Compensation Recommendation Matrix

A recommendation matrix enables administrators to determine recommended payouts for the adjustment component based on selected metrics. The administrator can configure the matrix as necessary.

Complete the following fields:

  • Matrix Rating out of: - Select the appropriate rating range. For example, if you are planning to use performance review scores as your matrix, and your rating scale is 1 to 5, select 5 in this box.
  • Add Metric - Click this option to select a matrix on which to base this employee recommendation. Tip: The most commonly used metrics are Last Competency Avg. Score and Last Performance Review Avg. Score. For example, if you select Last Performance Review Avg. Score, the matrix rating will be based on the most recent performance review completed for this employee. The matrix use percentiles to determine where an employee belongs in the matrix row. If the matrix is out of five, and you are using the Last Performance Review Avg. Score metric, employees whose last performance review score is 3.6 out of 5 would correspond to the 72 percentile, which places them in the 5th row.
  • Define Columns - Select the appropriate column. Employees can be placed into columns based on where they fall in their salary range. For example, if you create two columns and the salary range in column one is $50,000.00 to $60,000 and column two is $60,001.00 to $70,000.00, and your employee earns $65,000.00, the appropriate column is column two.

Note: When creating an Adjustment Guideline, the Recommendation Matrix options are only available when the adjustment Type is set to Recommendation Matrix in the Details section.

To create a new adjustment guideline, go to Admin > Tools > Compensation Management > Adjustment Guidelines. Then, click the Create New Adjustment Guideline link. See Adjustment Guidelines - Overview.

PERMISSION NAME PERMISSION DESCRIPTION CATEGORY
Compensation Adjustment Guidelines - Manage Grants ability to define and maintain compensation recommendations and guidelines for both salary and hourly employees. This permission can be constrained by User. This is an administrator permission. Compensation - Administration

Configure Matrix

Enter the following information to configure the recommendation matrix:

  • Matrix Rating out of - Define the number of rating scale levels for the matrix. This can be a value from 1-10. Note: Changing these values after the matrix is created and re-creating the matrix eliminates any values you may have entered into the matrix.
  • Total Columns - Define the number of columns to include in the matrix.
    • Base Types - This can be a value from 1-5. Note: Changing these values after the matrix is created and re-creating the matrix eliminates any values you may have entered into the matrix. Also, the metric that is used for column values is displayed below this field.
    • Bonus/Equity Types - The total number of columns is set at 1 and cannot be changed. Note: The metric that is used for column values is displayed below this field.
  • Add Metric - Click this link to add a performance or succession metric to the recommendation matrix. The selected metrics determine how the recommendation for merit increase is calculated. The available metrics are Last Competency Avg. Score, Last Performance Review Avg. Score, Goal Achievement %, past performance reviews and competency assessments, numeric user custom fields, and any SMP rating scale metric.
    • Scale - For numeric user custom fields, enter the top rating scale value. For all other metric types, this value automatically populates with the read-only scale value.
      • The value displays as N/A for metrics that are not tied to a specific task (e.g., Last Performance Review Average Score, Last Competency Average Score).
      • The value displays as N/A for metrics that are tied to a specific competency assessment task that has the Include all competency models with the selected availability option set, as rating scales vary by competency models and users may have different rating scales defined for the competency task.
      • The value displays as 100 for goal metrics.
    • Weights - Enter a weight to specify how much each metric impacts the score. The sum of all weights must total 100%.
    • See Performance Review Section Score Metrics.
  • Metric - This displays the metric that is used for the column values in the matrix.
    • Base Types - This is Compa Ratio, which is the employee's position in their salary range. Note: Changing the below options after the matrix is created and re-creating the matrix eliminates any values you may have entered into the matrix.
      • Include Below Salary Range column - Select this option to include a column for values below the salary range. This is used if employees may be below the salary range for their position. When selected, this column appears in the matrix.
      • Include Above Salary Range column - Select this option to include a column for values above the salary range. This is used if employees may be above the salary range for their position. When selected, this column appears in the matrix.
    • Bonus Types - This is % of Target Bonus, which is the percentage of the employee's target bonus.
    • Equity Types - This is % of Base, which is the percentage of the employee's base pay.

Create Matrix

Click the Create Matrix link to create the recommendation matrix as configured. Administrators can then set percentages for each row and column combination in the matrix.

In the matrix, enter a recommended minimum and maximum percentage range for each row and column combination on the matrix.

  • Base Types - Based on the employee's metric rating and compa-ratio, the guideline will provide the recommended base increase for the employee in the compensation plan.
  • Bonus Types - Based on the employee's metric rating and % of Base, the guideline will provide the recommended bonus for the employee in the compensation plan.
  • Equity Types - Based on the employee's metric rating and % of Base, the guideline will provide the recommended equity increase for the employee in the compensation plan.

One to three decimals may be entered, depending on the decimal precision. The decimal precision for percentages in compensation is controlled by a backend setting.