Lump Sum | Off-Cycle | Deferred

It should be the rare occasion that an employee's annual review and merit increase are deferred. However, there are some exceptional circumstances when this may be necessary.

1) Deferred Merit Increase - Performance

There may be times when an employee's performance is marginal and does not fully meet job/position expectations and performance is unsatisfactory; i.e. performance meets minimal requirements and/or falls below performance standards. In such cases, a department head or manager may choose to defer an employee's merit increase for a period of 3 to 6 months. This should only be done if there is reason to believe that the employee's performance can improve within that time period. A deferred merit increase is generally recommended for times when:

• There is a good prior work history.
• It is believed that the performance problem may be temporary.
• The employee understands that receiving a merit at the end of the deferral period is contingent on fully meeting the expectations of the job/position.
• There is a performance improvement plan in place.

In such cases, the employee's annual performance review date would remain unchanged; i.e. any merit increase received would be for the remaining 6 to 9 months (depending on the amount of time that the merit is deferred).

Example:

• Employee's review date is July 1.
• A 3 month deferral is deemed appropriate (to October 1).
• On or before the employee's review date, a performance improvement plan is established and discussed with the employee.
• Performance improves - merit becomes effective October 1.
• Employee's next review date is July 1 of the following year.

In this example, because the employee does not receive any merit until October 1, he/she would receive the equivalent of 9/12ths of the recommended merit (October through June).

Note that using this option should not be the first indication to the employee that a performance problem exists. Rather, this might be considered in conjunction with the corrective action process.

Procedure
Prior to deferring an employee's merit, a department head or manager must discuss this option with his/her Senior Officer and the appropriate Human Resources Officer (HRO) who would, work with the Human Resources Compensation Office to complete the appropriate forms.

At the end of the 3 to 6 month deferral period, assuming performance has improved, the department head or manager should send an e-mail to his/her HRO with information to generate a merit (to be determined by the parameters of the review allocation guidelines effective at the time of the deferral). HROs will coordinate with the Compensation Office to get the deferred merit processed in the HR-Payroll Service Center. General monies to support the deferred (i.e. prorated) increase will be held in the Budget Office and will be distributed at the time the raise becomes effective.

If performance does not improve over the course of the deferral period, the employee is not eligible for a merit and the HRO should again be contacted so that an appropriate action plan can be identified.

Whether or not the employee is eligible for a merit increase, it is important that the department head or manager document the employee's performance during the deferral period and, when necessary, continue with some type of formal corrective action.

2) Deferred Merit - "Other"

The annual salary review process begins approximately two (2) months prior to the actual effective date of the merit increase. As a result, merit increases are entered into the system as future dated actions. This is important to remember because there may be times when extenuating circumstances create a situation where the time frame for preparing the annual performance review must be extended and the merit increase is deferred for non-performance related reasons. While this should be avoided if at all possible, some situations may be beyond a department's control.

Reasons for deferring may include:

• The notification that a grant award is pending and the availability of funds is unknown; however, the DLC expects to receive notification in the very near future.
• The employee's department head or manager is unavailable because he/she is unexpectedly called out of the country or placed on a new assignment for a brief period of time.
• The process of review involves several parties and will extend slightly beyond the return due date.
• The employee has only been in the position for a short period of time and the department head or manager is not comfortable reviewing the employee's performance until more time has passed.

Procedure
Prior to deferring an employee's merit, a department head or manager must discuss this option with his/her Senior Officer and the appropriate Human Resources Officer HRO who would, in turn, work with the Human Resources Compensation Office to complete the appropriate forms.

When the decision to defer a merit has been made, the department head or manager must also determine when the review will occur. This information should be sent via email to the HRO. The Compensation Office and/or HRO will follow up with the DLC to ensure that both the performance review and merit increase occur in a reasonable time period.

Updated May 2005

Effective in conjunction with the July 1, 2002 review allocation process.