The Compensation and Classification Office is responsible for developing compensation programs, policies, and approaches that meet the unique needs of our academic and business units.
The Compensation and Classification Office is responsible for developing compensation programs, policies, and approaches that meet the unique needs of our academic and business units.
Revised April 3, 2025
The mission of the University of Michigan (“University”) is to serve the people of Michigan and the world through preeminence in creating, communicating, preserving, and applying knowledge, art, and academic values, and in developing leaders and citizens who will challenge the present and enrich the future.
Scope
This compensation philosophy applies to faculty and staff positions across the University.*
For most schools, colleges and units (“SCUs”), base pay is the primary compensation. Base and variable pay may be combined to meet the needs and circumstances of individual SCUs. Total compensation is the sum of base and variable pay (if applicable) and benefits programs.
Total Compensation Philosophy
The University compensates employees in ways that reward contributions, recognize performance, encourage growth and development, and designs and delivers an array of benefits to provide employees and retirees with health, retirement, and other work-related benefits to address their needs. The University believes that healthy and secure faculty and staff are best able to contribute to the accomplishment of the University’s mission. The University expects employees to be informed about the University’s benefit offerings to make choices wisely and to understand and accept the implications of their choices.
Principles of the total compensation philosophy:
Designed to attract, retain, reward and motivate the productivity and commitment of highly qualified, diverse faculty and staff.
Recognizes internal and external market pressures in designing total compensation practices.
Provides compensation that is competitive with relevant labor markets.
Reflects the contribution, content, and complexity of the work being performed.
Includes periodic increases to salary that are primarily based on judgments of merit, guided by regular appraisal of individual work performance.
Recognizes University service when it is a contributing factor to performance effectiveness.
Provides flexibility appropriate to the dynamic challenges facing the University and accommodates differences across the SCUs and regional campuses.
Offers flexible options for employees and retirees to choose benefits that best align to their personal needs, preferences and life events.
Provides benefits through a combination of fiscally responsible University contributions and employee or retiree contributions.
Designed to enable employees to take advantage of tax-related savings, when legally possible and fiscally prudent.
Provides guidance to support employees making educated choices about their benefits.
Supports consistency, clarity, and transparency in pay administration.
Does not practice or tolerate unlawful discrimination in compensation and pay administration practices.
The primary responsibility for determining pay rests at each local SCU with central guidance provided on pay practices, frameworks and compliance.
Market considerations, fiscal prudence, regulatory demands or University policy decisions may cause the University to change its compensation and benefits practices.
*Compensation approaches may vary by SCU, campus and for those covered by collective bargaining agreements.