Salary Matrices are one means by which pay-for-performance may be achieved in the program.
Salary Matrices are maintained on the Define Salary Matrices (ISMX) form. In this form, you create guidelines to control how employees’ wages should be increased, based on a combination of their current level of pay and reviewed performance.
Employees’ current salaries are compared with others in their range by means of “Compa-Ratios”. Employees with a compa-ratio of 1.0 are making the average salary for their range; compa-ratios of less than 1.0 show an employee under the average, etc. If there is an excellent employee who is well under the average compa-ratio, the employer may wish to reward that employee at a greater rate than an employee who is above the average compa-ratio and yet performs at less than peak level. This control is achieved through the use of recommended percent increases for each combination of performance and current salary (compa-ratio) – and these recommended increases are defined on this form.
To allow flexibility for managers, while maintaining control over wage increases, you not only specify the recommended percent increase, but may also specify a wider range of acceptable percent increases. These are shown as the minimum and maximum percentages for each level of performance/current earnings. As well, to control the maximum wage that an employee may earn within a job/range (regardless of how long in the position, or performance), you may specify the maximum compa-ratio that is allowed for each performance level.
