Cycle setup: Input factors

What is an input factor? 

Input factors are the criteria and factors that are used to help you evaluate and make your compensation and promotion decisions.

A similar example in life would be evaluating factors to make a decision to buy a house. First, you may want to decide the criteria (input factors), such as the location, the price, the size, and the neighborhood. Then, you give a score for each criterion whenever you add a house to your shortlist. In addition, you may want to decide how important each criterion should weight in your decision-making process, so assigning a weight for each criterion would then give you a total score for each house. With this total score, in the example below, 80 is the highest, so it’s clear which house you should buy.

In the context of the Compensation module, to decide if an employee should get a salary raise, you may want to consider their past performance, their business goal completion, and perhaps their personal development goal completion as well.

Note: The option to add weights to your input factor only shows up when you have more than one input factor set up. 

The available input factors are:

• Universal increase
  • This can be used when you want to give all employees the same increase as a stand-alone rule (takes 100% weight) or as a fixed base in combined input factors (takes a certain percentage as you wish). The score for this input factor is always 100. Therefore whatever weight is assigned to this factor would be fully enabled, thereby making the score for this input factor always equal to the entire weight. 
• Review manager score
  • This input factor uses the employee’s review manager score from the selected cycle. When no specific cycle is selected, the latest cycle’s review manager score of this employee will be used for calculation. The review score will be normalized to 0-100 for consistent calculation.
• Review question/competency score
  • This input factor uses the employee’s specific question score or skill score from the selected template. It will consider scores employees received from all perspectives: self/peer/direct report/manager assessments. The score from the latest cycle in which employees participated will be used for calculation. The review score will be normalized to 0-100 for consistent calculation.
  • Please note: only questions and competencies that have a score can be used in this input factor. If a question or skill was only given comments, we cannot use a score to calculate.
• Business goal average completion
  • This input factor uses the employee’s average completion of the business goals that the employee owns or contributes to, as well as the key results they own, while considering the selected goal tags. The completion percentage multiplied by 100 will be used for consistent calculation. For instance, if an employee’s completion is 89%, we’ll use 0.89*100=89 as the score of this input factor.
  • All goals with the statuses : Live, active, archived, draft, and approval pending , will be pulled into this input factor to calculate the score.
• Development goal average completion
  • This input factor uses the employee’s average completion of the development goals that the employee owns while considering the selected goal tags. The completion percentage multiplied by 100 will be used for consistent calculation. For instance, if an employee’s completion is 89%, we’ll use 0.89*100=89 as the score of this input factor.
  • All goals with the statuses : Live, active, archived, draft, and approval pending , will be pulled into this input factor to calculate the score.
• Custom Attribute
  • This input factor utilizes the custom attribute feature, where if there is a numerical custom attribute such as 'Company Revenue Goal Completion', you have the ability to include this within your input factor(s). Please note that only custom attributes that are marked as 'Number' will be able to be selected. In addition to this, If no 'Maximum score is entered, the highest score will be used as the maximum score if none is entered.

Setting up multiple input factors and assigning fair weights based on your company culture can ensure a consistent evaluation method.

Example

You can set up a salary recommendation rule, which applies to all sales teams except for team members whose tenure is shorter than 24 weeks. You can then add 4 input factors and weight them as:

• Review manager score: Select 'Q3 2022 Sales review cycle', Assign weight: 30%
• Business goal average completion: Select goal tag: 'Q3 2022 goal cycle', Assign weight: 30%
• Review question/skill score: Select skill: ‘deliver results’, Assign weight: 20%
• Development goal average completion: Select goal tag: 'Q3 2022 personal goal', Assign weight: 20%

As a result, let’s use the employee Lisa May as an example, we would look at those input factors and calculate the respective score as below:

• Q3 2022 Sales review cycle manager score: 85
• Goals with tag: ‘Q3 2022 goal cycle’ she owns, the average completion: 80
• Latest review cycle, her skill score of ‘deliver results': 78
• Goals with tag: ‘Q3 2022 personal goal’ which she owns, the average completion: 88

Now, we can get the total score of Lisa May:

85* 30% + 80* 30% + 78* 20% + 88 * 20 = 82.7

Setting up Recommendation Conditions

As Super-admin, Compensation module admin, or cycle owner, you can then decide, based on the range the total score falls into, what the recommended change for the salary is. For instance, set 3 recommendation conditions in this specific cycle for the Sales team:

• When total score is between 80-100, give this employee an 5% salary increase
• When total score is between 70-80, give this employee an 3% salary increase
• When total score is between 65-70, give this employee an 2% salary increase

Please note: when setting the condition score ranges, 70 will be included in the 65-70 range, 80 is included in the 70-80 range, 100 is included in 80-100 range. 

What’s the universal increase, and how to use it?

The universal increase input factor is best used for cases where a group of employees should have a salary or bonus increase regardless of other factors (performance, goal completion etc.)

There are two ways you can leverage it:

1. For instance, if your company considers a universal increase to adjust inflation, you can include this input factor in your salary rule setting and assign a weight (let’s say 10%). We will use 100 to multiply 10%, which is 10 as the score of this input factor. You can then add other input factors and get a total score and set up a recommendation condition, such as when the total score is 10, increase by 3%. As a result, regardless of other input factors' scores, every employee who is eligible under this rule would at least get a score of 10, thus will have a recommended increase of at least 3%.

2. Another way of using the universal increase is to use this as a sole input factor under one rule, and set up other rules with other input factors. In this case, we always show all recommendations from all recommendation rules. Managers will see that the universal increase suggests a 3% increase for all employees who are eligible under this rule, and other recommendations amounts, for instance, increase by 5%, thus the manager can do a sum-up of 3% and 5%, and get the reference increase amount for an employee.

Best practice

Experiment with different rule sets and try different combinations of input factors during the testing phase to find the sweet spot for the best input factors, weighting, and conditions suited for your organization’s needs.

Use multiple input factors such as a combination of review score and goal completion under one rule to ensure the recommendation is based on multiple factors instead of only considering review score, for instance.

The same input factor can also be used multiple times. For instance, you can set up a salary review cycle for Sales teams with a salary rule as such :

• Add Review manager score as an input factor, select 'Q3 2022' cycle, and assign a 10% weight
• Add Review manager score input factor again, select 'Q2 2022' cycle, and assign a 5% weight
• Add Review question/skill score, select 'Sales annual review' template, select skill: ‘Deliver results’, assign a 15% weight
• Add Review question/skill score again, select company-wide review template, select skill: ‘Ownership’, assign a 10% weight
• Add Business goal average, select 'Q3 OKR' tag, and assign a 30% weight
• Add Development goal average, select 'Q3 OKR' tag, and assign a 15% weight
• Add Development goal average, select 'Q2 OKR' tag, and assign a 15% weight

As a result, all employees in the Sales teams will be evaluated holistically by different input factors from different reviews, competencies, and goals.

Set up dedicated salary and bonus rules if your cycle includes both salary and bonus as the cycle type. We will show you all recommendations from all the rules you set up, and the final recommendation is the highest amount. However, you are free to make your own decision on the final change of the salary and bonus based on all the recommendations and other contexts.