The University’s merit increase program is designed to recognize and reward the valuable contributions of faculty and staff for their demonstrated excellence in teaching, research, and administration by paying market-competitive salaries. At the same time, it is important to note that the proposed and anticipated reductions in federal funding support to higher education makes the implementation of a competitive compensation program both for FY26 and in the future challenging. Depending on the pronouncements and policies of the federal government, further adjustments to Penn’s compensation program may be necessary.

The impacts of the rapidly changing higher education landscape on our budgets reinforce the importance of implementing this FY26 program in the most fiscally responsible manner possible. Salary increases should be merit-based and reflect individual performance relative to supervisor expectations and peer contributions. The program is not established to ensure that every individual who is making valuable contributions receives a merit increase equal to the merit pool.

Presented below are the merit increase guidelines for July 1, 2025.

Faculty Increase Guidelines

Below are the standards for faculty increases that the deans are asked to follow. The Deans will give the department chairs their guidelines at the school level regarding available resources.

• The minimum academic salary for new assistant professors will be $91,581.
• Merit increases for faculty should be based solely on performance as evidenced by scholarship, research, teaching, and service to the University and the profession.
• The aggregated merit increase pool for faculty will be 3.0 percent. Some schools/centers may have financial constraints that can only support budget growth of less than 3.0 percent. Salary increase recommendations that are below 1.0 percent for non-meritorious performance, as contrasted with general limits applied to an entire class of faculty, must be made in consultation with the Provost. Likewise, salary increases that exceed 5.0 percent must also be made in consultation with the Provost. Deans may wish to give careful consideration to salary adjustments for faculty who have a strong performance record but whose salaries may have lagged behind the market.

Staff Increase Guidelines

• The aggregated merit increase pool for staff will be 3.0 percent. The merit increase range is zero to 5.0 percent. Individual merit increases may not exceed 5.0 percent regardless of a staff member’s performance rating.
• Aggregated merit increases within a school/center may not average more than 3.0 percent regardless of staff performance rating distributions; however, increases may average less if a school/center establishes a lower percentage merit pool based on financial constraints.
• Staff in monthly-paid, weekly-paid, or limited-service positions are eligible for a merit increase if their time type is full-time (including phased retirement) or part-time and they were employed with the University on or before February 28, 2025. The following groups are not eligible: student workers, contingent workers, temporary workers, interns, residents, postdoctoral trainees, staff on unpaid leave of absence, staff on long term disability, and staff who are covered by collective bargaining agreements.
• The merit increase program is designed to recognize and reward performance within the parameters of the merit increase budget. The foundation of this program is the performance review in Workday, which documents each staff member’s performance and contributions and establishes performance goals for the new fiscal year. Performance expectations should be raised each year as staff grow in experience and job proficiency.
• Merit increases should correlate to performance ratings. Supervisors should strive for differentiation, using the full rating scale to reinforce a culture of excellence and growth. Performance ratings and merit increases should reflect a normal bell-shaped distribution for all staff. If performance does not meet expectations, no increase should be awarded.
• All staff must receive a performance review for the next review cycle whether or not they receive merit increases. Schools/centers are requested to submit performance reviews in Workday by June 13, 2025. The Division of Human Resources Staff and Labor Relations is available to discuss performance management issues.
• The merit increase program does not include bonuses, the same as in prior years.

The Division of Human Resources Compensation is available to discuss specific merit increase parameters with schools/centers.

—John L. Jackson, Jr., Provost
—Craig Carnaroli, Senior Executive Vice President