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Compensation Advisory Studio

Budget Allocation & Guidance Engine

Allocate merit budget by performance and compa-ratio with governance controls and manager guidance to drive fair, competitive outcomes.

What This Analysis Does

Builds a defensible merit matrix that allocates budget by performance and compa-ratio with documented guidance and governance rules.

Required Data
  • Approved philosophy & total budget
  • Performance distribution, current compa-ratio distribution
  • Org structure, salary data
Key Outputs
  • Merit matrix % by performance × compa-ratio
  • Segment budget allocation, manager guidance memo
  • Calibration readiness signals
Next Recommended Action

Evaluate matrix results, review advisor insights, and prepare for calibration meetings in Governance.

Total Merit Budget
$2.82M
Approved budget
Blended % of Base
5.6%
Weighted average merit spend
Headcount
454
Employees in scope
Highest Segment %
4.5%
Technical talent
Merit Matrix Studio
Merit % by Performance Rating × Compa-Ratio Band
Performance Rating<0.800.80-0.940.95-1.04
on target		1.05-1.15>1.16
Exceeds
7.0%
6.5%
5.5%
4.0%
2.5%
Meets+
5.0%
4.5%
4.0%
3.0%
1.5%
Meets
3.5%
3.0%
2.5%
1.5%
0%
Below
0%
0%
0%
0%
0%
Progressive in Performance
Higher performers receive higher merit % across all compa-ratio bands, reinforcing performance excellence.
Regressive in Compa-Ratio
Merit % declines as employees move above target compa-ratio, helping control spend while staying market competitive.
Governance Controls
Matrix locked at calibration step. Changes require Compensation Committee approval.
Segment Budget Allocation
Illustrative allocation of the total merit budget by segment share
Segment% of Base$ Amount% of HC
Broad-based Corporate
55% of headcount · 4.0%
4.0%$650K55%
Technical Talent
27% of headcount · 4.5%
4.5%$595K27%PREMIUM
Sales (non-plan)
14% of headcount · 4.0%
4.0%$1410K14%
Frontline
4% of headcount · 3.5%
3.5%$165K4%
TOTAL / BLENDED5.6%$2.82M100%

454 employees in scope · Segment shares are an illustrative allocation of the $2.82M budget.

Manager Guidance Highlights
Focus on Performance

Prioritize performance when making merit decisions — use the matrix as your guide.

Evaluate Total Contribution

Consider results, behaviors, and impact — not just compa-ratio.

Use the Full Range

Spread merit across the team based on differences in performance.

Document Your Rationale

Capture key reasons for outliers and non-standard allocations.

Stay Within Guardrails

Follow the matrix and segment budgets unless an exception is approved.

AI Advisor
BETA

Your AI copilot for merit planning. Insights, guardrails, and guidance based on your data.

Calibration Readiness

Sequence calibration meetings 2-3 weeks before merit letter generation to lock the matrix.

Rating Distribution Check

Exceeds at 12% is within policy (10-20%) but above prior year (9%). Monitor for rater consistency.

Committee Will Want to See
  • Matrix rationale & philosophy
  • Compa-ratio control effectiveness
  • Talent impact & retention risk
  • Affordability vs cost scenarios
Suggested Next Module
Governance

Prepare for calibration sessions, lock the matrix, and capture exceptions with audit trail.

Go to Governance
Downloads

Download key outputs

  • Merit Matrix & Guidance MemoPDF
  • Segment Allocation SummaryXLSX
Data as of April 18, 2025