(FRA) Forecasting Salaries for France

This chapter provides overviews of salary forecasting and technical details, lists common elements, and discusses how to:

• Define periods.

• Set up events.

• Define scenarios.

• Forecast compensation.

• Purge scenario history.

• View scenario history.

Understanding Salary Forecasting

Use Salary Forecasting, a French-specific business process, as an analysis tool or as a forecasting tool. Either analyze the changes in compensation for a group of workers in past periods or simulate how hypothetical events occurring in the future will affect compensation. Because you can see how various events affect your compensation package, this business process is useful for human resources managers or executives wanting to build compensation budgets.

Salary Forecasting is compliant with the rules of the French Analysis Method for compensation variations, called La Masse Salariale. The analysis method that the business process employs enables you to calculate independently the effects of any compensation decisions for a group of workers for a future time period. The reports provided are also in accordance with La Masse Salariale.

The steps for using the Salary Forecasting business process are:

1. Set up your data.

2. Run the calculations.

3. Run and view the reports.

See Also

PeopleSoft HCM Reports: Selected Reports

Setting Up Salary Forecasting

If you use the Salary Forecasting business process for forecasting purposes, then set up events for modeling the future compensation.

If you use the business process for comparison of two past periods, then do not set up any events. Note that the calculation process ignores events defined in past periods.

Complete these steps to set up salary forecasting:

1. Define, one at a time, two like periods of time.

   These time periods can be past, current, or future. Usually, you compare two equivalent periods of time, referred to as the reference and the analysis periods.

2. Associate the periods for comparison or forecasting.

3. Define groups, if they are not already created.

   Define worker groups using the Group Build module. Each person defined in a group used in the Salary Forecasting business process must have, in his or her compensation package, rate codes attached to a rate code class. Use the rate codes without rate code class report to verify.

4. Define the various events that you want to apply to the worker groups whose compensation you want to analyze and forecast.

   The events can be of various types, as described in the next section. You might also define additional setup data such as proration rules or specific hours rate.

5. Ensure all events for one scenario have the same elementary period.

6. (Optional) Define your proration rules.

7. (Optional) Define your rates for hours worked.

8. Group events into a scenario.

   At the scenario level, define a set of events to apply to groups of workers for a given time period.

See Also

Understanding Technical Details

Understanding Technical Details

This section discusses technical details for:

• Compensation effects.

• Categorization of events.

Technical Details: Compensation Effects

The following topics describe the effects in La Masse Salariale method of analysis.

Level Effect

Any compensation measure that increases the level of compensation as of a certain date has a level effect. Any compensation increase of the elements of base pay has a level effect.

Mass Effect

Any compensation increase, either an increase in base compensation or any type of variable compensation, has a mass effect. It affects the average compensation for the period and population being considered.

Considering any given period of time and any compensation measure that has a level effect, the sooner in the period the measure is applied, the greater the mass effect for that measure.

Carry Over Effect

The carry over effect represents the effect on a given period of all the measures taken during the previous period. For any compensation measure that has a level effect, the later this measure is applied in a given time period, the bigger the carry over effect on the next time period.

Average Compensation for Employees in Place

The overall compensation for an organization could change between two consecutive periods for several reasons:

• Compensation increases given to a subgroup or to the entire organization.

• Seniority changes due to the overall aging of the population.

• Hires and departures within the organization.

• Moves within the organization that trigger changes in compensation, such as promotions.

Average compensation for employees in place (ACEP) is the average compensation for the subset of people within the organization during two consecutive time periods.

Headcount Effect

The headcount effect is the variance of the headcount multiplied by the variance of the average compensation.

Structure Effect

The structure effect is the variance in the overall compensation due to internal moves within the organization.

Noria Effect

The Noria effect is defined as the consequence of changes in compensation due to hiring and departures. Often, the salaries of the newly hired are below those of workers who have been at the same job longer. The Noria effect tracks the differences.

Overall Variance of Compensation Between Two Time Periods

The calculation is as follows:

ACEP variance + Headcount effect + Structure Effect + Noria Effect

All variances and effects are expressed in percentages (refer to Report LMS001).

Technical Details: Categorization of Events

All events are classified in predefined categories by the Forecast Compensation module calculation process. Those categories are the ones commonly used for La Masse Salariale analysis. The category codes and descriptions are delivered as system data.

This table displays La Masse Salariale categorization and the corresponding category codes that are used by the calculation process to map the events defined at the scenario level with the categories:

The following matrix displays which events affect which categories.

Common Elements Used in This Chapter

Defining Periods

To set up periods, use the Period Setup panel (LMS_PERIOD_PNLGP_GBL) and Working period setup panel (LMS_WRK_PD_PNLGP_GBL) components.

This section discusses how to associate contiguous working periods.

Pages Used to Define Periods

Associating Contiguous Working Periods

Access the Working Periods page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Working period setup panel, Working Periods).

Reference Period	For forecasting, select the current period—Month, Quarter, Semester or Year—depending on what period type you selected on the Period Setup panel page. For comparing past periods, select any past period.
Analysis Period	For forecasting, this value must be a future period contiguous with the reference period, and of the proper length for the period type. For comparing past periods, select any past period contiguous with the reference period. The system ensures that the reference and analysis periods do not overlap, that they are contiguous, and that they are of the same type.

Setting Up Events

To set up events, use the Headcount increase setup panel (LMS_ENTRIES_EVENT_GBL), Incentive event setup panel (LMS_INCENT_EVENT_GBL), Salary Increase event setup (LMS_INCREASE_EVENT_GBL), Headcount decrease event setup (LMS_LEAVES_EVENT_GBL), Promotion event setup panel (LMS_PROMO_EVENT_GBL), Seniority Setup panel (LMS_SENIOR_EVENT_GBL), Working Schedule event setup (LMS_SCHEDULE_EVENT_GBL), Proration setup panel (LMS_PRORATION_GBL), and Hours rate setup panel (LMS_HOURS_RATE_GBL) components.

An event is an action (or a set of actions) applied to a group of workers. Events are the building blocks of your scenarios. You define and reuse events in many scenarios as long as the scenarios apply to the same set of time periods. This section discusses how to:

• Simulate a headcount increase.

  Add workers to any group (by job code or position) to simulate hiring or to study the effects of proposed organizational changes.

• Simulate future awards.

  This simulation enables you to see the effect of awarding a lump sum amount at a specific point in time. The incentive event is simplistic here because the Variable Compensation module offers a more complex simulation. The Variable Compensation module enables you to perform different scenarios to determine the maximum, target, and minimum awards for a group of workers based on a given plan of specific business rules.

• Simulate a compensation increase event.

• Simulate a headcount decrease.

• Simulate a promotion.

  A promotion is defined as a move from one Job Code to another Job Code.

• Simulate seniority.

  This simulation shows the effect of seniority increases.

• Define a working schedule.

  A working schedules event determines the effect of changing the working schedule for a group of workers.

• Define proration rules.

• Define hours rates.

See Also

Understanding Variable Compensation

Pages Used to Set Up Events

Simulating Headcount Increase

Access the Headcount Increases page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Headcount increase setup panel, Headcount Increases).

Headcount Increase Type	Select how you want the calculations to consider the increase: Avg Amnt (average amount): When you select Avg Amnt, these fields appear: Average Amount, Currency, Frequency. Enter a free compensation amount, which is multiplied by the number of people selected. Use this type of headcount increase to perform an estimated simulation. JobCode: Select this option and the SetID and Forecasted Job fields appear. Use this option to add many people with the same job code. The calculation uses the compensation package defined for the specified job code and multiplies it by the number of people selected for the simulation. Note. Only those job codes that are not associated with a matrix are available. Position: Select this option and the Forecasted Positions field appears. The calculation uses the compensation package defined for the job code associated with the specified position and multiplies it by the number of people selected for the simulation.
Structure Effect	Refer to the Understanding Technical Details topic for the definition of the structure effect. To measure the structure effect, assign your headcount increase to a group. See Understanding Technical Details.
Number of People	Enter the number that represents the headcount increase.
Simulation Parameters	Click to enter additional simulation parameters for the calculation process.
Average Amount	When Headcount Increase Type is Avg Amnt, specify the average amount of the salaries for all people added, based on the frequency specified. For example, five new people get 5000.00 EUR (1000.00 EUR each) every other week, so the frequency is bi-weekly. You would enter 1000 in the Avg Amnt field.
Currency	When Headcount Increase Type is Avg Amnt, select the currency that the calculation process uses.
Frequency	When Headcount Increase Type is Avg Amnt, specify how often the new people are to be paid. During the calculation process, the frequency is converted to match the elementary period type. For example, the elementary period type is monthly, and you enter five new people who get 1000.00 EUR weekly. The system calculates 5000.00 EUR weekly, and then converts it to a monthly frequency using the frequency annualization factor. The monthly figure is 20000.00 EUR. The calculation process adds 20000.00 EUR every month, starting with the triggering period defined for this event. Frequency values come from the Frequency table.
SetID	When Headcount Increase Type is JobCode, specify the setID for the job code for the new hires. These values come from the SetID table.
Forecasted Job	When Headcount Increase Type is JobCode, specify a forecasted job for the new hires. Each job code must have its own event. These values come from the Job Code table.
Forecasted Positions	When Headcount Increase Type is Position, specify a forecasted position for the new hires.

Simulating Future Awards

Access the Incentives page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Incentive event setup panel, Incentives).

Number of People	Enter the number of people who receive a lump sum incentive award.
Average Amount	Enter the average amount each person is to receive. For example, if you select 5 for the number of people and 500 for the average amount, the calculation adds 5 times 500.00 EUR, or 2500.00 EUR, to the triggering period.
Structure Effect	Enter the Group ID to receive this award. Refer to the Understanding Technical Details topic for information about the structure effect. See Understanding Technical Details.

Simulating a Compensation Increase Event

Access the Compensation Increases page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Salary Increase event setup, Compensation Increases).

Individual Measure

Select if the increase is an individual measure. This check box relates to La Masse Salariale method of analysis. It classifies compensation increases into three categories: general increases (applies to the overall simulated population); increases by category (a category being a subset of the overall simulated population); and individual measure (the compensation increase is an increase for an individual). To simulate general increases, deselect this check box. See Administering Salary Plans, Grades, and Steps.

Compensation Increase Rate Codes

Define the rate codes to be increased. All people in a group with a compensation package containing specified compensation rate codes receive the increase that is specified on this page as of the triggering period of this event. Select the way to change a person's compensation for a given rate code from these choices: Percent Amount, Change Amount, Change Percent, Change Points, Percent of Points, Currency, and Rate Code Class. Specify any components of pay and any increases. Depending on the component type, fill in the fields as follows. (Fields not related to certain component types are unavailable for selection.) If the component type is flat amount or hourly, enter either a Percent Amount or a Change Amount. If the component type is percentage, enter only a Change Percent. If the component type is points, enter either a Percent of Points or a Change Points.

Simulating a Headcount Decrease

Access the Headcount Decreases page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Headcount decrease event setup, Headcount Decreases).

Description

Enter a description of the headcount decrease event. Specify the group to which this event applies on the Scenario Definition page. For example, if five workers retire as of the date specified by the triggering period, create a group that includes those five workers. At the scenario level, attach this group to the headcount decrease event.

Simulating a Promotion

Access the Promotions page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Promotion event setup panel, Promotions).

From	Enter values in the SetID and Job Code fields for a group's current position.
To	Enter values in the SetID and Job Code fields for a group's promoted position.

Simulating Seniority

Access the Seniority page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Seniority Setup panel, Seniority).

Seniority Calculation Freq (seniority calculation frequency)

Enter either Monthly or Semimonthly for seniority pay. At the event level, define the frequency of seniority calculation; that is, how often seniority is evaluated.

Defining a Working Schedule

Access the Working Schedule page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Working Schedule event setup, Working Schedule).

Standard Hours	Enter the number of standard hours per frequency period. For example, 35 hours is standard hours for a weekly frequency. To simulate the effect of a group of people moving from 39 to 35 hours, enter the target frequency (35 hours a week) in this field. The group of people that will change its working schedule is defined at the scenario level.
Frequency	Enter the frequency of the standard hours that you select.

Defining Proration Rules

Access the Proration setup panel page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Proration setup panel, Proration setup panel).

Time Period ID	The system displays the Time Period ID that you entered.
Period Type	The system displays a period type of either Monthly or Semi-Monthly.
Type of Elementary Period	Depending on the combination of period type and type of elementary period that you selected, the system displays fields that enable you to rate how to pay per elementary period.
12 Months	Select to weigh each month equally.
13 Months	Select to weigh one month out of a year twice.
14 Months	Select to weigh one month out of a year three times.
15 Months	Select to weigh one month out of a year four times. The system calculates all the ratios, but you can modify them. For instance, if you select 13 Months, you could weight December twice (default calculation) or half-weight June and December. In this case, you would overwrite the default ratios.

Defining Hours Rates

Access the Hours rate setup panel page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Hours rate setup panel, Hours rate setup panel).

Hours Rate Effective Date	Enter the date these rates are effective.
Sequence	These numbers represent the sequence of counting hours. They are automatically generated.
From and To	Enter the first and last number in the range of hours. The first sequence must begin with 0.
Frequency	Enter the valid frequency for this range of hours.
Rate (%)	Enter the percentage rate for each sequence.

Defining Scenarios

To define scenarios, use the Scenario setup panel (LMS_SCENARIO_GBL) component.

This section discusses how to:

• Associate events with a scenario.

• Assess the structure effect.

Pages Used to Define Scenarios

Associating Events with a Scenario

Access the Scenario Definition page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Scenario setup panel, Scenario Definition).

Group ID	Enter a value for this scenario. The group could be your whole organization. For calculation performance reasons, create a smaller group that represents your organization in compensation terms or create a group from a certain department.
Working Periods ID	When you select a working periods ID and press TAB to move out of the field, the system displays all events applicable for that working periods ID. For certain events, you can limit the population for the event by selecting a Group ID. Note that Scenario KFSCEN01 applies to all the workers in Group ID KF0006.
Scenario Events	All the events defined for this working period ID appear. Each event is listed by Event ID, Triggering Period, and Description. To include the events in calculations, select the corresponding check box. Click the Detail link to go to the Event Definition page to make adjustments to an event. Click the Def. link to go to the Group Definition page and modify a group. Use the Group ID fields to restrict an event to a subset of the group that is defined in the previous Group ID field. Restrict the population for the following types of events: headcount decrease, promotion, seniority, working schedule. The headcount increase and incentives events do not need a subgroup.

Note. For a compensation increase event, the population to consider is all the workers from the main group (the one defined in the Group ID field at the scenario level) who have, in their compensation package, the compensation rate codes defined in the event.

Assessing the Structure Effect

Access the Structure Effect page (Set Up HRMS, Product Related, Compensation, Forecast Compensation FRA, Scenario setup panel, Structure Effect).

Scenario Structure Effect Groups

Define a subgroup of your overall population, which you defined in the first Group ID field on the Scenario Definition page. Enter groups forming a subset of your overall population. Ensure that the groups do not overlap and that the sum of their populations exactly equals the overall population. For example, organization ABC has several categories of workers: executives, managers, and workers. You want to study how the compensation is changing due to the movement of people from one category to another. The Salary Forecasting module calculates it automatically: Define your overall organization as being all workers in ABC. Then, define three groups to enter on the Scenario Structure Effect page: Group 1 is all executives from ABC, Group 2 is all managers from ABC, and Group 3 is all workers from ABC. Groups 1, 2, 3 do not overlap, and their sum equals the overall population of organization ABC.

See Also

Technical Details: Compensation Effects

Forecasting Compensation

This section provides an overview of compensation forecasting and discusses how to:

• Forecast compensation

• Run a compensation simulation

• Run the Scenario Comparison report

Understanding Compensation Forecasting,

The calculation process divides both the reference period and the analysis period into sections by considering the elementary period type. For each elementary period, the process extracts from the HR database the base compensation (from the PS_COMPENSATION table) and the variable compensation (from PS_VC_AWARDS) for all the workers in the group specified at the scenario level. It also calculates the average headcount and full-time equivalents (FTEs) for each elementary period to create average compensation amounts.

This calculation process considers all the events defined for future elementary periods and calculates forecasted compensation. Any event defined for past or current elementary periods is not considered because data exists for those periods of time in the HR database.

The forecasted compensation amounts are stored in salary forecasting tables so that you can compare the results of several scenarios. Remember that the salary forecasting process does not update core HR transaction tables.

Pages Used to Forecast Compensation

Forecasting Compensation

Access the Forecast Compensation page (Compensation, Forecast Compensation FRA, Process Forecast, Forecast Compensation, Forecast Compensation).

Scenario ID	Select a scenario ID.
Scenario Definition	Click to go to the Scenario Definition page of the selected scenario ID.
Fixed Exchange Rate	Select if this currency has a fixed exchange rate.
Re-Extraction	Select if this process is re-extracting the base compensation from the Human Resource database.
Structure Effect	Select if the variance in the overall compensation is due to internal moves within the organization.
Rate Type	Select a compensation rate type.
Carry-Over Factor	The carry over effect represents the impact on a given period of all the measures taken during the previous period. Indicate what will be carried over to the next period.

Running a Compensation Simulation

Access the Forecasted Compensation Rpt page (Compensation, Forecast Compensation FRA, Process Forecast, Forecasted Compensation Rpt, Forecasted Compensation Rpt).

Select a User ID and a Run Control ID, then click the Refresh button. Refreshing populates the Scenario History Report group box. Select the check box for the Scenario ID you want to report on and click Run.

See Also

Technical Details: Compensation Effects

Running the Scenario Comparison Report

Access the Scenario Comparison Rpt page (Compensation, Forecast Compensation FRA, Process Forecast, Scenario Comparison Rpt, Scenario Comparison Rpt).

Scenario Filter	This group box enables you to narrow the choice of scenarios to report by User ID and Run Control ID.
	Click to display scenarios that meet the scenario filter requirements.
Scenario History Report	This group box displays all scenarios that meet the scenario filter requirements. Scenarios are listed by Scenario ID, Scenario Run DateTime, User ID, Run Control ID, and Description. To run one scenario at a time, select its check box.

Purging Scenario History

All the results from of the calculation of any scenario are stored in the database. Define several scenarios with different sets of events, run the calculation for all scenarios, and compare the results. Then, select the scenario that best mirrors your compensation policy. You may then purge from the database the results of some scenario calculations you are not going to use. When you purge scenario history, the calculation results are purged but not the scenario definition.

Page Used to Purge Scenario History

Deleting Scenario Results

Access the Purge Scenario History page (Compensation, Forecast Compensation FRA, Process Forecast, Purge Scenario History).

Scenario Filter	This group box identifies the User ID and Run Control IDs by which to search. To search all histories, click the lightning icon.
Scenario History Purge	Chose a scenario to purge by selecting the Purge check box. Note that only the results of the scenario calculation are purged; the scenario definition remains in the database. Information appears in all fields here.

Click Run to run this request. PeopleSoft Process Scheduler runs the Purge Scenario History process at user-defined intervals.

Viewing Scenario History

Perform forecasting activities in two ways:

• Define different scenario IDs, attach a different set of events to them, and run the calculation process for each scenario ID.

• Define only one scenario ID and change the events associated with this scenario ID each time that you process a new calculation.

Use the Scenario History pages to find which events were used for any scenario calculation. Modify and calculate a scenario repeatedly without recalling the events that were used in each calculation.

Pages Used to View Scenario History