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Scenario for Compensation Planning

This scenario provides an example of a process performed by a compensation plan administrator and manager. Your company may follow a different process flow according to its business requirements.


Following organizational guidelines, a compensation administrator structures the company's employee and financial information as part of the compensation planning process.

The administrator establishes salary grades and salary plans, defines individual job codes and job family categories, verifies that employee information is up to date, and creates compensation guidelines and eligibility rules. The administrator defines the planning cycles with associated components and then creates budgets for each type of compensation that is included in the compensation plan.

After the definition process is completed, the administrator generates compensation plans for use by each manager participating in the planning process. The administrator reviews the compensation plans as well as the compensation history for each employee in the organization.


An organization's marketing director manages eight direct reports who, in turn, supervise numerous direct reports of their own. Each quarter, the organization's directors plan the compensation for each of their direct and indirect reports.

Using Siebel Compensation Planning, the marketing director defines the merit increase for each eligible employee based on guidelines established by the organization. For each employee who is eligible for a promotion, the director selects a new job code for the employee and specifies an increase in salary. The director then gives each eligible employee a percentage of his or her bonus target, based on the most recent annual review rating or another factor that might have been set up by the administrator. Finally, the director allocates a number of stock options to each eligible employee following guidelines based on the annual review rating.

After reviewing the compensation increases, the director adjusts the compensation for several employees to reduce the variance between the amounts allocated and the budget. The director then submits the compensation plan to his manager for approval.

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