CompLogix Blog

Automating Merit Pay Allocation

Recommending year over year merit increases is a process that can last from a few weeks all the way up to a couple of months.  There are many ways to administer merit increases, some organizations utilize spreadsheets and others use online compensation management software.  For smaller organizations spreadsheets typically suffice, however larger organizations usually need an automated process.  For a large organization, sending around individual spreadsheets for each manager can cause significant errors as well as take a lot of time.

Compensation management software has been around for a while, but the ease of delivery via Software as a Service has led to increased use for larger organizations.

Here is a brief overview of how compensation management software is designed and delivered:

  1. The target population of eligible employees is identified by extracting information from employee database based on a certain criteria
  2. Pertinent information regarding each eligible employee is extracted and shown on the worksheet
  3. Departments calculate merit budget and indicate the effect on budget by each merit pay increase by expressing old and new salaries as percentages of range midpoint
  4. Information is collected regarding each employee’s performance highlights, goals, and achievements during a merit cycle
  5. The system automatically calculates new annual salary using the amount of increase,  preventing calculation errors
  6. The system makes it easy to adjust merit pay budgets and automatically calculates budget when an employee is removed from the list.
  7. After administration the system can create dynamic reports


Feel free to contact us for additional information on automating merit pay administration.

See for Yourself

Ready to learn how CompLogix software suite can help you to work smarter?