Forget anniversaries; raises move to October
Energy Systems has made the decision to move the merit program to a common date for salaried employees. For the exempt, that date will be October 1, and for the nonexempt, it’s the first Monday in October. This move offers several advantages:
- it improves the linkage between the performance management system (DPPR) and salary increase actions;
- it increases market competitiveness by delivering impact of full merit increases at a common date;
- it helps maintain equitable salary relationships by eliminating differences in timing of increases throughout the year;
- it’s consistent with our fiscal year; and
- it reduces administration.
Many companies use a focal date salary program, including Lockheed Martin Corporation, ORNL and many DOE contractors. Currently Energy Systems’ salaried employees receive salary increases throughout the calendar year, generally 12 months since their last increase. The transition will occur in two steps. First, for CY 1999, merit increases will be shifted to the first three months of the year as shown below:
| 1998 Merit Increase Date | 1999 Merit Review |
| Jan. through April | Jan. |
| May through August | Feb. |
| Sept. through Dec. | March |
To preserve equity, increases granted in less than 12 months will be prorated. For example, an employee programmed for a 4 percent annual increase in June would receive their increase in February, eight months since last increase. They would receive an actual increase of 8/12 X 4.0 percent = 2.7 percent.
The following chart lists the 1998 merit date, the prorating factor for the CY 1999 program (months since last increase divided by 12), and an example of how a 4 percent annual increase would be prorated.
| 1998 Merit Date | Prorating Factor | Actual Increase Percentage |
| January | 12/12 | 4.0 |
| February | 11/12 | 3.7 |
| March | 10/12 | 3.3 |
| April | 9/12 | 3.0 |
| May | 9/12 | 3.0 |
| June | 8/12 | 2.7 |
| July | 7/12 | 2.3 |
| August | 6/12 | 2.0 |
| September | 6/12 | 2.0 |
| October | 5/12 | 1.7 |
| November | 4/12 | 1.3 |
| December | 3/12 | 1.0 |
The second step will occur in October 1999 when the company will implement merit actions for FY 2000. These increases also will be prorated for the months since last increase. This step will complete the transition process. Beginning October 2000, merit increases for the FY 2001 salary program will be on a twelve-month review.
Movement to a focal date increase program also will result in timing changes for the performance and promotion reviews. Performance reviews usually begin in September, with merit increases beginning in January. With increases occurring in early October, the process will have to begin earlier. In 1999, the performance period will be nine months (from October 1998 to June 31, 1999), and reviews will be completed in August and communicated to employees by the end of September.
Promotion timing will be separated from the merit increase date to allow adequate time for review of promotion requests. Promotion recommendations will be requested during merit planning and awarded in June for 1999 and in April thereafter (2000, 2001, etc.). Promotion increases will not be prorated. The timing of promotions resulting from successful selection through the Job Opportunity System or Job Advertising System will coincide with assumption of the new job responsibilities.
