Create a Compensation Cycle: Budget

The Budget page of a compensation cycle setup allows admins to set a budget and calculate the projected spend for the compensation cycle.

Budget

This budget guidance will help support recommenders in making compensation decisions. The following can be completed when setting a budget:

• Set the budget: There are two ways to enter an overall budget for merit raise increases and promotions. This will become your “top-down” budget to track total spend against
  • Increase/employee: Input the average percent (%) increase for each employee. This is calculated based on the total current pay (base pay + variable pay if applicable) for all eligible employees in the cycle.
  • Raise budget: Input the total budget as a lump sum amount. The average percent increase per eligible employee will automatically be calculated for you. 
• Promotion raise guidance: Provide recommenders with a raise guidance for promoted employees. This section will only appear if promotions are added to the Participants page.
  • If all promoted employees are assigned to a compensation band at promotion, you can provide promotion raise guidance based on target band attainment % or % increase to total pay.
    • Target band attainment: Calculates promotion raise guidance based on placement in the employee’s new compensation band. For example, if this is set to 50%, the employee will be placed at the halfway point of their new compensation band.
    • Increase %: Calculates promotion raise guidance based on a percent increase to the employee’s current total on-target earnings (base pay + variable pay if applicable). For example, if an employee’s total on-target earnings is $80,000, a 10% increase would equal a $8,000 raise.
  • If any promoted employees are not assigned to a compensation band at promotion, you can still provide promotion raise guidance based on Increase %.
• Merit raise guidance: Provide recommenders with raise guidance for eligible employees who are not receiving promotions.
  • If a performance review rating question was linked to this compensation cycle on the Rules and Ratings page, you can provide increase % guidance based on each rating. 
  • If no performance review rating question was linked to this compensation cycle, you can provide a flat increase % guidance for all employees.

Multiple currencies

If the cycle includes an employee population that is compensated in different currencies, there will be a banner listing all of the currencies included in the cycle along with the conversion rates that were set on the Currency page. 

All budgeting for the cycle is done in the company currency, which is defaulted to the currency with the greatest number of employees. To edit the company currency, visit the Currency page in cycle setup.  

Projected distribution chart

The projected distribution chart shows the budget breakdown by the three existing categories: promotion guidance, raise guidance, and remaining budget.

If promotion and merit raise guidance exceeds the total budget, you will receive an exceeding budget error and be requested to adjust the budget or raise guidance before proceeding to the next step of cycle setup.

Bulk update raise guidance

Admins can bulk update the raise guidance by uploading a CSV. 

To upload a CSV:

1. Select Upload guidance.
2. Download the Raise Guidance CSV template.
3. Update the Raise Guidance column with your own values.
   • Raise guidance should be expressed as a monetary value rather than as a percentage. For example, if an employee currently earning $100,000 will be receiving a 5% raise, enter 5000 into the Raise Guidance column.
4. Upload the updated CSV.
5. Select Save.