09 Feb 2026
by Alex Morgan Permalink

Merit Matrix Calculator

Posted on by Alex Morgan
Merit Matrix Builder

Merit Matrix Builder

This tool helps compensation professionals create merit increase matrices that stay within budget. Enter your performance rating distributions, compa-ratio employee counts, and overall merit budget—the calculator uses goal-seek logic to generate recommended merit percentages for each cell. The weighted average of all cells will equal your target budget.

Quick Reference Guide
Getting Started:
  • Set your overall merit budget (e.g., 3.0%)
  • Performance multipliers: 100% = receives the baseline budget; 150% = receives 1.5x the baseline
  • Compa-ratio multipliers: Higher multipliers for employees below market (to bring them up); lower for those above
Working with Rows:
  • Add: Click "+ Add Rating" or "+ Add Band"
  • Delete: Click the X on the right side of any row
  • Reorder: Drag the handle on the left
Segments:
  • Create separate matrices for different populations (e.g., Exempt vs. Non-Exempt)
  • Click "+ Add Segment" to add a tab
  • Click the pencil icon to rename a segment
Merit Range Matrix:
  • The Range Matrix provides managers with flexibility around the recommended merit values
  • Minus (%): How far below the recommended value the range extends (default: 0.5%)
  • Plus (%): How far above the recommended value the range extends (default: 0%)
  • Example: A recommended value of 3.00% with Minus 0.25% and Plus 0.25% displays as "2.75% - 3.25%"
  • Range minimums will not go below 0%
Exporting Data:
  • Export to CSV: Exports the main merit matrix with numerical values (no % symbol)
  • Export Range to CSV: Exports the range matrix with separate Min and Max columns for each compa-ratio band
  • Exports are segment-specific—the currently active segment tab is what gets exported
  • CSV files can be opened directly in Excel or Google Sheets
Tips:
  • Performance population % should total 100%
  • Compa-ratio counts are converted to percentages automatically
  • Warnings appear if inputs need attention
  • Your data saves automatically in your browser

Performance Ratings

Compa-Ratio Bands

Generated Merit Matrix

Merit Range Matrix

View Calculation Proof

About the Author: Alex Morgan

As a Senior Compensation Consultant for MorganHR, Inc. and an expert in the field since 2013, Alex Morgan excels in providing clients with top-notch performance management and compensation consultation. Alex specializes in delivering tailored solutions to clients in the areas of market and pay analyses, job evaluations, organizational design, HR technology, and more.