Merit cycles

A merit cycle is a pay review round. HR sets it up, managers plan rises for their team, HR approves them, and the approved rises take effect on one date.

1. Set up the cycle (HR)

Under HCM → Compensation → Merit cycles, select New cycle and enter:

• the effective date when rises take effect, and the due date for managers
• the merit budget as a percentage of the current pay bill, and an optional bonus pot
• a performance cycle to take ratings from (optional)
• who is included: departments, branches or named people, people to leave out, and an optional hired before date
• the guideline matrix (see below)

Before launch the cycle page shows exactly who will be included. People who are leaving, or have no pay recorded, are left out, with the reason.

The guideline matrix

For each performance rating (1–5, or not rated) and each place in the band (low, around the midpoint, high, or no band), the matrix gives a range of rises. The suggested rise is the middle of that range. For example, by default a rating of 5 low in the band gets 6–9%, while a rating of 5 high in the band gets 2–4%. You can change every range.

2. Launch

Launch gives each person to their manager to plan (through the manager's Plenix login; if they have none, to the HR person who launched it). Who is in the cycle is then fixed. HR can move people to another manager while the cycle is open.

3. Managers plan

Managers see the cycle on their Overview and under Merit cycles. For each person they can:

• enter the rise as a percentage or as the new pay
• add a bonus, if the cycle has a bonus pot
• mark a promotion, with a new band and job title
• add a note, which is needed when the rise is outside the guideline and HR requires it

The budget bars show how much of the merit budget and bonus pot is left. When they are done, managers submit some or all of their people to HR. Managers who still have people to plan get a reminder in the three days before the due date; HR can also send one with Remind managers.

4. HR reviews

HR sees progress by manager and the average rise by rating. Select rows to approve, send back with a note saying what to change, or undo a decision. HR can change any row. Close planning stops managers making changes; Reopen planning lets them carry on.

5. Apply

Apply creates a pay change for every approved row, dated the effective date, moves promoted people to their new band and title, and records each bonus. Changes dated today or earlier take effect straight away. Rows that were not approved are not changed. Cancel cycle closes it without changing anyone's pay.