{"product_id":"merit-increase-matrix","title":"Merit Increase Matrix","description":"\u003cp\u003eRun a merit cycle on performance and where each person sits in their range, not a flat percent. Set your matrix, enter your people, and the workbook returns each raise, the cost, and a check against your budget.\u003c\/p\u003e\u003ch3\u003eOne Excel workbook that turns ratings and range position into a defensible merit cycle\u003c\/h3\u003e\u003cp\u003eA working model, not a blank grid. You set the matrix once and enter your people, the workbook returns each increase and the cost, and it opens on a worked example so the logic is clear before you change anything.\u003c\/p\u003e\u003cul\u003e\n\u003cli\u003e\n\u003cstrong\u003eMerit Increase Matrix.\u003c\/strong\u003e Set the range-position cut points and the increase percent for each performance rating and band on the matrix tab, then enter each person with their rating, current salary, and range minimum and maximum on the planning tab. The workbook returns where they sit in range, the merit increase that applies, the dollar increase, and the new salary, with the cycle rolled up to a total cost and a blended increase.\u003c\/li\u003e\n\u003cli\u003e\n\u003cstrong\u003eA budget check, a board-ready summary, sourced benchmarks, and the method in plain English.\u003c\/strong\u003e A budget tab compares the plan to an approved merit budget and returns the headroom, the blended increase against target, and a scale factor to bring the cycle in line. A one-page Summary carries the cost and the new payroll, a Benchmark tab holds current merit and total salary increase budgets from the major surveys, and the Notes tab documents how each number is built.\u003c\/li\u003e\n\u003c\/ul\u003e\u003ch3\u003eThree steps from ratings to a merit cycle you can defend\u003c\/h3\u003e\u003cp\u003eYou set the matrix, enter your people, and check the cost against your budget. The workbook does the rest.\u003c\/p\u003e\u003cul\u003e\n\u003cli\u003e\n\u003cstrong\u003eSet your matrix.\u003c\/strong\u003e Fill the amber cells on the Merit Matrix tab: the range-position cut points that split a salary range into four bands, and the increase percent for each performance rating in each band. The worked example runs from 5 percent for a top performer low in range down to zero, taper it to your own policy.\u003c\/li\u003e\n\u003cli\u003e\n\u003cstrong\u003eEnter your people.\u003c\/strong\u003e On the Merit Planning tab, enter each person’s rating, current salary, and range minimum and maximum. The workbook returns where they sit in range, the matrix increase that applies, the dollar increase, and the new salary, and a row with a blank name is ignored, so you can run five people or a hundred.\u003c\/li\u003e\n\u003cli\u003e\n\u003cstrong\u003eCheck it against the budget.\u003c\/strong\u003e The Budget Scenario tab sets your approved merit budget as a percent of payroll and compares the plan to it: the headroom or overage, the blended increase against target, and a scale factor you can apply to every cell to bring the cycle inside the budget. The Summary rolls up the cost and the new payroll for a leadership conversation.\u003c\/li\u003e\n\u003c\/ul\u003e\u003ch3\u003eA flat percent rewards last year’s salary, not this year’s performance\u003c\/h3\u003e\u003cp\u003eTwo shortcuts get merit wrong. The first gives everyone the same percent, which hands the largest dollars to whoever already earns the most and ignores how they performed. The second leans on manager gut, which drifts toward the middle and skews by group. A two-axis matrix sizes each raise on performance and on where the person sits in their range.\u003c\/p\u003e\u003cul\u003e\n\u003cli\u003e\n\u003cstrong\u003ePerformance is half the decision; range position is the other half.\u003c\/strong\u003e The same rating earns a larger raise low in the range and a smaller one near the top, so strong performers who are underpaid catch up and people already high in their range do not run past it. In the worked example an Exceeds rating earns 5 percent at the bottom of the range and 3 percent near the top.\u003c\/li\u003e\n\u003cli\u003e\n\u003cstrong\u003eMerit is not cost-of-living, market, or promotion.\u003c\/strong\u003e A merit raise rewards individual performance; a cost-of-living raise keeps pace with inflation for everyone; a market or structure adjustment realigns pay to current rates; a promotion funds a move to a higher level. They come from separate budgets, so keeping merit about performance and range position keeps the conversation clean.\u003c\/li\u003e\n\u003cli\u003e\n\u003cstrong\u003eAudit the cycle before you finalize.\u003c\/strong\u003e Check that managers used the full matrix rather than defaulting everyone to the middle, that average increases do not skew by group, and that low-in-range strong performers did move up. Run a pay-equity review on the result, since a merit cycle can widen a gap as easily as close it.\u003c\/li\u003e\n\u003c\/ul\u003e\u003ch3\u003eWho this matrix fits and where to go if that is not you\u003c\/h3\u003e\u003cp\u003e\u003cstrong\u003eBuilt for\u003c\/strong\u003e\u003c\/p\u003e\u003cul\u003e\n\u003cli\u003eAn HR or compensation leader running a merit cycle who wants a defensible matrix, performance against range position, in place of a flat percent or manager discretion.\u003c\/li\u003e\n\u003cli\u003eA finance or compensation partner who needs the cycle costed against an approved budget, with the headroom, the blended increase, and a scale factor to bring it in line.\u003c\/li\u003e\n\u003cli\u003eAn owner or manager setting raises across a small team who wants consistency and a number they can explain to each person.\u003c\/li\u003e\n\u003c\/ul\u003e\u003cp\u003e\u003cstrong\u003eIf you are looking for\u003c\/strong\u003e\u003c\/p\u003e\u003cul\u003e\n\u003cli\u003eBuilding the salary ranges themselves, the minimum, midpoint, and maximum. The Salary Band Builder builds those.\u003c\/li\u003e\n\u003cli\u003eRunning a pay-equity or pay-structure review. The Pay Structure and Internal Equity Review does that.\u003c\/li\u003e\n\u003cli\u003eSizing the promotion budget, which is funded outside merit. The Promotion and Internal Equity tool covers it.\u003c\/li\u003e\n\u003c\/ul\u003e\u003ch3\u003eBefore you buy\u003c\/h3\u003e\u003cp\u003e\u003cstrong\u003eWhat format is it and can I edit it?\u003c\/strong\u003e\u003c\/p\u003e\u003cp\u003eIt is one Excel workbook that also works in Google Sheets. Every input and formula is editable, and the file is yours to keep. Add people by inserting rows inside the planning table, change the matrix to your own policy, and duplicate the file to run a second group or to rerun the cycle next year.\u003c\/p\u003e\u003cp\u003e\u003cstrong\u003eHow accurate is the result?\u003c\/strong\u003e\u003c\/p\u003e\u003cp\u003eIt is a planning estimate, and the matrix and ranges you enter drive it. Position is range penetration, the salary measured across the whole range from the minimum to the maximum, so each increase rests on the cut points and the percents you set. Every figure foots to your inputs, percents round to one decimal and dollars to whole numbers, and the Budget Scenario tab shows whether the plan lands inside your approved budget. The math is correct for the numbers you give it.\u003c\/p\u003e\u003cp\u003e\u003cstrong\u003eWhat is the difference between a merit increase and a cost-of-living or market raise?\u003c\/strong\u003e\u003c\/p\u003e\u003cp\u003eA merit increase rewards individual performance and is what this matrix allocates. A cost-of-living adjustment is given across the board to keep pace with inflation, a market or structure adjustment realigns pay or ranges to current rates, and a promotional increase funds a move to a higher level. These usually come from separate budgets and decisions. Keep them apart so the merit conversation stays about performance and range position, and use the Budget Scenario tab to hold the merit spend to its own number.\u003c\/p\u003e\u003cp\u003e\u003cstrong\u003eWhat is the refund policy?\u003c\/strong\u003e\u003c\/p\u003e\u003cp\u003eDigital products are covered by a 14-day money-back guarantee. See the refund policy for the full terms.\u003c\/p\u003e\u003cp\u003e\u003cstrong\u003eWhat happens after I buy?\u003c\/strong\u003e\u003c\/p\u003e\u003cp\u003eCheckout delivers an instant download link, and a receipt with the same link arrives by email. Open the workbook in Excel or Google Sheets, set your matrix, and enter your people. If a file gives you trouble, email support@truestephr.com.\u003c\/p\u003e\u003cp\u003ePlanning estimates and general business information, not legal or tax advice. It allocates a merit budget by performance and range position; confirm pay decisions against the equity and pay rules that apply to you, and run a pay-equity review on the result before you finalize it. Last reviewed June 2026.\u003c\/p\u003e","brand":"TrueStep HR","offers":[{"title":"Default Title","offer_id":52641503052052,"sku":"TSHR-019","price":29.0,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1013\/9048\/3732\/files\/TSHR-019__merit-increase-matrix-hero.jpg?v=1780979021","url":"https:\/\/shop.truestephr.com\/products\/merit-increase-matrix","provider":"TrueStep HR","version":"1.0","type":"link"}