Take the 2-minute tour ×
Mathematics Stack Exchange is a question and answer site for people studying math at any level and professionals in related fields. It's 100% free, no registration required.

I am working on calculating staff raises with these few general criteria. Note that this is a very simplified example.

  1. The raise pool is 5% of the combined salaries
  2. The intent is to award 2% to anyone who is considered "adequate". In this example "adequate" is defined as an overall rating of 10. - There are 10 categories where you can score 0 (bad), 1 (adequate) or 2 (good)
  3. The remaining 3% will be distributed based on merit (those scoring over 10).

The problem of calculating total merit points and dividing up the pool is in a scenario where 2 people have a rating of 10 and one other person has a rating of 11, the person with the 11 gets the entire merit pool.

In reality the person scoring 11 is just slightly better than the people rated 10 so this method is faulty.

Name   Salary   Overall_Rating  Merit_Points  Standard  Merit      Total
Jim    $40,000.00   11          1.0            $800.00    $3,600.00   $4,400.00
Bob    $40,000.00   10          0.0            $800.00    $0.00    $800.00
Sam    $40,000.00   10          0.0            $800.00    $0.00    $800.00

Raise               5.00%                   
Pool amount         $6,000.00   -  Sum of salaries * raise %                
Standard            2.00%   -  Everyone gets this amount provided they have a rating of 10 or more              
Merit               3.00%   -  The remainer of the raise pool for merit                 
Merit Pool          $3,600.00  -  Total merit pool              
Total Merit Points  1.0  -  Sum of points over 10

In this example I added a "padding factor" to soften the distribution. Each person gets a baseline of 1 point for merit plus their actual merit points. This ensures that one person cannot get the entire pool when they are rated just slightly higher than the others. It also awards someone when they are rated significantly higher than the others.

Name   Salary   Overall_Rating  Merit_Points  Standard  Merit      Total
Jim    $40,000.00   11          2.0            $800.00    $1,800.00   $2,600.00
Bob    $40,000.00   10          1.0            $800.00    $900.00      $1,700.00
Sam    $40,000.00   10          1.0            $800.00    $900.00      $1,700.00

Raise               5.00%                   
Pool amount         $6,000.00   -  Sum of salaries * raise %                
Standard            2.00%   -  Everyone gets this amount provided they have a rating of 10 or more              
Merit               3.00%   -  The remainer of the raise pool for merit                 
Merit Pool          $3,600.00  -  Total merit pool              
Total Merit Points  1.0  -  Sum of points over 10
Padding             1.0 - Amount to pad calculations

My question is, what is this padding factor called? I have read of this technique for an unrelated calculation but I cannot recall what it is called. Sorry if this questions is too simplistic for this audience.

share|improve this question
    
From what it appears, you haven't included any factors (which are typically reserved for multiplications) but included an offset (raised the initial merit rating of each employee by one). It is a loosely used term in Statistics in my experience. The free dictionary defines it as: "something that counterbalances or compensates for something else." –  kuch nahi Jul 16 '11 at 5:11
    
Took me 2 days to think of it. The word I was looking for was damping. –  ericdc Jul 18 '11 at 0:11

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Browse other questions tagged or ask your own question.