← HR Metrics·Compensation & Benefits
Merit Spend % of Payroll
Merit spend as a percentage of the payroll base for a segment.
How it’s computed
merit_spend / payroll_base * 100
What the evidence shows
Evidence (effect sizes, priors, validity) is syncing from Principia.
Run it on your data
This metric is computed in the People Analytics Toolbox on your own numbers. See pricing — posted, no quotes.
sources: toolbox:metrics-catalog
What the literature says
The measurement literature behind this signal — sourced, so you can defend it.
“DETERMINING BUDGET ALLOCATIONThe next step in the budget process is to determine how funds are to be distributed to business units within the organization. A simple and commonly used method of allocating merit pay dollars is to use a uniform budget. Under this procedure, merit…”
— Worldatwork Handbook Compensationmatch 59%
“Compensation is measured by the quoted market price of the stock at the measurement date less the amount, if any, to be paid by the employee.[C6, C6A, T11]MedianThe middle item in a set of ranked data points containing an odd number of items. When an even number of items are…”
— Worldatwork Handbook Compensationmatch 59%
“14 Linking Pay to PerformanceMerit pay, commonly called “pay for performance,” is perhaps the most widely used means by which U.S. organizations determine employee pay increases. The purpose of merit pay is to reward employees for individual contributions and to encourage the…”
— Worldatwork Handbook Compensationmatch 57%
Resources: Worldatwork Handbook Compensation