Calculate the 3% merit budget (merit pool is determined by computing 3% of the total salary of your team). (5 Points)
Determine how best to distribute the merit pool based on the principle of “pay for performance”. Merit increases should be expressed both in dollars and as a percent of the employee’s current base pay. (40 Points)
NOTE: You should base your pay decisions on employee merit.
Compute the new salary (merit increase + current salary). Show the percent given & new Salary (10 Points)
Compute the participation rate for the department (# of employees receiving merit increases divided by the total # of employees in the department). This value represents the % of employee in the department receiving an increase. Too high a percent infers that there is little performance/reward differentiation; too low a percent infers possibly an unrealistic performance/reward threshold. Both ends of the participation rate continuum could affect morale, performance, and result in turnover. (5 Points)
Prepare a statement for each of the 12 employees that affirms your decision to make the performance/award decision. This is a statement you would address to the employee during the meeting to discuss their new salary/wage. Your message must reference data from the performance evaluation. (40 Points)
Sample Solution