Pay for Performance Merit Program Guidelines

1) Collaborative Goal Setting. 2) Attainment & Shared Evaluation. 3) Celebrate & Repeat!

**Important Note - Dates for the 2018 merit program are being finalized and will be updated shortly.**


President Napolitano has announced the 2017 merit program with a 3 percent control figure for non-represented employees covered by Personnel Policies for Staff Members (PPSM). Per PPSM 30 no merit will be processed until an appraisal is received.This merit-based program determines salary increases based on an individual's performance and contribution. Recognizing and rewarding outstanding performance and differentiated pay based on employee accomplishments helps motivate people to achieve superior results. The merit-based approach is also consistent with feedback received from staff in the 2015 UC Overall Engagement Survey. Employee feedback urged us to make pay for performance a more prominent feature in our salary programs.


Employees eligible for the 2017 Merit Program include those individuals appointed to career or partial-year positions covered by PPSM before January 2, 2017, at any UC location, and who are still on career or partial-year status at UCSC on July 2, 2017; who have as applicable, passed probation as of July 2, 2017; and who are still on the payroll as a career or partial-year employee as of the payout date. Individuals with contract appointments are eligible if so stipulated in the terms of the contract and other eligibility criteria are met.

Merit Increase Structure

The pay for performance merit program seeks to proportionally recognize and reward individuals with salary increases based on performance.  Given the control figure of 3 percent, the overall increase range for satisfactory or better performance is 0 percent to 4.5 percent. The following salary increase ranges are guidelines to help to determine individual increases for eligible employees based on the overall performance appraisal ratings on the 2016-17 performance appraisals. Divisions must balance the allocation of merit increases within the overall 3 percent budgetary control figure. These are recommended guidelines and individual increases may vary. If feasible, it is recommended to allocate a minimum of 2 percent for performance ratings of satisfactory or higher.


Performance Rating:


Improvement needed

Met Expectations

Consistently Exceeded Expectations





up to 2.5%

up to 3.5%

up to 4.5%

Timing and Procedures

At UCSC, performance appraisals cover the fiscal year July 1 through June 30. This cycle does not provide time for completion of performance appraisals and assignment of individual merit increases to meet the July 1, 2017, effective date of the current merit program (June 18, 2017, for biweekly paid employees). Therefore, merit increases will not be reflected on employee paychecks for approximately 3 months.

Information about funding staff salary merit increases can be found on Planning and Budget’s website.

Divisions may delegate the requirement to balance the control figure to subordinate departments and units as appropriate to manage the divisional merits.  Compensation will provide merit rosters on August 7, 2017, with information needed to determine merit increases. This information will include calculations for actual dollar increases associated with proposed percentage increases to ensure that good performers receive sufficient bottom-line increases to effectively recognize and reward performance. The rosters will also include divisional equity increase data for 2016-17, in case managers wish to consider equity increases in merit decisions.  

The merit rosters must be completed and returned to Compensation by August 25, 2017. Divisional approval processes will be completed prior to notifying employees of merit increases.  Merit letter email templates will be available for managers to notify employees.

The effective date of merit pay increases is scheduled for biweekly employees on September 20th and for monthly employees on September 29th. Pay will be adjusted retroactive to June 18th for biweekly employees and July 1st for monthly employees (to be paid out on November 1st).

Salary Increase Determination Process

The recommended increase ranges provide guidelines for individual increases. Divisions must however, allocate the increases within the 3 percent control figure, so increases may vary from the recommended ranges from 2.99% up to 3.01%.

The divisions will each establish a plan for delegating, reconciling and approving divisional merit increases within the allotted time frame and communicating increases to employees. After receiving the merit call, merit roster spreadsheets will be disseminated in accordance with divisional practice.  The three percent budgetary control figure will be balanced in accordance with divisional practice. The recommendations will be reviewed by Compensation.

The merit rosters will be completed and delivered to Compensation by August 25, 2017. Upon confirmation of increases by the division, final increase percentages can be provided to supervisors/managers for communication to employees using the available merit increase email templates.  Each supervisor will discuss the merit increase with each employee to recognize their contributions and to motivate future efforts.