Faculty Incentive Pay Program (FIPP)

Purpose

The WVU School of Public Health (SPH) has a profound respect and admiration for the role of faculty and their contributions to a successful and thriving school.  For that reason, and to promote retention of successful research scholars, the School has established the Faculty Incentive Pay Program (FIPP) to recognize and reward recipients of external funds that enhance research, instruction, training, and public service. This program is the mechanism by which the SPH will provide incentive payments to faculty and faculty equivalents/FEAPs (hereafter referred to as faculty) who are effective in securing external funding.

To this end, the SPH incentive funds will be requested from HSC Finance from the centrally allocated funds that are recovered when faculty activity is funded by a grant or contract external to the SPH.  The incentive funds can be used in accordance with Use of Incentive Funds.

Limitation

As a general disclaimer, this program is contingent upon release of funds from the Health Sciences Center (HSC) to the SPH bi-annually.  The release of funds includes both the initial release of budgeted state funds when the incentive is originally earned, and the subsequent use of state funds deposited in state incentive funds.  Use of funds deposited in a state incentive funds is contingent upon the available funds being included in the approved annual budget and state spend limit, if applicable.  Every effort will be made in good faith by the SPH to ensure release of these funds.  Modifications to this program may be implemented at any time, as determined by the Dean of the SPH.  Such modifications may occur through amendment of this Standard Operating Guideline, following consultation with the SPH Research Advisory Council and the SPH Faculty Council.

I.        Eligibility

To be eligible to participate in the FIPP, the following minimum criteria must be met:

• The participant must have a primary appointment in the
• At least a portion of the participant’s contractual base salary must be paid from state appropriated funds allocated to the
• Participants with 12-month appointments must first release more than 25% of their centrally- allocated salary to the SPH through externally funded activity.  Externally funded salary support, after coverage of 25% of the participant’s base salary, will be allocated to the SPH incentive
• Individuals who are split-funded from centrally allocated and other sources shall be eligible to participate in that portion of their salary supported by funds centrally allocated to the
• Eligibility will be confirmed and outlined in individual offer letters.

II.      Provisions

External funding refers to Intergovernmental Personnel Act (IPA) agreements, contracts and grants awarded through, and formally accepted by West Virginia University, the WVU Research Corporation or the WVU Foundation, for research, instruction, training, or public service.  External funds that provide support for a portion of a faculty member’s SPH supported salary, not derived from cost share accounts or state general ledger sources are eligible for the FIPP.  Consideration for inclusion in the FIPP will be given to externally funded programs that are compatible with the objectives of the Departments and the SPH.  In accordance with typical research practices, eligible programs funded by federal, state or private sources must be discussed with, and approved by, the respective Department Chair and receive the approval of the Dean or his/her designee prior to being initiated.

The incentive payments are comprised of the recovered centrally allocated SPH salary dollars released by the external funding.  The eligible incentive amount will be assessed a 35% tax, 75% of this tax is allocated to the participant’s department and the remaining 25% is allocated to the Dean.  These taxes will be used to support scholarly activity at the discretion of the Chair and the Dean, respectively, as outlined in Faculty Incentive Taxes.  Cumulative payments allocated to salary enhancement shall not exceed 20% of the faculty member’s institutional base salary per fiscal year.

Additional recovered funds, beyond the 20% of institutional base allowable, will be paid to the faculty member’s incentive holding account.  These funds can be used to support software, memberships, travel, equipment, data, publication costs, student workers, grant bridge funding, and other generally accepted expenditures as outlined in the Use of Funds - Incentive that support the faculty member’s research program.

Incentive payments shall be initiated with a FIPP Agreement and shall be paid in a lump sum at the end of each reporting period, providing the individual is on payroll at both times in the given year.  Payments shall be subject to applicable withholding and issued in adherence to all prevailing laws and policies.

III.    Grant Effort Reporting Periods and Payment Schedule

12-Month Faculty Schedule

Effort on externally funded projects for 12-month faculty will be based on and coincide with the WVU’s Effort Reporting semi-annual reporting periods.

• Effort for employees on 12-month contracts will be based on the following reporting periods:
  • Effort Period 1: January 1 to June 30
  • Effort Period 2: July 1 to December 31

9-Month Faculty Schedule

• Effort for employees on 9-month contracts, will be based on the following full year period:
  • Effort Period: August 16 – August 15

Please see FAQ for more information about the 9-month schedule.

A verified, signed effort report that agrees with the effort reflected on the FIPP should be received prior to issuance of FIPP Agreements and payment of grant incentives. In instances where a verified, signed effort report that matches the FIPP has not been received, it may be possible to issue the FIPP and pay out the incentive for the period, providing no known errors or adjustments are known that would alter the incentive payment amount.  If the payment is issued without the signed effort report for the same period, once the effort report has been issued, verified, and signed, it will be compared to the FIPP that was previously issued. Should there be any differences, and providing the effort report is accurate, a reconciliation will be completed.  Any incentive payment differences will be handled as follows:

• Prior overpayments will be addressed as follows:
  • The faculty member will be given the option to submit a repayment via check or;
  • The faculty member will have the option to reduce the next period incentive payment by the amount of the overpayment. Should the faculty member not earn an incentive or not earn enough to repay the prior overpayment in the next incentive period, they will be required to repay the incentive via check.  Should the faculty member leave prior to the next incentive payout, they will be required to repay the prior overpayment via personal check.
• Prior underpayments will be addressed as follows:
  • The prior period FIPP will be recalculated, up to one prior fiscal year only, and any amount due the faculty member will be paid out either immediately, if the faculty so chooses, or will be included with the next incentive payment.  As with all other incentive payments, this payment is dependent on central releasing the state funds.
    
    

IV.    Payment Initiation and Process

The SPH Expert Business Office (EBO), in coordination with the SPH Office of Research, will generate and populate the FIPP agreement after each reporting period ends.  FIPP Agreements will be distributed to the faculty member via email, with the Chair of each department copied, after the Dean grants his approval.  The faculty members will then review and contact the EBO with any questions or modification requests related to the calculation.  Once the agreement has been finalized, the faculty member will sign and return to their Chair who will also sign and return to the EBO.  At that point, the EBO will process the incentive payment, as outlined in each agreement.

If the faculty member, chair and the EBO cannot agree upon a FIPP agreement, the Dean will make the eligibility and payment decision.

V.      Terms and Conditions

Additional terms and conditions of the FIPP are found below:

• The incentive program applies to salary that is funded by external sources during the on- contract period, this excludes all salary support funded from cost sharing and state general ledger funding. HSC Finance must grant all exceptions to this
• Incentive payment(s) shall not modify the faculty member’s institutional base
• Participation in the program is voluntary and is not mandated upon the
• No verbal commitment to participation or pay under the program is binding and only the final signatures of all required parties on the FIPP form shall constitute a commitment under the program.
• Availability of any payments under the program is subject to the release of funds from the associated externally sponsored project award.  Only salary support from active externally funded awards during the reporting period are included in the incentive pool.  The Dean, along with HSC Finance, must approve any exceptions to this rule.  Funding that is delayed to the next reporting period, but nonetheless offsets faculty salary, will be transferred to the next funding cycle whenever
• The Dean of the School of Public Health and the Vice President for Health Sciences shall grant final approval for the FIPP

VI.    Incentive Pay Calculations

Externally funded salary support, after coverage of 25% of 12-month contractual participant’s base salary, or after covering three months of summer salary payments for 9-month contractual participants, will be allocated to the SPH incentive pool.

The maximum amount of the incentive payment is 65% of the salary savings released from state appropriated funds (after coverage of 25% of the participant’s base salary) to the SPH incentive pool.  The remaining 35% will be allocated to the Dean (8.75%) and the participant’s Department Chair (26.25%) to foster academic activity.  No more than 20% of the base salary for a given academic year may be provided for faculty salary enhancement.  Externally funded projects can require faculty to expend effort above and beyond their research assignment.  Under this scenario, faculty may seek to modify their workload by requesting a course release from their Department Chair.

Frequently Asked Questions and Examples

(1) What is the definition of Eternal Funds?

External funding refers to contracts and grants awarded through, and formally accepted by West Virginia University, the WVU Research Corporation or the WVU Foundation, for research, instruction, training, or public service.  State general ledger funding strings will not be considered external funding – unless approved by HSC Finance.

(2) What is the difference between state general ledger funding and POETA funding?

A POETA is a funding string associated with a grant (sponsored project) processed through the Office of Sponsored Projects or Foundation funds.  A general ledger funding string is an account associated with state funds, which can include state appropriations, tuition & fees, sales or services income (including service agreements), or money from outside agencies.

• Example of a POETA:
  10006892.1.1001721AR.BE Faculty Tenured.Research Center
  Project.Task.Award.Expenditure Type.Expenditure Organization
• Example of a GL string: 11.123450001.12345678.5100000.210.999999999
  Campus.Department Activity.Fund. Line Item.Function. Project

(3) Is salary support through Cost Sharing on a grant or contract eligible to be part of the FIPP?

No, salary on cost share funding is not incentive eligible because it does not release state funds.  External funds that provide support for a portion of a faculty member’s SPH supported salary, not derived from HSC cost share accounts or central budget sources allocated to the SPH are eligible for the FIPP.

(4) What is considered the contractual base salary?

Contractual base salary is defined as the base salary amount paid from SPH funds stated in the letter of offer and includes any and all merit raises and equity adjustments.  Base salary does not include administrative stipends, supplemental payments, incentive payments, etc.

(5) How will salary release for late grant awards (for example, an award that is received after the start date of the project period) be handled?

A delay in grant funding may impact the availability of incentive pool funds.  In the case that an award is made in later reporting period than the effort was committed to the grant funded project, the SPH will make every effort to credit the faculty member for the effort in a later effort period.

(6) What is the difference between Departmental Effort and Grant Effort?

Grant effort is effort spent working on, and charged to, externally sponsored projects.  All faculty and staff with any grant effort certify their grant effort on semi-annual effort reports.

Departmental effort includes grant effort, effort dedicated to teaching, research, service and clinical activities.  Effort reporting in terms of the FIPP refers to grant effort.

(7) Are faculty salary lines fully funded by the SPH?

Not typically.  In the SPH pay for most 12-month faculty members are budgeted at 75% of the total annual contractual salary amount.  This is why 12-month faculty must first generate 25% of their contractual base salary before they are eligible for incentive pay.  Central fund dollars are not typically allocated to the first 25%, therefore funds recovered for that portion do not replace central funds.

(8) How are incentive payments handled if a faculty member dies or transfers to another institution or department outside of the School of Public Health?

The participant must remain on payroll to receive incentive payments.  Funds held in Incentive Holding accounts are non-transferable and will not be paid out in the event of participant resignation, termination or death.

(9) Why are 9-month faculty on a different incentive pay schedule than 12-month faculty?

The once per year incentive payment for 9-month faculty allows for maximum compensation under the current Faculty Incentive Pay Program.  9-month faculty members’ summer salary, which is not taxed by the school or the department, will take first consideration prior to incentives being calculated.  To capture full summer salary in the incentive calculation, the period of August 16^th through August 15^th will be used.  9-month faculty may opt-in to the twice a year incentive payment option by signing a waiver stating that they understand that any fluctuations in external funding from one period to the next will not be taken into account with incentive calculations.  Please refer to example below:

A faculty member with a 9-month contract has a base salary of $75,000.  The max summer salary allowable on this contract is $25,000.  This faculty member has opted in to the twice a year payment option.  During the first effort reporting period, the faculty member is 35% grant funded.

In the second effort reporting period, the faculty member’s funding level has dropped to 25%.

In this scenario, the faculty member has paid tax on incentive payment because they opted in to the twice a year plan.  With the standard once per year option, the faculty member would have received the full external funding as summer salary without any taxes being applied.

Examples of Incentive Pay Calculations

Example 1

A faculty member with a 12-month contract has a base salary of $100,000.

Per SPH policies and the individual’s appointment letter, they must first cover 25% of their base salary through externally funded sources before they become eligible for FIPP.

The faculty member is on an externally funded grant, committing 30% grant effort to the project and will receive $30,000 per year in salary support from the grant.  $25,000 of the released funding goes back to the SPH to cover 25% of the faculty member’s base salary.  $5,000 goes into the SPH incentive pool.  65% of the pooled funds ($3,250) is available to the participant as incentive (the remaining 35%/ $1,750 is split between the Dean (25%) and Chair (75%)).  The participant can receive the full $3,250 in salary enhancement, or can use the funds for other scholarly activity.

Example 2

A faculty member with a 12-month contract has a base salary of $100,000.

Per SPH policies and the individual’s appointment letter, they must first cover 25% of their base salary ($25,000) through externally funded sources before they become eligible for FIPP.

The faculty member is on an externally funded grant, committing 60% grant effort to the project and will receive $60,000 per year in salary support from the grant.  $25,000 of the released funding goes back to the SPH to cover 25% of the faculty member’s salary.  $35,000 goes into the SPH incentive pool. 65% of pooled funds ($22,750) is available to the participant as incentive (the remaining 35% / $12,250 is split between the Dean (25%) and Chair (75%)).  The participant can receive up to $20,000 in salary enhancement (20% of their base salary).  The remaining $2,750 can be used for other scholarly activity.

Example 3

A faculty member with a 9-month contract has a base salary of $75,000.

The faculty member is on an externally funded grant, committing 30% grant effort during the 9-month contract period to the project and will receive $22,500 per year in salary support from the grant.  All of the released salary ($22,500) will be used to pay the faculty member’s summer salary in a supplemental payment, determined by the faculty member and the SPH EBO. No funds go into the SPH incentive pool.

Example 4

A faculty member with a 9-month contract has a base salary of $75,000.

The faculty member is on an externally funded grant, committing 60% grant effort during the 9-month contract period of the project and will receive $45,000 per year in salary support from the grant.

$25,000 (25%) of the funding is paid directly to the faculty member to cover their summer salary.

$20,000 goes into the SPH incentive pool. 65% of those funds ($13,000) are available to the participant as incentive.  The remaining 35% ($7,000) is split between the Dean (25%) and Chair (75%).

Example 5

A faculty member with a 9-month contract has a base salary of $75,000.

The faculty member is on an externally funded grant, committing 30% grant effort during the 9-month contract period and one summer month to the project, which increases total% externally funded to 41%.  They will receive $22,500 per year in salary support from the grant from the 9-month contract period and $8,333 for one month of summer effort.  $25,000 goes towards the faculty member’s summer salary, $5,833 goes into the incentive pool. 65% of those funds ($3,791.45) are available to the participant as incentive.  The remaining 35% ($2,041.55) is split between the Dean (25%) and Chair (75%).  The participant can receive the full amount in salary enhancement because it is less than 20% of their base salary ($15,000).

Example 6

A faculty member with a 12-month contract has a base salary of $100,000. The faculty member has 3 funded grant awards.

• Award A has a committed effort of 15% for the period of 7/1/2015 through 6/30/2016
• Award B has a committed effort of 25% for the period of 9/1/2015 through 10/31/2016
• Award C has a committed effort of 10% for the period of 3/1/2016 through 12/31/2016

Faculty Incentive Pay is being calculated based on the first effort reporting period of the year: 1/1/2016 through 6/30/2016.  The following chart depicts the salary amount covered by each award per month in the effort reporting period:

Notice that the percent effort on Award C is slightly less than the committed effort for the total time period of the grant award.

The faculty member will receive $23,333.30 in this effort reporting period in salary support from the three grant awards (approximately 46.7% grant effort during the 6-month period).  $12,500 of the released funding goes back to the SPH to cover 25% of the faculty member’s salary.  $10,833.30 goes into the SPH incentive pool.  65% of the pooled funds ($7,041.64) is available to the participant as incentive and will be paid out or transferred in September.  The remaining 35% ($3,791.65) is split between the Dean (25%) and the Chair (75%).  The participant can receive the full $7,041.64 in salary enhancement or may choose to use the funds for other scholarly activity.

Last reviewed/revised: 10/31/2023

Return to Finance SOGs