Budgets

A budget is the amount of cash and/or equity that a company’s compensation team allocates during a performance cycle. At a high level, the value of setting up a budget is simple; It helps a company be intentional about how much they spend during a compensation cycle. Tactically, a budget creates guardrails for managers to make fair and efficient compensation decisions: Instead of asking managers to come up with their proposed comp changes themselves, budgets give them a set amount of resources to distribute across their teams.

Budget Philosophies

There are two ways to construct your budgets: Top Down and Bottom Up.

Top Down Budgets

Top Down Budgets are budgets that are assigned at the planner (i.e. manager) level. Budget allocations are assigned to planners for their entire worksheet of employees. This means that two different planners could see two different budget numbers when looking at the same set of employees (for example if one planner is a line manager and another is a senior manager).

This is known as holdback budgets.

Top Down Budgets are more time consuming to set up but allow for more nuanced budget management. A department level budget is a top down budget, but just assigned to the department head.

Bottom Up Budgets

Bottom Up Budgets are budgets that are assigned at the employee level. Budget numbers are allocated to each employee and then rolled up across all employees when a planner is looking at their worksheet. This means that two planners looking at the same set of employees will always see the same budget.

Bottom Up Budgets are easier to set up but do not allow for budget holdbacks.

Configuring Budgets

1. As a user with the Cycle Configuration permission, navigate to the Budgets tab within Configurations.

2. Select your Budget Philosophy (Top Down or Bottom Up)
3. Click Create a Budget
   
   

4. Name your budget - this is the name that will show up for end users.
5. Choose whether this budget is supposed to be for cash or equity. Companies typically have distinct budget types for both cash and equity (i.e. a merit cash budget, a market adjustment cash budget, an equity refresher grants budget). The product supports the following budget types:
   • Cash budget types: salary raise, variable raise, market raise, promotion raise, one time bonus, and annual bonus
   • Equity budget types: refresher grant, promotion grant, and performance grant
6. Select the columns that should be included when counting budget contributions.

7. Choose between a budget with an allocation or an Award Budget. An Award Budget simply displays the sum of the specified column (no denominator).
8. For Bottom Up Budgets, select the calculation method (skip this step if building a Top Down or Award Budget):
   • Create budgets from your company’s recommendation logic (most popular)
     • Example: a company’s recommendation logic says that employees who “greatly exceed expectations” get a 10% increase, those who “exceed expectations” get an 8% increase, and those who “meets expectations” get a 5% increase. The budget for salary raises will match these recommendations.
   • Create budgets as a % of compensation
     • Example: a company decides to allocate funds of 3% an employee to cover recent inflation in the US as part of a market raise budget. This gives managers the ability to allocate this market budget across eligible employees.
   • Create a custom budget amount per employee
     • Example: a company decides that they want to award equity spot bonuses to high potential employees at the company. They want to be able to provide custom grant amounts to this subset of employees, so they choose to use a custom budget.

9. Set up permissions. The Default Permission will apply to any users that do not have a role that matches any of the role overrides. The role overrides always take precedence (the same as Column Configurations). This allows you to set up budgets that only show/apply for a subset of planners.

10. For Top Down Budgets, permissions are slightly more complicated. You can choose whether a role has access to no budgets, just their own budget, or all budgets across the company. For example, you may want to give admins access to all budgets and managers access just to their own budgets.

Check out this article for configuring Top Down Budgets! -> Top Down Budgets: In-app Configurations

Uploading budgets

You have the ability to upload budget information if you have this information configured in a spreadsheet already.

1. Navigate to the Budgets tab and click Create Budget

2. Make your budget configuration selections. Select Upload Data at the bottom of the page

3. Set your permissions and click Save

4. Once the budget is saved, navigate to the Data Upload tab

5. Select all columns that are included in the data upload spreadsheet. Download the template by clicking Generate CSV. Click Upload Data to open the upload portal. Click Continue after reviewing the call outs in the upload portal

6. Drag and drop the file you would like to upload. The fields included in the spreadsheet will populate in the portal. Any errors will be flagged for you to correct. Editing options include

• Find and replace
• Column mapping
• Export
• Delete all rows with errors.

When you are done, click Save

Where Do Budgets Show Up?

Budgets are visible at the top of the Compensation Planning tab for your active cycle (see screenshot below).

For Top Down Budgets, if the user has permission to see more than their own budget, they will be able to change the planner dropdown to see the budget for any planner. The user can also click “Filter employees to selected planner” to filter down the set of employees in the table to match the budget they’re looking at.

Audit Log

Use the Audit Log to view any changes that have been made to the configuration or allocation of budgets. From your budget, select "Audit Log"

A panel containing a log of changes will populate.

Coming Soon

• More advanced budget permissions: We’re adding a permission that lets planners see budgets for themselves and any planners before them in approval chains.
• Better validation: We’re adding validation to prevent you from creating a budget for a planner that’s less than the sum of the budgets of the planners that roll up into them.

FAQ

• Can I use a combination of Top Down and Bottom Up budgets?
  • No, within any given cycle, budgets will either function all top down or all bottom up. If this doesn’t suit your needs, please reach out to your CSM - we’d love to hear more about your desired use case.
• Once I’ve started creating Bottom Up budgets, how can I change my mind and create a Top Down budget instead?
  • You can click the link to toggle the budget philosophy and switch, but be aware that making the switch will delete any existing budgets that you have created.