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UD Merit Increment and Bonus Policy

 

  1. Merit Increment  

  1. The Merit Increment Policy ensures that salary increases are linked to individual performance, rewarding employees (faculty & staff) for their contributions and efforts. Merit increments are an important part of employee retention and motivation, fostering a culture of accountability and continuous improvement.

  2. Eligibility for Merit Increments

  1. Employees must complete at least one year of continuous service with the company before being eligible for a merit increment.

  2. Participation in the annual performance appraisal is mandatory to be considered for a merit increment.

  3. Only full-time employees who achieve a minimum performance rating of “Meets Expectations” or higher are eligible.

  4. Employees under disciplinary action or a performance improvement plan are not eligible for merit increments until they meet satisfactory performance standards as outlined in their development plan.

  5. There shall be a budget allocated in the UD overall budget for the increments.  

 

             3. Increment Calculation Method

 

    1. The annual merit increment budget will be up to 5% of the total payroll budget, with 3% of the payroll allocated to employee performance and an additional 2% allocated to the cost-of-living allowance (COLA).

    2. Merit increments will be calculated as a percentage of the employee’s total salary, based on the performance appraisal rating. The specific percentage increase will be determined by the following guidelines:

     

    Performance Rating

    Percentage Increase

    5- Outstanding

    3%

    4- Exceeds Expectations

    2.3%

    3- Meets Expectations

    1.5%

    2- Partially Meets Expectations

    0.8%

    1- Below Expectations

    0%
    C. Budgeting for salary increases will be based on both University and individual performance. The salary increase pool will be calculated as part of the annual budgeting        process, reviewed and approved by the President. 
    D.     The guidelines for salary increases will be prepared every year by the HR Manager and Finance Manager to determine the levels of increase to be available. 
    E. Employees rated “Outstanding” will receive the highest percentage increases, while those rated “Below Expectations” will not be eligible for any increment.

 

                 4. Merit Increment Process

  1. Performance appraisals will be conducted annually, with ratings finalized by the HR department in consultation with departmental heads. 

  2. The HR department will review and validate the recommendations to ensure consistency and alignment with the overall salary budget and increment pool.

  3. Final approval of merit increments will be obtained from senior management. Employees will be notified of their merit increment in writing, with details on the percentage increase and the effective date.

  4. In all cases, a salary increase will only be granted to an employee once in a year and is subject to the performance appraisal process being completed.

  5. There is no contractual right to a salary increase.

            B.  Bonus Policy

1. The Annual Bonus rewards staff for their contributions towards achieving both individual and company-wide goals, aligning staff performance with the overall success of the University of Dubai. The bonus is designed to promote motivation, engagement, and recognition of high performance.

2. Eligibility for Annual Bonus

  1. Staff must have completed at least one year of continuous service by January 1st of the bonus year to be eligible for the annual bonus.

  2. Employees who are issued a valid warning letter within the year are not eligible for the annual bonus.

  3. Staff who resign or are terminated before the end of the year will lose any right to the bonus unless agreed otherwise by the President.

  4. Participation in the Annual Bonus scheme is at the discretion of management and can be withdrawn at any time.

  5. Defining the Annual Bonus Pool, as part of the annual budgeting process, the value of the Annual Bonus Pool is recommended and approved by the President.

  6. There is no contractual right to a bonus.

3. The Bonus Calculation is based on both company-wide profitability and individual performance. The target bonus is defined in "months of basic salary" as follows:

 

4. Distribution Criteria:.

  1.  The employee’s annual performance rating.

  2.  The employment status of the employee at the time of bonus disbursement.

5. The President has final approval of bonuses.  

  

6. Communication and Confidentiality: once the merit increment, promotion or annual has been approved, the employee will be formally notified by the HR department in writing. This notification will include:

  1. The percentage of the merit increment or details of the new salary for promotions.

  2. The effective date of the salary adjustment or promotion.

  3.  An outline of the new role and responsibilities for promotions.

7. Managers will also meet with employees to discuss the outcomes of their performance reviews and provide context for the merit increment or  bonus, reinforcing expectations for the upcoming performance period.

8. All performance appraisals and merit increments considerations are confidential and will be handled with the utmost discretion.

9. The HR department and managers involved in the review and approval process are responsible for maintaining confidentiality and ensuring that any details related to salary progression are not disclosed to unauthorized individuals.

10.  Employees are expected to keep details of their salary adjustments or promotions confidential and not discuss these matters with other colleagues, to maintain fairness and prevent workplace conflicts. 

 

C. Non-Compliance/Violations of Policy:

Violations of Policy are grounds for dismissal or other disciplinary action, appropriate to the circumstances of the particular violation and having as a primary objective furtherance of the University’s interest in preventing them and making clear that violations are neither tolerated nor condoned.

  1. Disciplinary action will be taken, not only against individuals who authorize or participate directly in a violation of the Policy, but also against:

    • any employee/s who may have deliberately failed to report a violation of the Policy.

    • any employee/s who may have deliberately withheld relevant and material information concerning a violation of this Policy; and

    • the violators managerial superiors, to the extent that the circumstances of the violation reflect inadequate leadership and lack of diligence.