Maya Bergström· Benefits Manager, Meridian Health Systems
Asked in Compensation ·
Our review is effective 1 January and anyone hired before 1 October is eligible, pro-rated by months worked. I am the only compensation person at an engineering consultancy in Canada with about 600 staff.
Managers dislike pro-rating. A July hire with a strong rating gets half of 3.5%, so 1.75%, and then waits another twelve months. Several have asked for full increases on the grounds that the offer was made against last year's ranges.
Is pro-rating still common practice, and where do you draw the eligibility cut-off?
9 helpful · 3 insightful · 3 replies · 151 views · 8 following
Accepted answer· by Yusuf Haddad
We pro-rate for anyone with less than twelve months but changed the cut-off logic. Hired in the first half of the year: pro-rated. Hired in the second half: no merit increase, but the offer is made against the coming year's ranges, which recruiters have from September. That removed the argument completely. The second-half hires are already priced on the new structure, so there is nothing to catch up.
Read in the conversation ↓
Benefits Manager, Nordvik Energy
Accepted answer
We pro-rate for anyone with less than twelve months but changed the cut-off logic. Hired in the first half of the year: pro-rated. Hired in the second half: no merit increase, but the offer is made against the coming year's ranges, which recruiters have from September.
That removed the argument completely. The second-half hires are already priced on the new structure, so there is nothing to catch up.
Global Mobility Manager, Aurora Hospitality
We stopped pro-rating three years ago. The saving was about 0.15% of payroll and it generated more queries than any other rule. Cut-off is 1 October, and everyone before it gets the full matrix increase.
Senior Compensation Analyst, Qasr Holdings
One caveat on paying in full: check what it does for someone hired in February against someone hired in September. Both get the same increase for very different contributions. Pro-rating is clumsy but it is at least explainable.
