With the Pequity comp cycle product, there are many ways you can define your company's comp cycle budget. Below are the three ways you can break allocate that money! 💸
- A summation of the recommended increase values, derived from your company's compensation methodology & merit matrix logic.
One way to define your comp cycle budget is to rely on the summation of all recommended increase amounts. Based on your company's compensation logic, recommended increases will be populated for all available comp elements your cycle is leveraging (ie. salary, equity, bonus, etc). When using this approach, the budget number in the top right corner will be a summation of all of these recommended values. When opening up the granular view (clicking the carrot icon next to the larger budget number), the budget for each element will be the summed value of those recommendation amounts for those elements. - A static "fund" dollar value assigned to each planning group with the option to rollup that fund to other planning groups further in the planning waves.
During the set up process, you can determine and allocate specific budget or "fund" values for your planning groups. For example, you can assign $20,000 to the "Product" planning group in Wave 1 with the rollup group identified as "CTO". This $20,000 fund from the Product planning group will be added to the "CTO" planning group's fund in wave 2 in addition to their own fund value.
💡 Note: Defining a "rollup" group is optional. If you do not define a rollup group, the fund will remain in the assigned group and not travel further up the planning group chain.
Below is a diagram illustrating how this would work:
It is important to note one caveat to the rollup budget capabilities. There is currently no way for a budget from one planning group to be split into two separate planning groups higher in the planning chain. This is because there is no way for the tool to know which portion of the initial group's budget you want to be allocated to each of the following groups.
Never fear! The Pequity implementation team will work with you to solution the best rollup budget approach for your cycle's needs. 🦸♀️ - A combination of the two: the sum of recommendations + additional "fund" dollar value assigned to each planning group.
We typically see this approach taken when a company wants to give additional "slush fund" to specific planning groups. For instance, you may want the budget to remain a sum of the recommended values, but you may also want to give a specific planning group some discretionary funds to pull from in addition to the recommendations for high performers. In this case, you could have the budget remain the summation of recommendations, then assign a "fund" value to those groups. You can also then choose to roll that fund up to a higher planning group, but this is optional.
Not sure how to handle the budget for your specific use case? The Pequity implementation team is here to help! We're happy to chat about how to make your specific comp cycle use case work in the tool so you can breathe easy for this year's comp cycle. 😅