Understanding Salary Plans
This section discusses currency defaults and conversion in salary plans.
Set up each salary plan with a unique ID. The series of grades within all salary plans have the same IDs, such as grades 001 to 010. Similarly, the steps that are within grades have the same IDs, such as Steps 1 through 10. Therefore, the salary plans are similar in terms of structure. However, for each plan, you establish different monetary values for the grade ranges and for the different pay components, amounts, percents, and salary points for the salary steps. In this way, you create unique plans with similar structures but with different compensation.
You then establish default compensation packages by tying the unique salary plans to different locations, job codes, military ranks, or individual workers. These defaults ease the administrative burden both at hire and when a worker has a job change. For example, assume that you hire a worker into a particular grade and step at one location, and then transfer the worker to another location. When you enter the location change, the system automatically assigns the salary plan of the new location to the worker if you are storing salary plans in the Location table. The new salary plan brings with it the same grade and step structure, but the compensation is appropriate to the new location.
You specify a default currency code at each stage in the process of defining salary plans, grades, and step components. The system enters that currency code as the default at the next stage, which you can change. Define grades and steps in multiple currencies to accommodate the organization's needs.
The system performs compensation frequency conversion in the currency that is specified for the rate code. When the system totals the step components and validates the grade ranges, it converts all compensation rates to the currency of the grade.
The following table summarizes the source of the currency code default and the use of the currency code in calculations:
|
Salary Plan Level and Page |
Source of Default Currency Code |
Use in Calculations |
|---|---|---|
|
Salary Plan. Salary Plan Table setup page. |
The currency code that you select for the organization on the Installation table. |
None (for defaults only). |
|
Salary Grade. Salary Grade Table setup page. |
The currency code that you select for the salary plan on the Salary Plan table. |
On the Salary Grade Table page, the system displays the salary ranges in the currency of the grade for each frequency. |
|
Salary Step. Salary Step Components setup page. |
The currency code that you select for the salary grade on the Salary Grade table. |
On the Salary Step Components page, the system displays the total compensation in the currency of the step for each frequency. |
|
Salary Step Component. In the grid on the Salary Step Components setup page. |
The currency that you define for the rate code on the Comp Rate Code table. |
On the Salary Step Components page, the system displays the compensation rate for the rate code in this currency for each frequency. |