Several factors go into Kamsa’s calculated salary budget, including the employees’ country, performance rating, compa-ratio, eligibility, as well as who’s getting promoted.
This video will show you how Kamsa can help quickly calculate the budget you’ll need for your compensation review (including merit and promotion increase guidelines), and then compare it to your company’s actual budget to make tweaks to the calculated budget, as needed.
Go to Comp Review Planning and click on View Details to view the salary review budget.
The calculated salary budget that appears is the sum of the merit, promotions, and any market-based adjustments you’ll establish.
Calculated Budget
Merit Increase Guidelines
0:40 The Merit Increase budget is the sum of the guidelines broken down by country and calculated by each employee’s market pay position and performance rating. Factoring in performance rating is optional. Should you choose to factor performance ratings into your increase guidelines, you’ll need to upload performance ratings.
When you start a Comp Review plan, Kamsa will display merit increase guidelines for every country you have employees in (for example, it aligns with the Country column within the Employee Data page).
If you’ve uploaded a Performance Rating file, Kamsa will calculate the merit increase amount according to the % entered in the guideline table, aligned to the employee’s respective performance rating.
For example, suppose an employee in the United States has an average performance rating and a compa-ratio between 85% and 115%, which is considered within the competitive range. In that case, Kamsa will recommend a merit increase of 3% for this employee.
If you choose not to factor in performance ratings, Kamsa will use the increase guidelines you establish based on just market pay position (for example, based on employees’ compa-ratio only).
To make changes to the merit increase guidelines, click edit. As you edit the default guidelines, Kamsa will recalculate the budget accordingly.
Market Adjustments
2:00 If you’d like to include an additional budget to get employees that are currently considered below market (for example, get employees who are below 85% base salary compa-ratio up to at least 85% compa-ratio), toggle the market adjustment button to the right, then enter a max increase % amount.
For example, in this case, we are saying get anyone who is below 85% in base salary compa-ratio to at least 85% compa-ratio but, cap it at 10% of their salary.
Kamsa will then calculate how much is needed to bring up these employees’ compa-ratios and factor it into the budget.
You’ll need to set those Market Adjustment percentages for each country that you have employees in.
Promotion Increase
2:47 You have the option (and we recommend if at all possible), to upload any known promotions via the promotions files, so that you can factor in the cost of these promotions more accurately into your budget.
If you don’t know who will be promoted yet, then you can choose to establish an additional budget for promotions using a % of payroll.
If you choose not to upload known promotions, then each compensation reviewer will be allocated additional promotions budget as a % of payroll. You’ll enter this % of payroll amount within the increase guidelines matrix for each country.
If you choose to upload a promotion file, Kamsa will instead calculate the promotion increase as a % of the base salary for each of the employees you uploaded and incorporate that into the overall comp review budget, allowing you to better ensure you have enough in the budget for promotions.
The % of salary that we recommend for promotions by country is available by default within Kamsa; however, you can click edit, and update this % increase guideline for promotions by country.
Each compensation reviewer’s allocated budget will factor in these guidelines, and the budget at the top will calculate, dynamically as you make any edits.
Actual Budget
4:00 If your company has a budget you’re aiming to stay within; you can enter the amount in the Actual Budget field.
Once an actual budget is entered, Kamsa will display the variance between your actual vs. the calculated budget (for example, based on the guidelines you’ve entered).
If the actual budget is less than the calculated budget, click edit to make changes to the increase guidelines, and Kamsa will update the budget in real-time.
Once you determine who the compensation reviewers are in the Comp Review Flow, you’ll be able to review the budget summary to see how the budget is allocated to each compensation reviewer.