How to Construct Salary Ranges, Administer Increase Budgets and Build Merit Increase Matrices in Today's Economy

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    Speaker: Teri Morning

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    Duration: 90 Minutes
    Product Code: 51013
    Level: Intermediate

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Let’s be honest. People work for money. The salary budget while often the biggest expense in a company, is to employees a reward system for their work performed in your company and for the skills they bring to the workplace.

Before you get started, keep in mind that adopting a competitive, pay for performance philosophy requires some extra work. Because a merit matrix connects performance to market rate pay. However, in order to differentiate wages based upon the results of your employees, you need to know what you want people to do, be able to sort out how they are performing and, based on that, differentiate their pay. The merit-based, pay-for-performance matrix also serves as a guide for supervisors so that they suggest pay increases that are fair and support business objectives.

The benefit of your extra effort regarding salary benchmarking is that you can drive your funds towards rewarding high-performing employees who may currently be paid less than the market. Because, realistically, salary budgets and increase budgets are determined not only by compensation philosophy and range movements but the actual budget (or not) the employer has.


Compensation decisions are a direct method of communicating with your employees. When your supervisors determine how to construct salary ranges, which employees will get pay increases and how much they deserve; they are making or breaking your business. How? By connecting performance to pay, or not, your managers tell your employees what sort of work ethic, skills, and attitude are rewarded at your company.
A merit-based, pay-for-performance matrix system serves as a guide for supervisors and connects performance to market rate pay. Pay increases are fair, logical and support business objectives.


  • Compensation is a reward system. Changing the mindset of pay and taking the mystery out of pay
  • Basic elements of a preparing salary matrix
  • Internal equity, external equity and individual performance
  • Current salary structures - understanding how the numbers got that way and what it means now
  • Building modern salary budgets and pay-for-performance matrix system
    • Using what money you have (no matter how little) for increases in a more effective way - offsetting the effects of salary compression while rewarding higher performers
  • Connecting performance with pay and constructing individual incentive plans
  • Merit budgeting
    • Using a limited merit increase budget most efficiently
  • What is variable pay
    • How to use variable pay in conjunction with your existing salary system
  • How salary compression and salary inversion happen and what you can do
  • How an automatic Cost of Living Adjustment (COLA) nowadays is akin to the idea of Santa Claus. Nice but not real
  • How small or mid-sized businesses can have more flexibility with pay
  • How explaining how salary ranges are determined and increases awarded can help an employer operationally - not only at increase time but also year round
  • Mistakes that can blindside an employer compliance wise


It’s a fact of life that most people have to work for money. Even people who love their jobs likely would not perform them for free.
To a company, the salary budget is its biggest expense. However to your employees, it’s a reward system for their work performed in your company and for the skills they bring to the workplace. It is also communicating to your employees what sort of work ethic, skills, and attitude are rewarded at your company.

So when a company determines how pay-for-performance matrix system is structured, including wage rates and for what and how employees will be rewarded, those decisions are critical “make or break” decisions.
Today, every company is a performance based company and as such needs to learn how to use what salary budgets it has for maximum effect on employee performance while still ensuring equity within internal and external components and avoiding compliance problems.

The benefit of your extra effort regarding compensation is that you can drive your funds towards rewarding high-performing employees and send the right messages regarding what your company really rewards.


  • HR Managers
  • HR Generalists
  • Business Owners and CEO's
  • Plant Managers
  • Management Personnel
  • Compensation Associates
  • CFO's


Years of Experience: 20+ years

Areas of Expertise: Human Resource Development, Performance Management, and Conflict Management

Teri Morning, MBA, MS, SHRM-SCP, is President of Hindsight Human Resources, LLC. and specializes in solving company “people problems.” 

Teri also sources software solutions for compensation and performance management. 

Twenty+ years human resource and training experience in a variety of fields, including retail, distribution, architectural, engineering, consulting, manufacturing (union), public sector and both profit and non-profit companies. 

Teri has enjoyed consulting with employers on their problems and trained managers and employees for over 20 years, meeting and working with employees from all types of businesses. 

In addition to a MBA, Teri has a Master’s degree in Human Resource Development with a specialization in Conflict Management. 

Teri was certified by the State of Indiana in mediation skills, Teri is certified in Project Management and IT Management, qualified as a Myers-Briggs practitioner and holds the SHRM certification of a Senior Certified Professional.

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