Human resources (Exercise on salary planning) Exercise on salary planning SPRING 2017

Human resources (Exercise on salary planning)

Exercise on salary planning SPRING 2017
You are invited to make a simulation of an appropriate salary grid for a group of 100 employees with a salary mass of $ 3’600’000.The original merit budget that was included in the salary increase programme for next year is 5% of the overall salary mass of your group.
Original salary increase guidelines are as follows:
=85 85.1-91 91.1-97 97.1-103 103.1-109 109.1-115 =115
13.0* 12.0-11.0 11.0-10.0 9.0-8.0 7.0-6.0 5.5-4.5 0** F
11.0* 10.0-9 9.0-8.0 7.0-6.0 5.5-4.5 4.0-3.0 0** E
10.0* 9.0-8.0 7.0-6.0 5.5-4.5 4.0-3.0 2.0-1.0 0** M
5.0* 2.0-0 2.0-0 2.0-0 0 0 0** I
* only up to minimum of grade otherwise apply guidelines 85.1-91
** as a bonus (one-off) at the maximum level of guidelines 109.1-115. Also whatever amount bringing above Max of range is paid as a bonus (one-off).
Herebelow is the table of distribution of performance levels by compar ratio and (average salary: refer to letter in the list of average salaries below)
=85 85.1-91 91.1-97 97.1-103 103.1-109 109.1-115 =115
5 (A) 5(B) 5(C) F
10(D) 10(E) 5(F) 5(G) E
5(H) 10(I) 5(J) 10(K) 5(L) 10(M) 5(N) M
5(O) I
A $ 50’000 F $ 40’000 K $ 60’000
B $ 40’000 G $ 40’000 L $ 20’000
C $ 30’000 H $ 20’000 M $ 30’000
D $ 40’000 I $ 30’000 N $ 30’000
E $ 30’000 J $ 50’000 O $ 20’000
Simulate first what is the outcome of this situation following the guidelines.
In case of difference with the 5% (in amount) budget, what are the 2 ways you can use to come back to budget?

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