary history of other employees in the same classification; the dollar amount of increase being requested; and labor market information if appropriate (supporting documentation can be attached to the request).

NON-EXCLUSIVELY REPRESENTED STAFF: If the request is for an employee who is currently "non-exclusively represented" the request can be reviewed and approved at a campus level. Upon approval of any equity adjustment action, central HR will notify the requesting department of decision regarding the action.

UNION REPRESENTED STAFF: California's Higher Education Employer-Employee Relations Act (HEERA) is the law passed by the California State Legislature which gives UC employees the right to decide whether or not they want to unionize and have collective bargaining as the sole means of determining their wages, hours and working conditions. Current contracts do not specifically address equity adjustments. As such, equity adjustment requests for represented staff should be carefully considered ensuring they do not conflict with the bargaining process, since decisions may have a broader impact on other represented positions system-wide. In addition, a NOTICE process to the union is required prior to approving and implementing equity adjustments for represented staff. For these actions, please contact a member of the Compensation Services Unit who will assist you in completing the notice to the appropriate union representative. The NOTICE process will be conducted by the Human Resources Office.

Throughout the process should you wish to consult with a Compensation Analyst regarding an equity adjustment, please feel free to call 752-5311.The Compensation Assistant will refer you to an available Compensation Analyst.