Which HR concept would be used to calculate an employee's pay increase appropriate to the period of time worked?

• A. Prorating merit increases
• B. Proration of promotions
• C. Flat across-the-board increases
• D. Variable merit adjustments

Answer: (A)

Prorating merit increases is used when a pay raise should reflect the actual time an employee has worked within the period. If the annual merit increase is 4% but an employee only worked half of the cycle, the increase would be adjusted to about 2% for that cycle. This keeps compensation fair and aligned with the portion of the period the employee contributed, and it’s a common approach when hires occur mid-cycle or when the cycle doesn’t match the calendar.

Prorating promotions isn’t a standard practice for adjusting a raise, since promotions usually come with a new salary level rather than a fractional amount. A flat across-the-board increase applies the same percentage to everyone regardless of how long they’ve worked in the period, which ignores the time actually spent in the cycle. Variable merit adjustments relate to performance differences, not the portion of the period worked.