Merit Matrix Workflow: From Creation to Finalization

Overview

Merit Matrix follows a structured workflow designed to ensure proper review, approval, and implementation of compensation changes. This guide walks you through each stage of the process, explaining what happens at each step, who can take action, and how to move between workflow states.

The workflow balances efficiency with governance, allowing for rapid processing while maintaining appropriate oversight and approval controls. Understanding this workflow is essential for all users involved in compensation planning.

Complete Workflow Diagram

Workflow States Explained

1. Draft Status

Purpose: Initial creation and configuration phase
Duration: No time limit - can remain in draft indefinitely
Who Can Edit: HR Administrators, Matrix Creator, Super Administrators

Available Actions:

• ✅ Edit all matrix settings and parameters
• ✅ Modify calculation weights and thresholds
• ✅ Adjust budget parameters
• ✅ Change performance period dates
• ✅ Delete the matrix
• ✅ Start calculation process
• ✅ Cancel the matrix

What You Can Do:

• Configure merit matrix parameters
• Set budget constraints and targets
• Adjust calculation weights for your organization
• Test different threshold settings
• Save as template for future use

Moving Forward:
Click “Start Calculation” to move to Calculating status. This will lock editing and begin AI processing.

Best Practices:

• Review all settings thoroughly before starting calculations
• Test with a small employee group if possible
• Verify budget totals and percentage ranges
• Confirm performance period dates align with review cycles

2. Calculating Status

Purpose: AI processing of performance data and merit calculations
Duration: Typically 5-30 minutes depending on organization size
Who Can Monitor: All authorized users can view progress

What Happens:

1. System pulls performance review data
2. Integrates goal completion percentages
3. Applies development progress scores
4. Calculates tenure factors
5. Applies weighted formulas
6. Generates individual merit recommendations
7. Validates budget constraints
8. Creates calculation summaries and analytics

Available Actions:

• ✅ View calculation progress
• ✅ Monitor system status
• ❌ Edit matrix parameters (locked during calculation)
• ✅ Cancel calculation (returns to Draft)

Automatic Progression:
Once calculations complete successfully, status automatically advances to “Pending Approval”

If Calculations Fail:

• Status returns to “Draft”
• Error messages explain the issue
• Most common causes: missing performance data, invalid date ranges, budget calculation errors

3. Pending Approval Status

Purpose: Review and approval phase for managers and executives
Duration: Set by approval deadline in matrix configuration
Who Can Approve: HR Administrators, Managers (for their teams), Super Administrators

Available Actions for Reviewers:

• ✅ Review all calculations and recommendations
• ✅ View budget impact and utilization
• ✅ Examine individual employee calculations
• ✅ Submit for approval
• ✅ Request revisions (returns to Draft)
• ✅ Add approval comments and notes
• ❌ Edit calculation parameters

Approval Requirements:
Different approval paths based on organizational settings:

Review Process:

1. Initial Review: Managers review calculations for their direct reports
2. Budget Validation: HR verifies budget utilization and constraints
3. Executive Approval: Senior leadership approves significant budget impacts
4. Final Validation: System performs final checks before approval

Common Review Actions:

• Verify calculation accuracy for key employees
• Check budget utilization against targets
• Review distribution of merit increases
• Validate compliance with organizational policies
• Confirm effective dates and implementation timeline

4. Approved Status

Purpose: Final approval granted, preparation for implementation
Duration: Brief transition state before finalization
Who Can Access: All stakeholders can view approved matrices

Available Actions:

• ✅ View final calculations and budget impact
• ✅ Generate implementation reports
• ✅ Export data for payroll systems
• ✅ Finalize the matrix
• ✅ Generate audit reports
• ❌ Modify calculations or parameters

Pre-Finalization Checklist:

• All approvals obtained and documented
• Budget utilization within acceptable ranges
• Implementation date confirmed
• Payroll team notified and prepared
• Communication plan ready for employees
• Audit trail complete and accessible

Moving to Finalization:
Only HR Administrators and Super Administrators can finalize approved matrices. This action is irreversible and locks all data permanently.

5. Finalized Status

Purpose: Implementation-ready state with complete audit trail
Duration: Permanent - becomes historical record
Who Can Access: All stakeholders (read-only)

Available Actions:

• ✅ View complete audit trail
• ✅ Generate compliance reports
• ✅ Export implementation data
• ✅ Create historical analysis
• ❌ Modify any data or settings

What Happens After Finalization:

• Data becomes read-only historical record
• Implementation reports generated automatically
• Audit trail locked and preserved
• Compliance documentation created
• Ready for payroll system integration

Role-Based Permissions

HR Administrator

Full Access Rights:

• Create new merit matrices
• Edit all parameters in Draft status
• Start and monitor calculations
• Approve matrices (all budget levels)
• Finalize approved matrices
• Cancel matrices at any stage
• Generate all reports and exports
• Access complete audit trails

Manager

Team-Specific Rights:

• Review calculations for direct reports
• Approve matrices affecting their teams
• View budget impact for their departments
• Submit approval recommendations
• Access team-specific analytics
• Request revisions when needed

Limitations:

• Cannot edit matrix parameters
• Cannot approve organization-wide budgets exceeding limits
• Cannot finalize matrices
• Cannot cancel matrices they didn’t create

Employee

Read-Only Access:

• View their own merit calculation (when matrix is Approved or Finalized)
• See historical merit increases
• Access personal performance factor breakdown
• View effective dates and implementation timeline

No Access To:

• Other employees’ calculations
• Budget information
• Organizational analytics
• Draft or calculating matrices

Workflow Best Practices

Planning Phase

1. Set Realistic Timelines: Allow adequate time for each workflow stage
2. Define Clear Approval Chains: Establish who approves what budget levels
3. Communicate Deadlines: Ensure all stakeholders know their review windows
4. Prepare Stakeholders: Train reviewers on the process before starting

Execution Phase

1. Monitor Progress: Track workflow advancement and identify bottlenecks
2. Maintain Communication: Keep stakeholders informed of status changes
3. Document Decisions: Add comments explaining approval rationale
4. Handle Exceptions: Have a process for unusual cases requiring manual review

Completion Phase

1. Verify Accuracy: Final review before finalization
2. Prepare Implementation: Coordinate with payroll and finance teams
3. Plan Communication: Develop employee communication strategy
4. Archive Documentation: Ensure audit trail is complete and accessible

Troubleshooting Common Workflow Issues

Stuck in Calculating Status

Symptoms: Matrix remains in calculating status for extended periods
Causes: Missing performance data, system load, data integration issues
Solutions:

• Check for missing employee performance reviews
• Verify goal management data completeness
• Contact system administrator if calculation exceeds expected timeframe
• Cancel and restart calculation if necessary

Approval Bottlenecks

Symptoms: Matrix pending approval past deadline
Causes: Unclear approval responsibilities, stakeholder availability, review complexity
Solutions:

• Send reminder notifications to pending approvers
• Escalate to next level if original approver unavailable
• Review approval chain configuration
• Consider emergency approval procedures if time-critical

Revision Loops

Symptoms: Multiple cycles of revision requests
Causes: Unclear requirements, changing priorities, budget constraints
Solutions:

• Hold stakeholder alignment meeting before restarting
• Document specific revision requirements clearly
• Consider budget adjustments if constraints are unrealistic
• Establish clear sign-off criteria before re-entering workflow

Permission Errors

Symptoms: Users cannot take expected actions
Causes: Role assignments, permission configuration, access control issues
Solutions:

• Verify user roles and permissions
• Check merit matrix specific access controls
• Confirm EPMS feature enablement
• Contact administrator for role adjustments if needed

Summary

The Merit Matrix workflow ensures proper governance while maintaining efficiency in compensation planning. By understanding each state, available actions, and role-based permissions, organizations can move smoothly from initial creation through final implementation.

Key takeaways:

• Each workflow state has specific purposes and available actions
• Role-based permissions ensure appropriate oversight and control
• Proper planning and communication prevent common bottlenecks
• The system provides flexibility while maintaining audit trails and compliance

For detailed information on calculations and budget management, see our related Merit Matrix articles.