Compensation - Annual Increase Merit Matrix Template

Description
The Merit Matrix Template tool is an Excel-based macro-enabled application designed to streamline the process of annual merit increase budget allocation. By utilizing compa ratios (position in pay ranges), and performance ratings, the tool assists reward teams in determining the optimal distribution of merit increases across all eligible employees using a pay-for-performance approach.

Reward teams are able to quickly determine the relevant increases to provide an employee based on the position of their pay against the company pay ranges, as well as ensuring that a pay-for-performance methodology is adhered to, where high performers who are paid lower in their pay ranges receive a higher percentage increase. Users can also determine what increases, if any, poor performers should receive in line with their company strategy.

This workbook is designed to be as easy to use as possible with everything calculated based on a few criteria/inputs from users. Users are shown which cells they are able to edit and what information is required to run the merit matrix.  The workbook is macro-enabled using buttons to calculate the distribution of the budget by either % of payroll or budget value.  No currency is specified, only values, to make the approach country-agnostic.

This comprehensive approach ensures that the budget is optimally and equitably allocated and in alignment with a company's reward strategy and pay increase budget, making it an invaluable tool for budgeting and compensation management.