University of Minnesota  Procedure

Determining Salaries for Academic Professional and Administrative Employees


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Please use the contact section in the governing policy.

Initial Salary Setting

Hiring authorities should consider the following factors to determine the initial salary: relevant credentials, strength of expertise, experience, competitiveness of the discipline or field in the marketplace, and relevant internal and external market data. Initial salary offers must comply with established salary floors for the position and include any required approval signatures by the appropriate responsible administrator before the offer can be finalized.

Initial salary setting for administrative officers who also hold tenured faculty appointments or continuous academic professional appointments require documentation of a bifurcated salary. Units must establish the individual’s respective tenured faculty or continuous professional appointment salary as a portion of the initial salary provided at the time of hire into the senior administrative position. This serves as the “on paper” initiation of this salary that increases annually at the average increase to base of the person’s same-ranked collegiate peers. This “on paper” salary is considered the salary floor for the individual returning to their tenured faculty or continuous academic professional position at some time in the future and thus may be negotiated higher.

Annual Increases

The assessed meritorious performance of duties and responsibilities associated with the position and performed by the position holder serves as the basis of merit-based salary increases or rewards. Unsatisfactory performance, documented and communicated to the employee, may serve as the basis for withholding an annual increase to the base salary or any other forms of financial rewards linked to job performance.

The annual compensation plan memo, jointly issued from the Executive Vice President and Provost and Senior Vice President of Finance and Operations, outlines the principles and strategies for annual merit-based salary adjustments. The plan specifies the minimum percentage of the unit’s (i.e., college, campus, or administrative unit) salary pool that is used for awarding merit-based recurring increases to base salaries or giving one time (lump sum) performance awards, in any given year.

Initial development of, and/or modifications to, the standards, criteria, and procedures used in performance reviews and merit pay decisions should involve the input of P&A employees within the unit. The process for making annual merit-based salary decisions must assure that the responsible administrators/supervisors meet with P&A employees to review the past year’s performance in accordance with the Administrative Policy: Performance Reviews for Academic Professional and Administrative Employees.

Increases to Base Salary


A number of administrative appointments carry a negotiated administrative augmentation of the individual’s base salary for the designated term of the administrative appointment. This augmentation relates to the administrative position and not to the individual. Thus, as the individual relinquishes the administrative position, the individual’s salary reverts to the base amount. Any salary adjustments during the term of administrative office are appropriately divided between the base and the augmentation.

All fringe benefits relate to both the base salary and the augmentation. Fringe benefits paid during the period of office in an administrative post relate to the term of the administrative appointment. In the event that the individual relinquishes the administrative position, the fringe benefits will subsequently be based on (1) the appointment and base salary then assumed by the individual and on (2) the term of that appointment. When the individual relinquishes the administrative post and the unit discontinues the augmentation, the unit will discontinue the fringe benefits related to the augmentation as well.

Other reasons for increases

Reasons for increases outside of the awarding of annual performance-based merit pay and augmentations may include promotions, market adjustments, internal equity adjustments, retention adjustments, lump sum payments, incentive pay, and special awards and recognitions.

  • Promotions involve a change from one classification to another classification that is at a higher level either within or outside of a formal promotional series. Generally an increase in pay is given.
  • Market adjustments refer to a salary adjustment that brings an individual to approximate market values, or targeted market percentage.
  • Internal equity adjustments refer to salary adjustments addressing documented inequities that bring an individual into an equitable pay relationship with others in the work unit. Review of performance, as well as credentials of current employees are considerations in making pay decisions.
  • Retention adjustments refer to salary increases awarded to counter a bona fide documented employment offer from outside the University.
  • Lump sum payments refer to non-recurring payments consisting of a single sum of money awarded to the employee in recognition of meritorious performance.
  • Incentive pay rewards the accomplishment of specific results. This form of compensation usually ties to expected results identified at the beginning of the performance cycle.
  • Units may award special financial rewards and recognitions to employees for outstanding contributions.