Purpose

Organizations use the merit matrix to differentiate salary increases by considering employees’ performance and pay positions. For example, high-performing employees whose pay is in their pay scale's entry-level (or lower) region would receive a more significant allocation than those with regular performance whose pay level is at the high end of the range.

How to use this tool

The merit matrix is designed to support decision-making; however, there may be instances where a department may have many high performers, and strictly following the merit matrix recommendations could lead to overspending. Therefore, managers must be accountable for proper planning and ensuring they do not exceed the approved allocation for the fiscal year.