Bonus Payment Policy and Procedure

Purpose

The purpose of this policy and procedure is to ensure that recommendations for, and the approval and payment of, staff bonuses are applied in a fair and consistent manner in accordance with the University's overall remuneration strategy and structure, and its employment contracts.

Organisational scope

This policy and procedure apply to all permanent and fixed-term staff at the University.

Definitions

BPR Form

Bonus Payment Recommendation Form

Performance and Development Review (PDR)

Refers to the review processes for both professional and academic staff

Content

1. General Principles

   1. The University acknowledges that, from time to time, an additional monetary payment in the form of a bonus may need to be made to a staff member to recognise and reward the achievement of a certain exceptional task or set of tasks.
   2. The University believes that the investment in a bonus payment should occur as soon as possible after the achievement of the task or set of tasks for which a bonus payment is to be made.
   3. Recommendations and approvals of a bonus payment are not part of the Performance and Development Review (PDR).

2. Policy

   1. There may be circumstances where a staff member has undertaken substantial additional work or special projects, over and above normal duties or expectations, that warrant recognition. In such a case, the granting of a one-off bonus payment may be appropriate.
   2. A bonus payment cannot be made for work that has already been or will be rewarded in other ways. For example, a bonus would not be paid:
      1. for work which has already been recognised through a contractual payment of a Higher Duties or other Allowance, or
      2. by way of salary movement following a PDR, or
      3. as a substitute for being at the top of a scale or there being no progression or
      4. where the work contributes to career development and/or is a consideration when applying for promotion.
   3. A bonus payment request may be made at any time during the year and should ideally be initiated immediately following the achievement of the specific task (or set of tasks) for which a bonus is being recommended, but no later than twelve months after the task/s have been achieved.
   4. A bonus would not normally be made to the same staff member more than once in every 12 months. Where this occurs, consideration must be given as to why the circumstances re-occur to see if there are other aspects of the role, including workload or job design, that require review and possible revision of expectations, or job description and possible re-evaluation.
   5. Bonus payments should be in multiples of $100 with a minimum of $500 and, as a general guide, should not normally exceed 2 per cent of a staff member’s annual salary. When deciding on the amount to recommend for a bonus payment, the nature of the work performed should be taken into consideration.
   6. Bonus payments will not be prorated for part-time staff unless it is clearly stated that the payment is to be pro-rata.

3. Approval Delegations

   1. The delegation of authority for the approval of bonus payments is:
      1. Divisional Heads – up to and including $2,500
      2. HR Director – exceeding $2,500

4. Bonus Reporting

   1. Human Resources will provide an annual report on bonus payments to the Vice-Chancellor and the Diversity and Inclusion (DEI) Manager / Pay Gap Steering Group.

5. Procedure

   1. The immediate supervisor or manager completes the BPR Form. The application will include a full justification in accordance with this policy and procedure and a copy of the most recent PDR form. Academic reviews may be accessed through the Progress system.
   2. The Divisional Head or Human Resources Director, as per the delegation, will consider the recommendation and either:
      1. Request further details or an amendment, or
      2. Approve, or not approve, the bonus payment.
   3. If approval has been obtained, the Divisional Head:
      1. writes to the staff member concerned, and copies the manager, informing them about the payment and the reasons for it; and
      2. submits to Payroll, Human Resources, the following:
         • the original, authorised BPR Form and supporting documents, and
         • a copy of the letter written to the staff member
   4. Payroll will arrange the payment and send the Form and letter for filing in the staff member’s personal file.
   5. If the application is declined by the Divisional Head, they will advise the Manager.
   6. If the application is declined by the HR Director, they will advise the Divisional Head, who in turn will advise the Manager.

Related policies, procedures and forms

• Download the Bonus Payment Recommendation Form
• Performance & Development Review Policy
• Remuneration Policy
• Employment agreements
• Academic Promotions Policy
• Guidelines for academic titles

Contact for further information

If you have any queries regarding the content of this policy or need further clarification, contact:

HR Manager, Promotions and Remuneration
Email rem.admin@otago.ac.nz