Merit increase matrix builder
Enter your merit budget, how your employees are spread across performance levels and positions in their pay range, and how much more each level or position should earn. You get a matrix of increase percentages that spends exactly that budget, then a quick check for any one employee. Free, no signup, and nothing leaves your browser.
Every starting number below is an example you should change. They are not market data or a recommendation. Use the matrix as a starting design, then test it against your real employees before you communicate anything.
1. Merit budget
2. Performance levels
What share of employees falls at each level, and how much of the base increase each level earns (1.0 = the base, 0 = no increase).
| Level | % of employees | Multiplier |
|---|---|---|
| 1 - Does not meet | ||
| 2 - Partially meets | ||
| 3 - Meets | ||
| 4 - Exceeds | ||
| 5 - Outstanding | ||
| Total | 100% |
3. Position in pay range
Quartile of the range an employee's salary sits in. Lower positions usually get a higher multiplier so pay moves toward the midpoint.
| Position | % of employees | Multiplier |
|---|---|---|
| Q1 (bottom quartile) | ||
| Q2 | ||
| Q3 | ||
| Q4 (top quartile) | ||
| Total | 100% |
Your matrix
| Performance | Q1 (bottom quartile) | Q2 | Q3 | Q4 (top quartile) |
|---|---|---|---|---|
| 1 - Does not meet | 0.0% | 0.0% | 0.0% | 0.0% |
| 2 - Partially meets | 2.1% | 1.9% | 1.5% | 1.3% |
| 3 - Meets | 4.3% | 3.8% | 3.1% | 2.6% |
| 4 - Exceeds | 6.4% | 5.6% | 4.6% | 3.8% |
| 5 - Outstanding | 8.5% | 7.5% | 6.1% | 5.1% |
Base increase 3.4%. With these mixes the rounded matrix averages 3.51% against a budget of 3.5% (rounding difference +0.01 points). This holds only if your real employees match the mixes above.
Check one employee
Enter a salary and the range for the job to see the increase this matrix gives.
How the matrix works
The formula. Each cell is a base increase times the performance multiplier times the position multiplier. The base is solved so that the average increase, weighted by the mixes you entered, equals the budget.
Why position in range matters. Giving people lower in their range a larger increase moves them toward the midpoint over time, while people near the top get less so they don't pass the maximum. Position is measured as how far through the range the salary sits: (salary − minimum) ÷ (maximum − minimum), split into quartiles.
What it assumes. Performance and position are treated as unrelated, which is rarely true: in practice top performers often sit higher in range. If your real mix differs, the actual spend will differ from the budget. Cells are rounded to 0.1%, and the page shows how far rounding moves the average. Check the real total with your employee data before finalizing.
Not covered. Promotions, market adjustments, lump-sum payments, minimum-wage or pay-equity adjustments, and any legal or contractual commitments. Pay decisions should also be reviewed for equity.
Building the pay structure too?
Set the range itself from market data, or check whether a role is exempt before you set its pay.