NFE Salary Policy

Issue/Question

How is my annual increase calculated or determined as an NFE employee?

Environment

• Salary Policy

Resolution

The total annual salary policy pool is set by the state legislature and the Bureau of Human Resources (BHR). The salary policy pool applies to all state employees regardless of fund source. The total salary policy pool is allocated into three distinct salary policy distribution categories. The percentage assigned to each of these distribution categories may fluctuate from year to year based on campus priorities.

1. Utilizing FY25 to illustrate, the total salary policy pool set by the state was 4% with the distribution categories as follows:
   • Market pool:  10% of the total salary policy pool
   • Performance pool:  80% of the salary policy pool
   • Institutional Priority pool:  10% of the total salary policy pool

The total annual salary increase is the combined increase from each of these distribution categories. The methodology for the increase in each of the distribution categories varies. Market and Performance increases are formula driven, whereas Institutional Priority increases are discretionary.

Market increases are calculated utilizing employee salary and NFE salary range data for the position held. Employees with a salary lag compared to the midpoint of their salary range will receive a proportionate share of the market pool. The amount of the increase will depend on the number of employees receiving a market increase and their respective salary lags from midpoint.

Performance increases are calculated utilizing the employee performance ratings from the past calendar year. The amount of the increase will depend on the number of employees receiving a performance increase and their respective performance ratings.

Institutional priority increases are awarded on a discretionary basis, primarily at the recommendation of a supervisor or department head and approved by the appropriate Vice President. Institutional Priority recommendations are typically utilized to recognized exceptional performance in advancing of the university’s formally adopted Institutional Priorities or for addressing other university or unit priorities. 

Note: Salary policy applies to permanent and regular benefit/leave eligible NFE employees. Temporary NFE employees are not typically eligible for salary policy, however, may be approved by the appropriate Vice President for those that are in benefit/leave eligible positions for more than one year. Student and seasonal employees are not eligible for annual salary policy.

Note: NFE hired or appointed December 22^nd or later are not eligible for annual salary policy increases.

Note: Salary policy is not guaranteed every year. There may be years where no salary policy is authorized by state legislature or BHR.

SDBOR Over the Max (OTM) Guidelines

1. NFE employees that are at or above the maximum salary range for their salary grade are not eligible for a base increase. They may be eligible for an Over the Max (OTM), one-time, lump sum payment based on their performance review rating.

• Exceeds Expectations = one-time, lump sum payment up to 75% of the total salary policy pool
• Meets Expectations = one-time, lump sum payment up to 50% of the total salary policy pool
• Does Not Meet Expectations = not eligible for a one-time, lump sum payment
•  

2. Utilizing FY25 to illustrate, the total salary policy pool set by the state was 4% with the distribution categories as follows:
   1. FY25 maximum allowed OTM payment:
      • 75% of the salary policy pool for 3 Exceeds Expectations:  4% x .75 = 3% max (cap)
      • 50% of the salary policy pool for 2 Meets Expectations:  4% x .50 = 2% max (cap)
3. Employees that are nearing the max of range may be eligible for a “capped” base increase up to max of salary range and potentially a OTM one-time, lump sum if the combined base + OTM do not exceed the OTM caps.
   1. Scenarios utilizing FY25 to illustrate:
      • Employee has a current FY24 salary of $75,000
      • Employees salary grade is S6
      • FY25 max salary for S6 salary grade is $69,090
      • Employee received a Meets Expectations in their most recent evaluation
      • Employee is not eligible for a base increase from any of the standard distribution pools (Market, Performance, or Institutional Priority) because their salary is over the max of range
      • Employee is eligible for OTM up to 50% of the total salary pool:  4% x .50 = 2% max (cap)
        • Base increase up to max of range:  None, already at or over max
        • OTM, one-time, lump sum payment:  $75,000 x 2% = $1,500
   2. An employee is 1% below the maximum of the rannge
      • Employee has a current FY24 salary of $68,405
      • Employees salary grade is S6
      • FY25 max salary for S6 salary grade is $69,090
      • Employee received a Meets Expectations in their most recent evaluation
      • Employee is eligible for a base increase up to max of range
      • Employee is eligible for OTM up to 50% of the total salary pool:  4% x .50 = 2% max (cap)
        • Base increase up to max of range:  $68,405 + $684.05 (1%)
        • OTM, one-time, lump sum payment:  $68,405 x 1% = $684.05
        • Base + OTM combined cannot exceed OTM max/cap of 2% for Meets Expectations performance evaluation
   3. An employee is 3% below the maximum of the range
      • Employee has a current FY24 salary of $67,075
      • Employees salary grade is S6
      • FY25 max salary for S6 salary grade is $69,090
      • Employee received an Exceeds Expectations in their most recent evaluation
      • Employee is eligible for a base increase up to max of range
      • Employee is eligible for OTM up to 75% of the total salary pool:  4% x .75 = 3% max (cap)
        • Base increase up to max of range:  $67,075 + $2,015 (3%)
        • OTM, one-time, lump sum payment:  None, base increase is already at OTM max (cap)
        • Base + OTM combined cannot exceed OTM max/cap of 3% for Meets Expectations performance evaluation