Sign-on and Retention Bonuses for Permanent Employees Policy 634

I. Purpose
This Policy establishes specific definitions and procedures to enhance the university's flexibility in attracting, retaining, and rewarding a talented workforce by providing sign-on and retention bonuses to permanent (benefits-eligible) employees of The University of North Carolina School of the Arts (UNCSA). This Policy outlines the parameters for eligibility and approval for awarding such bonuses as outlined by UNC Board of Governors Regulation 300.2.14.2[R] for Exempt Professional Staff (EPS) employees and the Office of State Human Resources Sign-On and Retention Bonus Policy for SHRA employees. Any such bonus will be paid only in accordance with the provisions of this policy. There is no automatic entitlement to sign-on or retention bonuses by any university employee.

II. Scope of Applicability
This Policy applies to all permanent (benefit-eligible) employees at UNCSA, except the Chancellor.

III. Background 

A. The UNC Policy 300.2.14.2 [R] Regulation on Delegated Authorities Regarding Non-Base Salary Compensation for University Employees Exempt from the State Human Resources Act permits the university, as an employer, to provide bonus compensation to attract, retain, and reward a talented workforce in the form of bonus based programs including sign-on and performance.

B.  The N.C. Office of State Human Resources Sign-On and Retention Bonus Policy permits the university, as an employer, to provide sign-on and retention bonuses to employees subject to the State Human Resources Act (SHRA) to attract, retain, and reward a talented workforce.

IV. Policy

A.    Policy Statement

Within the parameters outlined below, sign-on and retention bonus compensation may be provided to permanent employees (benefit-eligible) for reasons relevant to attracting or retaining the highest-quality faculty and staff. All decisions regarding any bonus compensation must be consistent and based on relevant and appropriate factors.  

1. Decisions concerning sign-on and retention bonus compensation must not discriminate and may not be based in whole or in part on any employee's protected status.

2. No University employee is automatically entitled to a sign-on and retention bonus. 

B. Sources of Funds

Bonuses may be funded from any source, including state or non-state appropriations, so long as the funding source permits an expenditure for this purpose. For state funds, such use must be permissible under the policies of the Office of State Budget and Management. All bonus programs are subject to funding availability.  There is no guarantee that funds will be available for this purpose in any given fiscal year. 

C. Eligible Employees and General Requirements

1. Under this policy, only candidates for or employees in permanent SHRA and EPS positions are eligible for bonuses. 

2. The University will not award any bonus under this Policy to an employee who:

a. has received an end of appointment notice;

b. did not receive an overall rating of at least “Meeting Expectations” on their most recent annual appraisal, or if an annual performance appraisal was not required, is deemed to not be in “good standing”;

c. is currently working under a performance improvement plan; or

d. is no longer actively employed in their position. 

3. An employee may receive either one sign-on bonus or one retention bonus, but not both, within any 24-month period. Receipt of a sign-on or retention bonus does not preclude an employee from receiving a performance bonus as may be allowed under separate University policy. 

4. Receipt of a retention bonus does not preclude an employee from receiving a retention base salary increase for a competitive offer as allowed by existing salary administration policy and regulation. 

D. Required Agreement and Recoupment

1. Repayment Agreement

Before an employee may receive a sign-on or retention bonus, the employee must sign an agreement under which the employee agrees to repay the bonus, in whole or part, if the employee transfers to another state agency or if their employment with the University terminates, either voluntarily or involuntarily, before the completion of a period of consecutive service of 12 months. This 12-month period begins on the employee's start date for sign-on bonuses and on the date of initial payment for retention bonuses. Upon approval of an employee bonus request, the employee will be notified in writing with information regarding eligibility for the bonus, method of payment, and criteria for repayment if the bonus provisions are not fulfilled. 

2. Exemptions from Repayment

An employee is not required to repay any amount of a sign-on or retention bonus if the employee's transfer or termination of employment was due to:

a. Death or severe illness requiring hospitalization of the employee or the employee's parent, spouse, sibling, or child; 

b. Employee was unable to perform all of the position's essential duties because of a medical condition;

c. Elimination of the employee’s position; or

d. A reduction in force. 

3. SHRA Employees
Specific repayment requirements for SHRA employees are outlined in the State Human Resources Manual, Sign-On and Retention Bonus Policy.

E. Sign-On Bonuses

1. Criteria

Sign-on bonuses are discretionary and intended to serve as a recruitment incentive. A sign-on bonus must be based on at least one of the following specific, demonstrated recruitment needs:

a. For a Specific Job Classification

To enhance the ability to recruit qualified candidates during labor market shortages, a school or division may recommend offering sign-on bonuses to candidates hired into positions for a specific job classification within the University, division or unit. To qualify, the school or division must demonstrate that the job classification is critical to the University’s mission, there is a labor market shortage, and the inability to hire qualified candidates would impair delivery of essential services. To qualify, the school or division must demonstrate that the job classification is critical to the University's mission, there is a labor market shortage, and the inability to hire qualified candidates would impair delivery of essential services.

b. For an Individual Position

A division or school may request to offer a sign-on bonus for an individual position if the division or school can demonstrate that the position is critical to the University’s mission, the labor market is particularly competitive for the skillset and experience required for that position, and the University’s inability to recruit and hire a qualified candidate would negatively affect the delivery of essential services. This option is typically reserved for instances where the position is the sole individual, or one of two individuals, fulfilling a role at the University. 

c. For a Moving Allowance

A division or school may provide a sign-on bonus in lieu of a moving allowance if a moving allowance is not otherwise provided separately.

F. Retention Bonus 

1. Criteria

Retention bonuses are discretionary and intended to enhance retention of employees whose knowledge, skills, and abilities are vital to fulfill the school or division's goals and/or strategic plan and whose loss would negatively affect University operations. A retention bonus may only be awarded when a school or division can demonstrate and document at least one of the following specific, individual retention needs:

a. For a Specific Job Classification

In parallel with sign-on bonuses for specific job classifications, a school or division may elect to provide retention bonuses to retain a group of employees in a specific job classification when the University is offering sign-on bonuses as a recruitment incentive to attract qualified candidates for positions in that job classification. To qualify, the school or division must demonstrate that the job classification is critical to the University's mission, there is a labor market shortage, and the loss of employees in that role would impair the delivery of essential services.

b. For an Individual Position

A school or division may elect to offer a retention bonus to an individual in the following scenarios:

1. In parallel with a sign-on bonus for an individual position, to retain an employee when the University has offered a sign-on bonus as a recruitment incentive to an individual in a similar critical position within the same school or division and the school or division can demonstrate the labor market is particularly competitive for the skillset and experience required for that position and losing the individual would affect the delivery of essential services; or

2. To retain an employee who is likely to leave the University to an entity external to the University and the school or division can document conditions in the labor market that demonstrate a heightened risk for loss of critical talent that would negatively affect University operations.

2.  Requirements and Limitations for Sign-On and Retention Bonuses

a. To be eligible for a sign-on bonus, the candidate must not have worked for the University as a permanent employee in the last 12 months.

b. To be eligible for a sign-on or retention bonus, the employee must work at least 20 hours per week.

c. An employee may receive either one sign-on bonus or one retention bonus, but not both, within any 24-month period. Receipt of a sign-on or retention bonus does not preclude an employee from receiving a performance bonus as otherwise allowed by policy. 

d. Receipt of a retention bonus does not preclude an employee from receiving a retention salary increase for a competitive offer as allowed by existing salary administration policy. 

e. Retention bonuses may not be awarded in an across-the-board manner to broad classes of employees unless they are awarded in conjunction with sign-on bonuses based on critical labor market needs as identified in Section IV.E.1 for a specific job classification.

f. A sign-on bonus or retention bonus may be paid in one lump sum or paid out in installments over the 12 months following the hire date or following the date of retention.

g. Any EPS sign-on bonus or retention bonus may not exceed the lesser of $25,000 or 20 percent of the annualized base salary of the position without seeking the approval of the UNC System president. 

h. Any SHRA sign-on or retention bonus exceeding 10% of the position’s market/reference rate requires the UNC System approval.  Actions above 15% of the position’s market/reference rate require the approval of the Office of State Human Resources (OSHR). 

i. Senior Administrative Academic Officers (SAAOs) may be eligible for sign-on and retention bonuses if approved by the Board of Trustees. 

j. Sign-on and retention bonuses are not subject to retirement contributions to either the Teachers’ and State Employee’s Retirement System or the UNC Optional Retirement Program.

G. Approvals 
The University Board of Trustees may delegate authority to approve bonuses under this policy to the Chancellor, except for SAAO. Upon approval of an employee bonus request, the employee will be notified in writing with information regarding eligibility for the bonus, method of payment, and repayment criteria if the bonus provisions are not fulfilled. 

1. Process
Divisions must ensure funding is secured before requesting any sign-on or retention bonuses.  All requests for SHRA and EPS staff bonuses must be submitted to the Human Resources Department. Requests for any applicable bonuses for HER faculty must be submitted to the Office of the Provost and then to the Human Resources Department for review. Such requests must include the documented need and/or justification for the requested bonus.