Using Wage Progression with Administer Compensation

This chapter provides an overview of the wage progression functionality and discusses how to set up and use wage progression with Administer Compensation.

Understanding Wage Progression and Administer Compensation

Automatic step progression is a standard practice in the manufacturing industry and retail industry of providing new workers with increases based on the passage of time or actual time worked. The definition of actual time worked will vary by bargaining agreement. The formulas used for calculating increases also differ by agreement.

The wage progression feature provides the ability to define a wage progression rule that captures the advancement criteria and step calculations. You can then generate the step details reflecting a grade pay range. Batch processes gather and analyze worker data to determine when a worker is ready for advancement and will insert the appropriate Job and Compensation rows reflecting the new step and pay rate.

Prerequisites

In order to use the wage progression feature, you must:

Use Human Resources as your core system of record for worker information.

The worker must be assigned a bargaining unit, labor agreement, and a salary plan that includes a wage progression rule.
Select Multi-Step Grade option on the Installation Table - HRMS Options page (Set Up HRMS, Install, Installation Table, HRMS Options).
Determine if your wage progression rules require time worked data.

If yes and if you use PeopleSoft Enterprise Payroll for North America, then associate special accumulators with all the appropriate earnings codes. Earning codes in the accumulators must be defined to match the wage progression rule's time requirements. You could alternatively create integrations to provide time data from other systems or enter the time manually on the Review Wage Progression page.

Setting Up and Using Wage Progression with Administer Compensation

To set up and use wage progression, use the Define Salary Grades (SALARY_GRADE_TBL) component.

Important! You will not use the Categorization Defaults page in the Define Salary Grades component because the labor agreement parameters do not apply. To associate a salary plan and grade to one or more labor agreements, use the Job Codes page of the Labor Agreement component (Set Up HRMS, Product Related, Workforce Administration, Labor Administration, Labor Agreement).

This section discusses how to:

Define a salary plan with a wage progression.
Define wage progression rules.
Apply wage progression rules to salary plans.

Pages Used to Set Up and Use Wage Progression with Administer Compensation

Page Name	Object Name	Navigation	Usage
Salary Plan Table	SALARY_PLAN_TABLE	Set Up HRMS, Product Related, Compensation, Base Compensation, Salary Plan Compensation, Base Compensation, Maintain Plans, Define Salary Plan	Define salary plan basics.
Define Wage Progression Rule	SALARY_PLAN_TABLE2	Set Up HRMS, Product Related, Compensation, Base Compensation, Salary Plan Compensation, Base Compensation, Maintain Plans, Define Salary Plan When you select the Wage Progression Plan check box, the Define Wage Progression link appears.	Define wage progression rules associated with a salary plan.
Salary Step Components	SALARY_GRADE_T3GBL	Compensation, Base Compensation, Maintain Plans, Define Salary Grades	Generate salary steps using wage progression rules.

Defining a Salary Plan with a Wage Progression Rule

Access the Salary Plan Table page.

Salary Plan

Wage Progression Plan

Select this check box if you want to associate a wage progression rule to this salary administration plan.

The other fields on this page are discussed in the Manage Base Compensation and Budgeting PeopleBook.

See Associating Salary Components With Salary Steps.

Defining Wage Progression Rules

Access the Define Wage Progression Rules page.

Step Generation Rules

Rate Calculation	Select the method to calculate rates. These values are used during the generation of rate codes and values that appear on the Salary Grade Step Components page. Values are: % Grade Max: Step rate will be the specified percentage of the grade's maximum rate. % Grade Min: Step rate will be the specified percentage of the grade's minimum rate. % Increase: A percentage-based increase will be added to the pay rate of the worker's previous step. Amt Increase: A specific amount for the increase to be added to the pay rate of the worker's previous step. Note. For incremental calculation methods, the step generation process will store a step rate code value based on the grade's minimum rate. However, during the wage advancement process of calculating the worker’s new step rate, incremental percentage or incremental amounts will be applied to the worker’s actual rate for the rate code designated in the wage progression rule. For the Percentage of Maximum or Minimum and the User Defined types, the worker's new rate value comes from the stored grade step rate codes. User Defined: Select this value if the step rates do not match the criteria of any of the other calculation methods. Rates must be manually entered on the Grade Step Components page.
Increment Type	Select the method required by your labor agreement to determine the manner in which a new hire or new-in-job worker is evaluated for advancement to the next pay step. Values are: Elapsed Months: Select this method if you want to advance the worker based on a number of months since they entered their step. Elapsed Weeks: Select this method if you to advance the worker based on a number of weeks since they entered their step. Hours Worked: Select this method if you want to advance based on the worker's actual hours worked. An interface to Payroll for North America is delivered, however staging tables can accept data extracted from other time sources. Time can also be entered manually into the Review Wage Progression page.
Comp Rate Code (compensation rate code)	This rate code is inserted on the grade step during step generation and will store the calculated rate.
Hours Accumulator	Only available if you select an Increment Type of Hours Worked. Select the Payroll for North America Payroll special accumulator to use in order to capture the hours worked for this wage progression rule.
Leave Accumulator	(Optional) This field is only available if you select an Increment Type of Elapsed Months or Elapsed Weeks. This Payroll for North America special accumulator can capture reported leave hours. This is only required if your progression rule has a secondary qualifier to make sure a worker has not exceeded the specified number of leave hours during the required elapsed time in the step.

Advancement Processing Rules

Exceed maximum for Grade	(Optional) This field is only available if the calculation method is an increase type. Select this check box if it is acceptable for the worker's new step rate to exceed the maximum for the grade.
Round to Max of Grade (round to maximum of grade)	(Optional) This field is only available if the calculation method is an increase type. Select this check box if you want to round the calculated new rate value to the grade maximum value when it is within the specified tolerance.
Tolerance Type	This field indicates the closeness unit that you want the rounding rule to evaluate. Select one of these values: Percent: Enter the percent for the tolerance. If you select this option, the Tolerance Percent field becomes available. Flat: Enter the amount of the tolerance. If you select this option, the Tolerance Amount field becomes available.
Tolerance Percent	Enter the percent for rounding purposes. This field is available if you select Percent as a Tolerance Type.
Tolerance Amount	Enter the amount for rounding purposes. This field is available if you select Flat as a Tolerance Type.
Advancement Approval Required	(Optional) Select this check box if approval is necessary before step increases are awarded. When selected you must review and manually approve workers in order for the step advancement batch process to pick them up and perform the step and compensation updates. To manually approve the advancement, use the Approve Employees to Advance page (Workforce Administration, Labor Administration, Wage Progression). If you select this check box, the Days Within: field becomes available.
Days Within:	To present workers for approval prior to their estimated advancement date, enter the number of days prior to that date. The workers will be set to Almost Qualified status during the Update Wage Progression Qualification sub-process. You can then approve them early, if appropriate. This can facilitate timely processing of the step and rate increase and its recognition by payroll.
Job Action:	Select a job action to be assigned by the advancement process when it inserts a new job row. Values come from the Actions page.
Reason:	Select a related reason code from the values which come from Action Reason page.

Note. Once workers have reached or exceeded the maximum rate for the grade, they are considered at parity for their job wage rate. When this occurs, the worker's step will be incremented to the highest step for the grade and they will be placed on Stop Wage Progression and will no longer be processed by any of the wage progression processes.

Note. Since the number of hours worked are accumulated in pay period increments, hours worked based rules assign the worker's advancement date as the start of their next pay period. Elapsed time based rules will assign the advancement date based on adding the required time in the step to the worker's step entry date.

Wage Progression Steps - Time in Step tab

Step	Enter the numerical value for the Step IDs in the order in which the wage progression rules should be generated.
Step Description	Enter a description for the step in this freeform field.
Time Required in Step	Enter the amount of time that the worker must remain in the step before they can be advanced.
Units	The values are display only and are automatically generated depending on the Increment Type field.

Wage Progression Steps - Increase tab

Increase Amount

Enter the amount for the rate increase for this wage progression rule. The increase parameter will vary depending on the calculation method. For example, if the method is percent of grade maximum, the value will be a percent or if the method is incremental amount, the value will be an amount. The currency code of the Salary Plan applies.

Wage Progression Steps - Time Limits tab

(Optional) These limits are secondary rules that can be applied in addition to the primary time in the step requirements.

Time Limit

For Hour-based rules: Enter a numerical value for the calendar time limit associated with the time in step requirement.

Time Limit Units

Select the increment used for the time limit. Values are Days, Months, Weeks, and Years.

Maximum Leave Hours

For Elapsed Time based rules: Enter the maximum number of leave hours that are allowed at each step.

You must also define and associate a Payroll for North America Special Accumulator in the Leave Accumulator field.

Applying Wage Progression Rules to Salary Plans

Access the Salary Step Components page.

Important! You must include ranges for the minimum, midpoint, and maximum salary ranges on the Salary Grade Table page prior to generating steps.

Salary Grade

Spec Accum (special accumulator)

Displays the Hours Accumulator value which reflects the Hours Worked accumulator from the wage progression rule defined for the salary plan. Only applicable when Payroll for North America is used.

Generate Steps or Regenerate Steps

Click this button to calculate or recalculate the salary steps per the salary plan's wage progression rules. Click the View All in the Salary Step group box to review the generated step details.

The button changes to Regenerate Steps once you have saved the page.

Important! You should regenerate steps when you change the wage progression rule.

Wage Progression Rule

Click this link to access the Wage Progression Rules page where you can view wage progression rules associated with this salary grade.

Salary Step

You can manually add Salary Component rate codes if the step requires rate codes in addition to those defined on the wage progression rule.

Hours to Next Step Increment

Displays the number of hours that the worker must accumulate in this step before being eligible for the next step increment.