Managing Compensation

Managing Compensation Icon

The objective of the university compensation program is to establish and maintain a competitive pay structure and to provide tools to make individual salary decisions that help recruit, retain, and motivate highly qualified employees. Guidelines and practices have been established by the university to provide managers with an effective means to manage employee compensation and to adhere to regulatory requirements.

For information on guidelines around employees working on a university holiday, please consult the Time Off and Leave Guide or contact your HR Business Partner. For information on pay guidelines and other compensation issues, please contact your HR Business Partner.



Guidelines in this section detail procedures and regulations for overtime and premium pay.


At the university, the workweek begins on Sunday at 12:00am and ends on Saturday at 11:59pm.

Nonexempt Employees

Nonexempt employees are expected to accurately document all time worked using the university’s time reporting system. Managers must authorize overtime before the time is worked. For more information on timekeeping, please consult the Time Reporting Systems and Guidelines section.

To determine whether overtime pay is owed to a nonexempt employee for hours worked in excess of 40 in one workweek, only hours actually worked are counted. A bona fide meal period (when a nonexempt employee is completely free from duties) and hours in which the employee received compensation but did not perform work (such as holiday pay, annual leave, or sick leave) are excluded from the calculation.

The university does not pay overtime for work exceeding eight hours in a single day unless a contract or local laws or regulations specify otherwise. However, if the total hours worked during the workweek exceed 40, overtime will be paid.

Nonexempt employees with a regular workweek of 35 hours will be compensated at their regular hourly rate for hours worked over 35 up to a maximum of 40 in any one workweek. All working hours exceeding 40 in a workweek must be paid at the rate of one and one-half times the regular hourly rate.

Nonexempt employees in more than one position who work more than a combined total of 40 hours in a workweek must be paid overtime pay for hours worked in excess of 40 at one and one-half times the employee's regular hourly rate. The regular hourly rate in such situations is calculated by adding all pay from all rates for all hours worked and then dividing that amount by the total number of hours worked in all positions.

When the workweek includes hours for which premium pay is owed, premium pay will be included with other compensation to determine the regular hourly rate on which overtime pay is calculated, unless otherwise provided by law. However, premium pay generally will not be provided for any hours for which the employee is entitled to overtime pay.

Exempt Employees

Exempt employees, such as executive, professional, and supervisory positions (as defined by the FLSA), are expected to fulfill their responsibilities on an ongoing basis and are compensated for the duties they perform, not the hours they work. Exempt positions are not eligible to receive overtime pay and are not subject to other provisions of the Fair Labor Standards Act (FLSA) that apply to nonexempt employees.

Managers must ensure that an exempt employee performs the functions defined in the classification description.

Premium Pay

All requests to establish premium pay must be submitted in advance, using the Request for Premium Pay form, to Compensation and be accompanied by the concurrence of the respective Vice President or Dean.

An employee is not eligible to receive more than one form of premium pay for any hour worked. If two or more forms of premium pay would otherwise apply, the employee will receive only the highest amount. An employee is not eligible to receive premium pay for any hour worked for which overtime pay is due, except when the premium pay would be higher than the overtime pay. In this case, the employee will receive the higher amount.


Within a department, managers can recognize or reward employee contributions or productivity with a lump-sum, one-time (bonus) payment. Bonus payments are financial rewards outside of the merit increase program. In special circumstances, bonus payments may also be used as a recruitment and retention tool. Specified and approved purposes include:

  1. Providing an incentive for a prospective candidate to accept an offer of employment at GW, consistent with reasonable market practices ("Hiring Bonus"), or
  2. Recognizing outstanding and exemplary performance over the course of the rating period ("Performance Bonus," also known as a "bonus in addition to merit"), or
  3. Providing a non-base-building financial reward in recognition for performance to staff whose base compensation exceeds the prevailing market rate ("Merit Bonus," also known as a "bonus in lieu of merit"), or
  4. Recognizing the successful completion of a major project of institutional importance, consistent with reasonable market practices ("Project Bonus"), or
  5. Retaining an employee with a unique skillset or of critical importance to the institution ("Retention Bonus").

Managers are responsible for ensuring that bonus payments are provided in a fair and equitable manner. For assistance or additional guidance regarding any bonus payment discussed in these guidelines, please contact your HR Business Partner.


Hiring Bonus

A Hiring Bonus is typically used in situations where reasonable market practices and budget climate support the practice of paying additional compensation to a new hire if:

  • GW is competing with another prospective employer, i.e. there is an active, competing offer from another organization, or
  • the candidate is uniquely qualified or will fill a highly technical or specialized role that generally requires a lengthy (greater than six months) and expensive search process (i.e. use of an external search firm), or
  • GW seeks to bridge any differences in base compensation, such as candidate salary expectations vs. what can be supported, that manifest during the search process.

Generally, Hiring Bonuses are appropriate for staff who have no current or previous employment relationship with the university. It is not appropriate to request a Hiring Bonus to an otherwise eligible employee for accepting another position within a different GW division or school, whether a lateral move or promotional opportunity. However, previous employment as a student employee is excluded from this provision.


Performance-based Bonuses

There are two types of bonuses associated with work performance and the annual merit process. A Performance Bonus, also known as a bonus in addition to merit, recognizes outstanding and exemplary performance over the course of the rating period that directly supports organizational goals or results in significant, documented cost savings or process improvement. In these cases, the employee would receive a merit increase in addition to the bonus.

A Merit Bonus, also known as a bonus in lieu of merit, provides a financial reward to staff who may not eligible for merit if their base compensation exceeds the maximum of the salary range for that position, or if their base compensation exceeds the appropriate market rate, based on the scope of the positions and the employee’s overall performance contribution.

To be eligible to receive a Performance-based Bonus, an employee must:

  • be an active, regular, benefitted employee working at least 20 hours/week at the time of payment, and
  • have successfully completed their Introductory or Transfer Employment Period in their current position, and
  • have a recent signed performance review on file with HRMD (as applicable).

Please note that employees receiving a Performance Bonus should have an overall performance rating of at least Frequently Exceeds Expectations and employees receiving a Merit Bonus should have an overall performance rating of at least Fully Achieves Expectations


Project Bonus

Individual or group Project Bonuses are a way to recognize and reward exceptional effort upon the successful completion of a major project that is:

  • completed on time, at or under budget, and
  • strategically important to the goals and performance of the division, school, or department, and
  • consistent with reasonable market practices

Employees receiving a Project Bonus should have an overall performance rating of at least Fully Achieves Expectations. Depending on the scope of the project, a Project Bonus may be appropriate for various team members that participate on the project team; basic eligibility determination should be made in advance of project completion. The key to a successful project bonus is creating the incentive plan in advance of the project and communicating to project team members.


Retention Bonus

A Retention Bonus is typically used in situations to provide a financial incentive to retain an eligible, key employee with unique skills or abilities, whose contribution is critical to the success of the division or school, or to provide a financial incentive for a key employee to stay until the end of a major project.

Employees receiving a retention bonus should have an overall performance rating of at least Frequently Exceeds Expectations and be active at the time any payment is made or scheduled to be made. Finally, structured retention bonuses should be developed as a proactive step and not used simply for counter offer situations


Regular employees are considered for rate or salary increases based on work performance on a schedule determined by senior management of the university.

Annual Merit Increase Process

Regular employees will be considered for merit increases related to work performance. Guidelines for merit rate increases are recommended by Human Resource Management and Development and approved by senior management of the university and are based on a pay-for-performance principle. For more information, please see the Performance Management section.


Rate Adjustments for Temporary or Wage Account Employees

The university does not have a formal program for scheduled merit rate adjustments for temporary/wage account employees. Department heads may give increases, at their discretion, based on merit and the availability of funds with prior approval from Compensation.


Notification of Changes in Pay Rate or Salary

Managers are responsible for advising employees in their departments of any change in an employee's pay rate or salary after receiving notification that such a change has been approved by Human Resource Management and Development.