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This scenario provides an example of a process flow performed by a compensation administrator and sales representative using Employee Balances. Your company may follow a different process flow according to its business requirements.
Network Ltd. uses a Year-to-Date program to compensate its employees. Each month, Catherine Andrews, the compensation administrator, uses Year-to-Date Calculation Runs to calculate Employee Earnings to Date, and because the calculation run is a year-to-date calculation, performance is accumulated from the beginning of the year.
In July, Andrews calculates and releases statements of earnings (calculation runs) and payment releases for Q1 and Q2. However, later that month Network Ltd. implements some changes to the compensation plan, retroactive to the beginning of the year. To reconcile, or true up the balances, Andrews recalculates Q1 and Q2 earnings and replaces the previous calculations for those periods with the recalculated ones.
The retroactive plan changes increases the Q1 and Q2 earnings for several employees, creating Balances Due on the True-Up Calculation Run. When Andrews sees the Balances Due, she creates a new Payment Release record. In reviewing the Payment Release Details, she decides to adjust the amount released for one employee and withhold part of the Balance Due. Andrews enters a comment about the adjustment, and then initiates the Payment Release.
One of the sales representatives affected by the retroactive changes brings up her Employee Balance view and sees that a balance is due. However, when the payment arrives, it does not seem to be the full amount. She looks at the payments she has received to date and verifies them against her bank statements. The payment amounts are correct, so she reviews the list of earnings to date. The earnings amount for January looks incorrect, so she drills into the earnings record to the compensation view, where she can review the details behind the earnings record. Convinced that this is the correct earnings, she is still confused about why she was not paid the entire balance due. Going back to the Employee Balance Details view, she notices a comment from Andrews next to her most recent payment. The comment states that one of the sales that has already been credited to the sales representative will be reversed, and that part of the balance is being withheld in order to avoid creating a future negative balance for the sales representative.
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