Faculty salaries at Waterloo

The faculty salary structure at Waterloo is a bit complicated. Let us break it down for you.


How salaries and increases work

Your salary changes annually based on two main factors:

  • the annual scale increase, determined in negotiations, and
  • the selective salary increase, determined by your annual performance rating, and a couple other factors we'll explain later.

Both increases are added to your nominal full-time salary as of May 1 each year. In addition, you might receive an Outstanding Performance Award. We’ll look at each of these components in turn.

First: floors and thresholds

Salary floors ensure that new faculty hired at Waterloo receive no lower a salary than the floor for their rank, and that current faculty members receive a salary no lower than the floor for a rank after promotion to that rank (in practice, most members’ salaries have broken through the floor of the next rank before they are promoted).

The salary thresholds have a more significant impact on members’ salaries, as they slow down the rate of increase in an individual’s salary over time, reallocating resources to those with lower incomes according to the formula laid out in section 13.3.3 of our Memorandum of Agreement (MoA) with the University.

(See the current salary floors and thresholds at the top of this page.)

Now, on to the increases:

1. Scale increases

This amount is determined in compensation negotiations and is a percentage increase applied to your nominal salary, taking effect May 1 each year.

2. Selective salary increases

Your selective salary increase is a function of your annual performance rating (colloquially referred to as “merit”) and your salary relative to the thresholds (T1 and T2). This amount is also applied to your salary as of May 1 of each year.

Merit ratings: actual-R and adjusted-R

Here’s where the thresholds come in. When your salary is below the first threshold (T1), your selective increase is based on the full merit amount. Once you hit a threshold, your merit rating is adjusted to slow down the rate of increase:

  • if your salary is below T1, your actual-R and adjusted-R are the same;
  • if your salary is at or above T1 and below T2, your adjusted-R value is actual-R less 0.75;
  • if your salary is equal to or greater than T2, your adjusted-R value is actual-R less 1.25.

The Selective Increase Pool: How merit translates to dollars

Each Faculty is allocated funds annually to pay for merit increases. This pool of funds (called the Selective Increase Pool) is based on the Selective Increase Unit (SIU), a historically determined dollar amount that increases each year by the scale increase in the salary settlement. The pool is calculated based the SIU and the number of faculty members at each threshold (see the formula outlined in Section 13.3.2 of the MoA).

The actual dollar value of an adjusted merit rating of 1.0 in a given year is determined by adding up all the individual adjusted ratings in your Faculty and dividing that number into the total value of the Faculty’s Selective Increase Pool.

An example

Let’s say that you’ve received a merit rating of 1.75 (actual-R), and that an adjusted-R merit rating of 1.0 in your faculty is valued at $2000. Then:

  • if your salary is below T1, your increase is $2000 x 1.75 =$3500;
  • if your salary is between T1 and T2, your adjusted-R value is 1 and your increase is $2000 x (1.75-0.75) =$2000;
  • if your salary is equal to or above T2, your increase is $2000 x (1.75-1.25) = $1000.

3. Outstanding Performance Awards

Each Faculty receives an additional amount equal to 10% of its Selective Increase Pool for Outstanding Performance Awards (OPAs).

Members in each department or school whose annual performance rating for the current year is in the top 20% may be considered for an OPA. The names of all members so identified are submitted to the Dean of the Faculty who, in consultation with the vice president academic & provost, reviews the performance of everyone on that list and identifies a subset from that list who receive a special salary increase equal to one SIU. This increase is applied to the member’s nominal full-time salary.

Eighty percent of these awards are made for outstanding performance in teaching and scholarship. The remaining 20% may be given on the basis of outstanding service.