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Compensation Overview

HR strives to support sound compensation practices across the university community. Use the following information to gain an understanding of the university’s compensation philosophy and get a sense of the terms used to express different aspects of employees’ compensation packages.

The University of Texas at Austin Compensation Philosophy

To fulfill its mission, the university must attract and retain outstanding staff members. To meet institutional staffing needs and priorities, the compensation system has the following objectives:

  • Establish compensation levels for positions on the basis of their relative internal worth and external competitiveness within relevant labor markets
  • Reward employees on the basis of work performance
  • Administer pay equitably and consistently
  • Establish a compensation policy that is consistent with the judicious expenditure of funds entrusted to the university
  • Ensure accountability for compliance with The University of Texas System Board of Regents' Rules and Regulations and statutory requirements

Glossary of Terms

Use the following glossary of terms to help you understand various aspects of the university's compensation system.

  • Benchmarks: The standards used as a basis for comparison or measurement.
  • Benefit Replacement Pay: A portion of salary that eligible individuals receive to replace the state-paid FICA, a benefit no longer provided.
  • Classification: A group of positions sufficiently similar in content of duties and responsibilities that the same university title is assigned to each position.
  • Classify: The assignment of a position to a classification.
  • Compensation: All forms of financial returns and tangible services and benefits employees receive as part of an employment relationship.
  • COLA: An annual cost-of-living adjustment in wages to offset a change in purchasing power, such as a change measured by the Consumer Price Index.
  • Direct Compensation:
    • Base salary
    • Premium payments (overtime, longevity pay, hazardous duty, shift differential, on-call pay, benefit-replacement pay)
    • Contingent programs (achievement awards, merit pay, incentive pay)
  • Effective Date of a Reclassification: Normally no earlier than the first day of the month in which Human Resources receives the reclassification document. Retroactive actions may affect overtime exemption status (FLSA) and pay. Temporary reclassifications are normally effective the date an employee is temporarily assigned duties and responsibilities that support a different classification.
  • Essential Functions: The primary job functions or tasks that an individual must be able to perform with or without a reasonable accommodation.
  • Exempt Job: A job not subject to the minimum wage and overtime provisions of the Fair Labor Standard Act.
  • Fair Labor Standards Act (FLSA): Federal legislation that sets the federal minimum wage, overtime pay, equal pay, record keeping and child labor standards for employees who are covered by the act and are not exempt from specific provisions.
  • Indirect Compensation:
    • Protection programs (social security, workers' compensation, unemployment compensation, pension plans, health, dental, vision, life, accidental death and long-term disability insurance)
    • Paid leave, when employees are not at work (vacation, holidays, jury duty, sick leave, military leave, etc.)
  • Intangible Compensation: Non-monetary rewards (work/life balance, alternative work schedules, on-the-job training, development opportunities, etc.).
  • Job Analysis: Systematic study of jobs to identify the observable work activities, tasks and responsibilities associated with a particular job or group of jobs.
  • Job Code: Identification numbers assigned to designated job titles.
  • Job Description: An official, written description of a job, which includes information regarding the general nature of the work to be performed and specific responsibilities, duties and qualifications.
  • Job Title: A specific name given to a particular job that is used to identify that position.
  • Mean Wage: The average wage for a worker in a specific position or occupation, which is determined by adding together the total wages for all incumbents in a specific position or occupation and then dividing it by the total number of incumbents.
  • Median: The middle value in a series of values arranged in rank order.
  • Median Wage: The value between the highest paid 50% and the lowest paid 50% of workers in a specific position or occupation.
  • Merit Pay: An adjustment to individual salary based on performance.
  • Non-Exempt Job: A job subject to the minimum wage and overtime provisions of the Fair Labor Standard Act.
  • Overtime: Under the Fair Labor Standards Act, working more than 40 hours in a workweek. Non-exempt employees must be paid at least one and a half times their normal wage rates or receive compensatory time for all hours worked in excess of 40 in any workweek.
  • Pay Plan: A structure for classifying positions into occupational families, which provides a framework for the assignment of job codes, job titles, FLSA, EEO codes and salary ranges.
  • Position: A group of duties and responsibilities requiring the services of one person for the hours per week specified.
  • Reclassification: A change in the classification or evaluation of a job assignment as a result of a significant job duty change.
  • Salary Range: The span from minimum to maximum that constitutes a pay or salary range established for a particular job.