PeopleSoft Enterprise Human Resources 9.1 PeopleBook: Manage Variable Compensation

Setting Up Data Elements

This chapter provides an overview on setting up data elements and describes how to:

Define payout formulas.
Define valuation.
Define goals.
Set up eligibility proration tables.

Understanding Data Element Setup

Before you set up your variable compensation plans, you must define some of the data elements that you'll use to define the specifics of each plan. Some of the variable compensation data elements are optional and some are required, depending on the plan type, options, and business rules that you define for the plan.

This table describes the usage of the data elements by the various plan types:

Data Element	Plan Types That Use This Data Element
Payout Formula	Required for all plans except those with Ad Hoc Award as the plan member rule.
Valuations	Required for non-monetary and stock plans only.
Goals	Required when the plan type is Goal Sharing and for any other plan that you administer using goals.
Proration periods	Required for plans that specify Calculate Proration as a plan business rule.
Workday Rules	Required for the Workday Schedule method of calculating eligibility proration.
Proration Percentage Rule	Required for the Proration Percentage method of calculating eligibility proration.

Defining Payout Formulas

To define payout formulas, use the Payout Formulas component (VC_PAYOUT_FORMULA).

Construct SQL statements and assign them a payout formula ID on the Payout Formulas page. Select from the payout formula IDs when you set up target, minimum, and maximum payouts for workers, groups, or plans, or when you set up a matrix goal payout schedule.

The payout formula that you define can be a flat amount or a complex SQL statement based primarily on the worker's Job record.

Page Used to Define Payout Formulas

Page Name	Definition Name	Navigation	Usage
Payout Formulas	VC_PAYFORM_TBL	Set Up HRMS, Product Related, Compensation, Variable Compensation, Payout Formulas, Payout Formulas	Define a formula for the Determine Allocation and Calculate Awards processes to use to calculate funding and award allocations. The payout formula is a SQL statement that you define on this page.

Creating a Payout Formula

Access the Payout Formulas page (Set Up HRMS, Product Related, Compensation, Variable Compensation, Payout Formulas, Payout Formulas).

Payout Formula Criteria

Pay Formula SQL

When you save the record, the system displays the payout formula SQL statement that you define using the following fields. The system checks the syntax of the SQL statement and lists any errors.

Rounding Rule

Select a rule to apply to award calculations that use this payout formula. Select from:

Down: Round the value down to the number of significant digits indicated in the Decimal Places field.
Standard: Use the standard IEEE (Institute of Electrical and Electronics Engineers) rounding rules.
Up: Round the value up to the number of significant digits indicated in the Decimal Places field.

If the plan is a stock-type plan, the system uses the rounding rules established on the Stock Option Plan table (ST_OPTION_PLAN) when rounding award calculations.

Decimal Places

Enter the number of decimal places to which you want the system to round the payout formula.

Payout Formula Details

Sequence

(Required) This number determines the order in which the SQL generator builds the formula. Entering sequence numbers in increments of 5 or 10 gives you room to add a component to the formula without renumbering all the existing components. When you save the page, the system sorts your components according to their sequence numbers.

Insert a new row and enter a sequence number for each component of the SQL statement while you build it.

Operand

Enter an operand for the component. The operand that you select determines the other fields that are hidden or displayed on the page. This table lists the valid operand values and the additional fields displayed for each:

Operand	Definition	Additional Fields that Appear
(none)	Use this value to eliminate the field of an unwanted value.	None
-	Subtract	None
(	Open Bracket	None
)	Close Bracket	None
*	Multiply	None
/	Divide	None
+	Add	None
Constant	Fixed value	Value/Rec/Rate Code
Rate Code	Refers to a Rate Code that you specify from the Rate Code table.	Value/Rec/Rate Code
Rec. Field	Refers to a field that you specify from a record.	Value/Rec/Rate Code and Field Name

Value/Rec/Rate Code

The value that you enter here depends on the operand that you select. This is a summary of the relationship between the operand and the Value/Rec/Rate code.

Operand Selected	Value/Rec/Rate Code
Constant	Enter a fixed amount. This value can be a percent or other fixed value to be used in the calculation. For non-monetary plans, enter the number of units to be awarded to each plan member.
Rate Code	Enter a rate code from the Rate Code table.
Rec. Field	Select a record from these options: EMPLOYMENT, JOB, PERSONAL_DATA, and SAL_GRADE_TBL.

Field Name

Select from the available options for the record that you selected. When the system runs the SQL statement, it uses the value of the selected field in the plan member's record.

Payout Formula Example

To define a payout formula of 1 percent of the worker's job annual rate, select the Job record, the Annual Rate field name (on the Job record), the operator *, and the constant .01. Place the formula in parentheses so that the final formula in the Pay Formula SQL field is (JOB.ANNUAL_RT * 0.01).

Defining Valuation

To define valuation, use the Valuations component (VC_VALUATION).

For non-monetary plans and stock plans, set up a valuation ID on the Valuations page. Assign a value to the valuation ID, which represents the value of one unit of the award under the plan (expressed in the currency that you specify). If you change the value of a valuation ID, the system uses the value on the Valuation ID maximum effective-dated row that is equal to or less than the payout period end date.

When the system reports the value of awards under a non-monetary plan or stock plan, it calculates the value by multiplying the number of units awarded to the member (determined by the payout formula and other factors) by the value per unit as defined by the valuation ID. Depending on the plan's business rules, the award value attributed to the worker's compensation package might be reduce d by a proration factor, performance factor, or adjustment factor.

Because of the nature of stock prices, the stock value calculated in this way is used for variable compensation reporting only, because it might not reflect the true value of the stock options at a particular time.

For non-monetary-type plans, the value calculated with the valuation ID is used for payroll tax reporting, as well as data reporting through the Variable Compensation and Total Compensation business processes.

Page Used to Define Valuation

Page Name	Definition Name	Navigation	Usage
Valuations	VC_VALUATION	Set Up HRMS, Product Related, Compensation, Variable Compensation, Valuations, Valuations	Define units of non-monetary and stock awards and assign a currency value for one unit. This page is required only if you set up non-monetary or stock variable compensation (VC) plans.

Creating a Valuation Definition

Access the Valuations page (Set Up HRMS, Product Related, Compensation, Variable Compensation, Valuations, Valuations).

Effective Date

Enter the effective date of the value that you are entering for the valuation ID.

If you change the value of the valuation ID, the system uses the monetary value associated with the valuation ID on the maximum effective-dated row that is equal to or less than the payout period end date.

Amount

Enter the monetary value of one unit of the non-monetary award represented by this valuation ID. For example, enter the monetary value of one holiday turkey. For stock-type plans, one unit is one option or share.

Currency Code

Select the code for the currency in which to administer an award for this valuation ID. When you assign the valuation ID to a VC plan, the currency code of the valuation ID must match the currency code of the plan.

You can override the default value that the system enters.

Defining Goals

To define goals, use the Goals component (VC_GOAL_TBL). Use the CI_VC_GOAL_TBL component interface to load data into the table for this component.

Use goals that you name and describe on the Goals page to set up a plan with either weighted goals or a goals matrix.

Goals are not an option if the plan member rule is Ad Hoc Award.

Page Used to Define Goals

Page Name	Definition Name	Navigation	Usage
Goals	VC_GOAL_TBL	Set Up HRMS, Product Related, Compensation, Variable Compensation, Goals, Goals	Name and describe generic goals to use with variable compensation (VC) plans. Use the goals that you define here when you set up weighted goals or matrix goals for a VC plan. You do not need this page if you do not administer plans with goals.

Page Name

Definition Name

Navigation

Usage

Goals

VC_GOAL_TBL

Set Up HRMS, Product Related, Compensation, Variable Compensation, Goals, Goals

Name and describe generic goals to use with variable compensation (VC) plans. Use the goals that you define here when you set up weighted goals or matrix goals for a VC plan.

You do not need this page if you do not administer plans with goals.

Setting Up Eligibility Proration Tables

To set up proration tables, use the Workday Schedules (VC_WORK_DY_SCHED), Percentage Proration Rules (VC_PRORATE_RULE), and Prorate Periods (VC_PRORATE_PRD) components.

This section discusses how to:

Set up workday rules.
Set up proration percentage rules.
Define proration periods.

Pages Used to Set Up Eligibility Proration Tables

Page Name	Definition Name	Navigation	Usage
Workday Schedule	VC_WRK_DY_SCHED	Set Up HRMS, Product Related, Compensation, Variable Compensation, Workday Schedules, Workday Schedule	Set up workday rules in which you create schedules assigning a factor to each day of the week (Sunday through Saturday).
Percentage Proration Rules	VC_PRORATE_TBL	Set Up HRMS, Product Related, Compensation, Variable Compensation, Percentage Proration Rules, Percentage Proration Rules	Define ranges of eligible days and associate a percentage with each range.
Prorate Periods	VC_PRORATE_PRD	Set Up HRMS, Product Related, Compensation, Variable Compensation, Prorate Periods, Prorate Periods Compensation, Variable Compensation, Maintain Plan, Prorate Periods, Prorate Periods	Define proration frequency parameters for the payout periods of a prorated plan. The Determine Eligibility/Proration process evaluates eligibility as of the proration period end dates generated on this page.

Setting Up Workday Rules

Access the Workday Schedule page (Set Up HRMS, Product Related, Compensation, Variable Compensation, Workday Schedules, Workday Schedule).

Factor

Enter the factor for each day. For example, you could assign a factor of 1 for a full working day, .5 for a half day, and 0 for a holiday.

Setting Up Proration Percentage Rules

Access the Percentage Proration Rules page (Set Up HRMS, Product Related, Compensation, Variable Compensation, Percentage Proration Rules, Percentage Proration Rules).

Define a lookup table that the system uses to determine the worker's proration factor based on the number of eligible days in the period.

Eligible Status

You can define separate proration rate schedules for Active and Terminated workers under each prorate % ID. Select whether this proration rate schedule applies to workers who are Active or Terminated at the end of the payout period.

Terminated status includes these worker status values on the Job record: Deceased, Retired, Retired with Pay, Terminated, and Terminated with Pay.

If you do not define a proration rate schedule with a value of Terminated in the Eligible Status field, the system assigns a proration factor of 0 to workers with these termination worker status values in their Job records.

All other worker status values on the Job record are associated with the Active value in this field.

Eligible Days

Enter the ending number in the eligible days range. For example, if the range is 1–15 days, enter 15.

Proration Percentage

Associate a proration factor, expressed as a percentage, with the eligible days range. This is the proration factor used by the Calculate Awards process if the worker's eligible days for the period falls into this eligible days range.

Define a date range and assign a proration percentage of 0 if you want to exclude workers who are not eligible in the first portion of the period. For example, you can exclude workers who were not eligible in the first 21 days of the period by setting up an eligible days range that ends in 21 and associating 0 as the proration percentage.

Defining Proration Periods

Prorate periods are subsets of the plan payout period. Prorate periods can have daily, weekly, or monthly frequency. Daily frequency is the most accurate, but the processing time is greater.

Note. You must set up the variable compensation plan and its payout periods before you can define the proration periods.

Access the Prorate Periods page (Set Up HRMS, Product Related, Compensation, Variable Compensation, Prorate Periods, Prorate Periods).

Period ID

Select a payout period from the available options. The system prompts you with values from the VC_PAYPRD_TBL. The list does not include payout periods for which an award has been finalized, canceled, or manually entered. In other words, if the Award Status on the Allocate Awards page is other than Initial Calculation for any award in the plan, or if any award was manually allocated, that payout period is not available.

The system displays the payout period begin and period end dates that you defined on the Plan Payout Periods page.

Proration Freq (proration frequency)

Select a proration frequency from these values:

By Workdays (daily frequency): The Workday Rule ID field appears.

Calendar Days (daily frequency): The Prorate % ID field appears.

Monthly: The Date Ind field appears.

Weekly: The Day field appears.

Workday Rule ID

If you select By Workdays as proration frequency, you must select a workday rule. The maximum number of eligible days defined in the rule you select must not be less than the number of days in the payout period.

Prorate % ID

This field appears if you select Calendar Days in the Proration Freq field.

If you use the proration percentage calculation method, select a prorate percentage ID to associate a prorate percentage schedule with the plan for the payout period.

If you use the daily calculation method without proration percentages, leave this field blank.

Day

If you select Weekly as the proration frequency, you must select the day of the week as of which you want the system to calculate the proration. Values are the seven days of the week (Sunday through Saturday).

Date Ind (date indicator)

If you select Monthly proration frequency, select a date indicator in this field. Values include:

End of Month: The system calculates eligibility as of the end of each month.

Day of Month: The Day of Mon field appears.

Day of Mon (day of the month)

Enter the number of the day of the month as of which you want the system to calculate eligibility. Select any number from 1 through 28. Set theDate Ind field to End of Month if you select a number higher than 28.

End Date

After you define the proration frequency, the system displays the end date here for each proration period within the payout period that you specified.

Run Status

The system selects this check box when the Determine Eligibility/Proration process completes the eligibility calculation for the corresponding proration period.

Period ID	Select a payout period from the available options. The system prompts you with values from the VC_PAYPRD_TBL. The list does not include payout periods for which an award has been finalized, canceled, or manually entered. In other words, if the Award Status on the Allocate Awards page is other than Initial Calculation for any award in the plan, or if any award was manually allocated, that payout period is not available. The system displays the payout period begin and period end dates that you defined on the Plan Payout Periods page.
Proration Freq (proration frequency)	Select a proration frequency from these values: By Workdays (daily frequency): The Workday Rule ID field appears. Calendar Days (daily frequency): The Prorate % ID field appears. Monthly: The Date Ind field appears. Weekly: The Day field appears.
Workday Rule ID	If you select By Workdays as proration frequency, you must select a workday rule. The maximum number of eligible days defined in the rule you select must not be less than the number of days in the payout period.
Prorate % ID	This field appears if you select Calendar Days in the Proration Freq field. If you use the proration percentage calculation method, select a prorate percentage ID to associate a prorate percentage schedule with the plan for the payout period. If you use the daily calculation method without proration percentages, leave this field blank.
Day	If you select Weekly as the proration frequency, you must select the day of the week as of which you want the system to calculate the proration. Values are the seven days of the week (Sunday through Saturday).
Date Ind (date indicator)	If you select Monthly proration frequency, select a date indicator in this field. Values include: End of Month: The system calculates eligibility as of the end of each month. Day of Month: The Day of Mon field appears.
Day of Mon (day of the month)	Enter the number of the day of the month as of which you want the system to calculate eligibility. Select any number from 1 through 28. Set theDate Ind field to End of Month if you select a number higher than 28.
End Date	After you define the proration frequency, the system displays the end date here for each proration period within the payout period that you specified.
Run Status	The system selects this check box when the Determine Eligibility/Proration process completes the eligibility calculation for the corresponding proration period.