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DETERMINE AN APPROPRIATE SALARY STRUCTURE.

• Determine the difference between each salary step.


• Determine a minimum and a maximum percent spread.
• Slot the remaining jobs.
• Review job descriptions.
• Verify the purpose, necessity, or other reasons for maintaining a
position.
• Meet with the compensation committee for review, adjustments,
and approval.

A salary increase matrix is a two dimensional matrix comprised of


performance levels (e.g., meets expectations, exceeds expectations,
etc.) on one axis and position in salary range (e.g., lower third, middle
third, upper third) on the second axis, with targeted salary increases in
the grid. High performers paid low in range should receive the largest
salary increases, while lower level performers already paid at or above
midpoint should receive smaller or no increases.

SALARY INCREASE PLANNING MATRIX

Salary increases should be guided by position in range of the current


salary (adjusted for number of hours actually worked) and
performance. Use the following matrix to guide you as you consider
pay increases for your employees. To begin, write the names of your
employees into the areas on the matrix indicated by the position of
their current salary in the range and by their performance.

Position of Salary in Pay Range


(Compa-Ratio)
Lower Third Middle Third Upper Third
Support Staff 80-93% of market 94-107% of market 108-120% of
value value market value
Professional Staff 73-91% of market 92-110% of market 111-127% of
value value market value
Salaries in this area
Salaries in this
of the matrix are at
area of the matrix
Upper a premium. A
would usually
Third moderate increase
experience the
would usually be
largest increases.
indicated.

Middle
Salaries in this area
Third of the matrix are
Performance probably about
Level This is the level right, usually
of performance indicating a median
most frequently increase.
attained.

Inexperienced
performers or new
in current position:
median or above Salaries in this area
Lower increase of the matrix would
Thir
usually receive little
d
Experienced or no increase.
performers: below
median or no
increase.

A salary matrix allows two variables to be taken into account in deciding the level of an award: the
individual's performance rating and the position already attained within the salary range. An individual with
a ‘fully acceptable’ performance rating, for example, could receive a 5 per cent increase when at the bottom
of the range, a 3 per cent increase at the midpoint, and 1 per cent above the mid-point. The same level of
performance rating, therefore, results in different levels of salary award, depending on existing salary.

A chart that can be used to determine the annual salary award and rate of salary progression of an
individual employee.