A computer based heuristic methodology for the development of salary administration guidelines

The paper discusses the development of a heuristic methodology to generate salary merit increases and to schedule these salary actions along a specified planning horizon. The heuristic approach consists of two procedures, referred to as Heuristic Procedure 1 and Heuristic Procedure 2. For a group of executive personnel, Heuristic Procedure 1 yields salary increase percentages, in such a way that external consistency is maximized without violating internal consistency conditions. Heuristic Procedure 2 establishes the time intervals between salary increases for each eligible employee. A comparison is performed, in terms of computer execution time and optimality of solutions, between the heuristic methodology and a mathematical programming approach developed for formulating salary administration guidelines. Computational results are reported for a number of sample problems.