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21 Define Individual Compensation

This chapter contains the following:

Define Individual Compensation: Overview

Configure compensation plans, payroll elements, HR actions, and other objects for defining plans to allocate off-cycle compensation to individuals or for personal savings and charitable contributions. Add payroll elements used in these plans to compensation history.

To define Individual compensation and personal contribution plans, application implementation managers and compensation administrators start from the Setup and Maintenance Overview page. Select Navigator - Setup and Maintenance.

Manage Compensation Plans

Individual Compensation Plans: Explained

Individual compensation plans define variable compensation that managers can award to individual workers outside of the regular compensation cycle, such as a spot bonus or education reimbursement. You can also create plans that workers use to manage their own contributions to charitable or savings plans.

The following components comprise the details of a plan:

Options
Payroll elements and input values
Eligibility
Distribution dates
Access restrictions
Instruction text

Options

Each plan must have at least one option, with which you associate payroll element details and optional eligibility requirements. For example, to specify a different compensation amount for each vehicle model within a company car plan, set up a separate option for each model. You can also attach different eligibility restrictions to each model, such as restricting luxury models to executives only. Another example is a spot bonus plan with options consisting of different fixed monetary amounts.

Payroll Elements and Input Values

Associate a payroll element with an option to store compensation-related information. You can associate each option with only one element and each element with only one plan and option.

When you set up an element, you configure input values that determine the following:

Compensation information that managers must enter when they award compensation under the plan
Data that workers must enter when managing their own contributions in a plan
Default values that aid managers or workers with data entry

For example, you can configure an input value to enter the vehicle mileage when issued for a company car plan.

Eligibility

Eligibility profiles control which compensation plans or options a particular worker is entitled to participate in. You can attach eligibility profiles to a plan, an option, or both plan and option. For example, you might attach an eligibility profile to the company car plan to include only the sales department, and then attach additional eligibility profiles to the vehicle model options to restrict luxury models to only executive positions.

Compensation eligibility evaluation processing also uses criteria defined at the element link level to determine whether a person is eligible for a compensation plan.

Distribution Dates

To specify when payments begin under the plan and when they end if compensation is recurring, select from several date rules, such as Next payroll period start date. You can select a rule that enables the manager or worker to enter the date, or use a formula to derive the dates by your own logic.

Plan Access Restrictions

Plan access restrictions control a user's ability to access or make updates to awards in individual compensation plans.

You can restrict access to a plan based on a combination of three factors:

HR Action, such as promotion, transfer, or position change

The plan is unavailable for actions that are not included. All HR actions are included by default, but you can override All with specific selections. You must specify access level and time details for each individually selected HR action.
Compensation plan access level
Restrict access separately for creating new allocations, updating allocations, or discontinuing allocations.
Time period of access
For each access level, specify access always, never, or during a specified date range. For example, to allow workers to enroll in a plan only during June and December of each year, specify these two monthly date ranges in each year for the new allocations access level.

Instruction Text

You can compose optional instruction text to assist managers or workers using the plan.

FAQs for Define Individual Compensation

Why can't I add an action to restrict access to an individual compensation plan?

Plans are available for all HR actions by default. To make the plan available only for specific HR actions, enable access restrictions and replace the default value of All by selecting a specific action. After selecting the first HR action, you can add rows and select additional actions. Specify access details for each individual HR action that you select.

Important

After you replace the default value of All, the plan is available only in the HR actions that you select.

What's the difference between plan access restriction and role-based security?

Role based security determines access to the work area where individual compensation can be awarded or updated.

Restriction by HR action provides a more granular way to control when users can add, edit, or delete individual compensation under the plan based on the HR action.