Setting Up Compensation Management

Before you use the compensation management feature, you must define critical information that the system uses for processing. You set up this information to meet specific needs of the organization.

This chapter lists prerequisites and discusses how to:

• Define common settings for compensation management.

• Set up the additional system options.

• Define increase type guidelines.

• Define increase type rules.

• Define the approval hierarchy.

• Define public models.

• Define the performance appraisal scale.

• Generate the Employee/Supervisor Relationship table.

• Generate Compensation Review Work tables.

Prerequisites

Before you complete the tasks in this section:

• Define the system options for pay rate edit and position control.

  See Setting Up System Options.

• Define increase type eligibility.

  See Setting Up Eligibility Tables.

Defining Common Settings for Compensation Management

This section discusses how to set up common settings for compensation management.

Understanding Common Settings for Compensation Management

Setting up the common settings for compensation management enables you to specify whether the application performs certain processes and how it performs these processes.

This table describes the common settings for data items in the Common Settings for EE Self Service Appl (Common Settings for Employee Self Service Applications) program (P05004):

See Also

Setting Up System Options

Setting Up the Additional System Options

This section provides an overview of additional system options for compensation management and discusses how to set up additional system options.

Understanding Additional System Options

To control certain aspects of the compensation review process, you need to set up two additional system options for compensation management. You set up one system option to specify whether to enable increase amounts to be outside of the guideline range and, if you enable the amounts to be outside the range, whether to issue a warning or a hard error. You set up the second system option to specify the date on which to base the calculation of the length of service.

Form Used to Set Up Additional System Options

Setting Up Additional System Options

Access the Human Resources Additional Options form.

Increase Guideline Edit	Enter a code that specifies whether the system enables increase amounts that are outside of the guideline range and the type of message that appears when this occurs. Values are: 0: Do not increase. 1: Issue a warning message that indicates that the increase is out of range. 2: Issue an error message that indicates that the increase is out of range.
Based on Date (Length of Service)	Enter a user-defined code (08/RW) that specifies the date on which to base the calculation of the employee's length of service.

Defining Increase Type Guidelines

This section provides an overview of increase type guidelines and discusses how to define increase type guidelines.

Understanding Increase Type Guidelines

Organizations often have specific guidelines for the kinds of compensation increases that employees are eligible to receive. These guidelines can be based on a number of evaluation factors, such as length of service, performance appraisal ratings, and the amount of time served in a current position. Often, several factors determine an employee's compensation increase.

To track the guidelines that are used in determining employee increases and to assist in administering compensation increases that are within those guidelines, you can create increase guideline tables to define the types of increases that employees are eligible to receive. Managers then use these guidelines to make salary decisions.

You can create increase guideline tables to facilitate these compensation increase scenarios:

• Ranges for one evaluation factor.

  For example, if the company bases compensation increases on length of service alone, a table with established ranges for one evaluation factor, such as length of service, can store all of the necessary increase guidelines.

• Ranges for two evaluation factors.

  For example, if the company bases compensation increases on length of service and performance appraisal rating, a table with established ranges for both of these evaluation factors can store all of the necessary increase guidelines.

  Note. These tables are for informational use only and are not used by the system to calculate actual employee compensation increases. No employee information is updated directly as a result of the information in these tables.

Example: Increase Guidelines Based on Length of Service

The organization might have a compensation increase policy that is based on employees length of service. For example, assume employees who have been employed between 0 and 24 months receive 5 percent increases, employees who have been employed between 24 months and 60 months receive 7 percent increases, and employees who have been employed for more than 60 months receive increases of 10 percent.

To help administer this policy, you can set up an increase guideline table that defines the types of raises that employees are eligible to receive based on their length of service.

Using the evaluation factor of length of service, you can create three different ranges in which to group the employees. The first range includes all of the employees who have been employed between .001 and 24.000 months. The second range includes all of the employees who have been employed between 24.001 and 60.000 months. The last range, 60.001-9999.000, includes all of the employees who have been employed more than 60 months.

This is an example of the setup for increase guidelines based on length of service:

Example of Increase Guideline Table form

Note. You must complete both the Data Item for Column Factor field and the Data Item for Row Factor field in the Define Increase Type Guidelines program (P08820). If you are using only one evaluation factor, such as length of service, you must complete both fields with that evaluation factor.

Example: Increase Guidelines Based on Length of Service and Performance Ratings

The company might have a compensation increase policy that is based upon employee length of service as well as performance appraisal ratings. For example, assume that employees who have been employed between 0 and 24 months and have a performance appraisal rating of 80 or higher are eligible to receive an increase of between 5500 and 6500. Employees who have been employed between 24 and 60 months and have a performance appraisal rating that is between 65 and 80 are eligible to receive an increase of between 3500 and 4500.

To help administer this policy, you can set up an increase guideline table that defines the types of raises that employees are eligible to receive based on their length of service and their performance appraisal ratings.

This is an example of the setup for increase guidelines based on length of service and performance ratings:

Example of Increase Guideline Table form

Using this increase guideline table helps to ensure that each employee receives the proper increase. For example, you can determine what the compensation increase should be for an employee who has been employed for 48 months and has received a 78 on the most recent performance appraisal. Using the previous example, this employee is eligible to receive an increase of between 3500 and 4500.

The factor that you use as the column factor or the row factor does not matter. Changing these factors does not affect the outcome of the table information; only the way that the information appears on the table affects the outcome. If you change the appearance of the evaluation factors, the table displays the information differently. However, an employee who has been employed for 48 months and received a 78 on the most recent performance appraisal is still eligible to receive an increase of between 3500 and 4500.

Form Used to Define Increase Type Guidelines

Defining Increase Type Guidelines

Access the Increase Guideline Table form.

Guideline table code	Enter a table code to define the increase guideline ranges for an increase type.
Input Method	Enter a value from UDC (08/RB) that specifies whether the input method is a fixed amount or a percentage.
Data Item for Column Factor	Enter a data item to represent the increase guideline column ranges.
Data Item for Row Factor	Enter a data item to represent the increase guideline row ranges
Ending Date	Enter the date on which the item, transaction, or table becomes inactive or through which you want transactions to appear. This field is used generically throughout the system. It could be a lease effective date, a price or cost effective date, a currency effective date, a tax rate effective date, or whatever is appropriate.
From	Enter the lower minimum amount to be compared for Column Range 1.
Through	Enter the higher maximum amount to be compared for Column Range 1.
From	Enter the lowest factor for the row.
Through	Enter the highest factor for the row.
Range 1 Low limit	Enter the low limit for Range 1.
Range 1 High limit	Enter the high limit for Range 1.

Defining Increase Type Rules

This section provides an overview of increase type rules and discusses how to define increase type rules.

Understanding Increase Type Rules

After you set up the increase guideline tables, you need to identify the increase type rules. Organizations often have specific rules for the types of compensation increases that employees are eligible to receive. These rules can include eligibility rules, whether a job title change is allowed, rounding rules, salary guidelines, budget allocation, and the date on which a prorated factor is calculated. You set up the increase type rules to define the default information for a specific increase type.

Form Used to Define Increase Type Rules

Defining Increase Type Rules

Access the Increase Type Rules form.

1. Complete these fields:

   • Increase Type Code

   • Company

   • Effective Date

     The system date is the default effective date.

   • Increase Type Description

     The system completes this field with the Increase Type Code description.

2. To enable job title changes, select the Allow Job Title Change option.

   You enable a job title change only on increase types that also involve a job change, such as a promotion.

3. Complete these optional fields:

   • Home Business Unit

   • Ending Date

   • Budget Allocation Percentage

   • Rounding Rule Code

   • Eligibility Table

   • Increase Guidelines table

   • Date to base prorate on

4. Select the Allow prorate factor greater than 1.00 option, and then click OK.

Defining the Approval Hierarchy

You set up the approval hierarchy to specify approval rules for an approval type and to identify who will be the highest authority for giving final approval to the compensation review. This person is usually someone in the human resources department.

This section discusses how to define the approval hierarchy.

Form Used to Define the Approval Hierarchy

Defining the Approval Hierarchy

Access the Approval Hierarchy form.

Note. The system ignores the Level From and Level To fields. A supervisor cannot submit work for approval until the work for all subordinates is submitted. When a supervisor submits a compensation review, all levels of supervisors below the submitting supervisor must have approved it.

Approval Type	Enter a user-defined code (05/AP) that specifies the type of change that requires an approval. For example, the approval type code required to approve a compensation change is COMP.
Highest Authority	Enter the final authority in the approval process. The final authority can be an individual or a department.

Defining Public Models

This sections provides an overview of public models.

Understanding Public Models

If you plan to use public models, you must define them in UDC table 08/PM during setup. These models are visible to all managers in the management chain.

The public model enables higher level supervisors to open the model and view the work. When you save the model as a private model, you are the only person who has access to that model. You use the public model so that higher level managers can make modifications and return the model to the originator. After you have incorporated all of the changes that you want to make, you create a master model. Only a master model can be submitted for approval. You cannot change the master model after you submit it.

See Also

JD Edwards EnterpriseOne Tools 8.98 Foundation Guide

Defining the Performance Appraisal Scale

Organizations often have specific scales for employee performance appraisals. You set up performance appraisal scales to define the scales that are valid for the company.

This section discusses how to define the performance appraisal scale.

Forms Used to Define the Performance Appraisal Scale

Defining the Performance Appraisal Scale

Access the Review Scales form.

1. Complete these fields, click OK, and then click Cancel:

   • Scale

   • Low Value

   • High Value

   • Description

2. On the Work With Scales form, locate and select the record that you just added in the detail area, and then select Define Levels from the Row menu to define the levels for the scale.

3. On the Define Competency Levels form, complete these fields, and then click OK:

   • Low Value

   • High Value

Generating the Employee/Supervisor Relationship Table

This section provides an overview of the employee/supervisor relationship table and discusses how to set processing options for the employee/supervisor relationship build.

Understanding the Employee/Supervisor Relationship Table

Before you open the compensation review process to the managers, you need to build the Employee/Supervisor Relationship Level table (F05840) to generate a list that shows the hierarchy of management above each active employee. This build is based on the information in the Employee Master Information table (F060116). The system deletes any existing records before writing the employee records. One record is written for each manager above the employee. The employee's immediate supervisor is written with a level 1, the supervisor's supervisor is written with a level 2, and so on.

The Employee/Supervisor Relationship Level table does not automatically reflect any changes made to the Employee Master Information table; therefore, you should build it nightly during the time that the compensation review process is open so that the table is always current.

The processing option must be set before you run the program. When a supervisor has given notice or is going to be terminated, you must decide when to remove the supervisor name from the employee/supervisor relationship level table. Use the Days Prior To Termination processing option to specify how many days before termination you want to exclude the supervisor from the table build. Any records for supervisors who have termination dates within the specified time period are not written to the table and are included in the exception report.

Setting Processing Options for the Employee/Supervisor Relationship Build (R05846)

Processing options enable you to specify the default processing for programs and reports.

For programs, you can specify options such as the default values for specific transactions, whether fields appear on a form, and the version of the program that you want to run.

For reports, processing options enable you to specify the information that appears on reports. For example, you set a processing option to include the fiscal year or the number of aging days on a report.

Do not modify JD Edwards EnterpriseOne demo versions, which are identified by ZJDE or XJDE prefixes. Copy these versions or create new versions to change any values, including the version number, version title, prompting options, security, and processing options.

Process

This processing option specifies whether a terminated supervisor is included in the hierarchy that the workfile creates.

Generating Compensation Review Work Tables

This section provides an overview of compensation review work tables and discusses how to set processing options for the compensation review work tables build.

Understanding Compensation Review Work Tables

You run the Compensation Review Work Tables Build program (R08830) to generate a list of the employees who will be reviewed. These work tables give the managers easy access to all of the information that you have set up during their compensation review process. When you build the work tables, the system reviews each employee home company and home business unit to establish the available increase types for the employee organization. For each increase type, the increase type rules specify whether to test for the employee eligibility, calculate prorate factors, determine salary guidelines from the employee performance appraisal, calculate budget allocation, and allow job title change. You can specify whether to globally apply the budget allocation percentages for the increase types as the recommended increase amounts. The recommended increase amounts are the basis for salary planning for the supervisors and can be overridden in the compensation review if you have allowed overrides during setup.

Set the CMPSYNC common setting to Yes to synchronize compensation work tables. When the compensation work tables are synchronized, any changes made to the Employee Master Information table (F060116) are automatically reflected in the compensation work tables.

See Also

Setting Up System Options

Setting Processing Options for the Compensation Review Work Tables Build (R08830)

Processing options enable you to specify the default processing for programs and reports.

For programs, you can specify options such as the default values for specific transactions, whether fields appear on a form, and the version of the program that you want to run.

For reports, processing options enable you to specify the information that appears on reports. For example, you set a processing option to include the fiscal year or the number of aging days on a report.

Do not modify JD Edwards EnterpriseOne demo versions, which are identified by ZJDE or XJDE prefixes. Copy these versions or create new versions to change any values, including the version number, version title, prompting options, security, and processing options.

Default Values

These processing options specify default effective dates for the compensation review work tables.

Edits

These processing options specify whether to apply global increases and whether to clear compensation work tables before building new work tables.

Print Option

This processing option specifies the print format for the Compensation Review Work Tables Build report.