Understanding Technical Details
This section discusses technical details for:
Compensation effects.
Categorization of events.
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).
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:
Category |
Category Code |
---|---|
General Increases |
C20 |
General Increases given as a percentage |
C21 |
General Increases given as a Amount or Points changes |
C22 |
Measures by Category |
C30 |
Bonus |
C40 |
Regular Bonus |
C41 |
Exceptional Bonus |
C42 |
Individual Measures |
C50 |
Seniority |
C51 |
Shift-Technicality |
C52 |
Activity |
C53 |
The following matrix displays which events affect which categories.
Event |
Category/ Rate Code Class |
C 20 |
C 21 |
C 22 |
C 30 |
C 40 |
C 41 |
---|---|---|---|---|---|---|---|
Leave |
|
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
Promotion |
Base Pay |
|
|
|
|
|
|
|
Reg Bonus |
|
|
|
|
* |
* |
|
Seniority Bonus |
|
|
|
|
|
|
Salary Increase |
Base Pay |
* |
* |
* |
* |
|
|
|
Reg Bonus |
|
|
|
|
* |
* |
|
Seniority Bonus |
|
|
|
|
|
|
Seniority |
Seniority Bonus |
|
|
|
|
|
|
Working Schedule |
Base Pay |
|
|
|
|
|
|
|
Reg Bonus |
|
|
|
|
* |
* |
|
Seniority Bonus |
|
|
|
|
|
|
Entry |
|
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
Incentive |
N/A |
|
|
|
|
* |
|
Event |
Category/ Rate Code Class |
C 42 |
C 50 |
C 51 |
C 52 |
C 53 |
---|---|---|---|---|---|---|
Leave |
|
N/A |
N/A |
N/A |
N/A |
N/A |
Promotion |
Base Pay |
|
* |
|
* |
|
|
Reg Bonus |
|
|
|
|
|
|
Seniority Bonus |
|
* |
* |
|
|
Salary Increase |
Base Pay |
|
* |
|
* |
|
|
Reg Bonus |
|
|
|
|
|
|
Seniority Bonus |
|
* |
* |
|
|
Seniority |
Seniority Bonus |
|
* |
* |
|
|
Working Schedule |
Base Pay |
|
* |
|
|
* |
|
Reg Bonus |
|
|
|
|
|
|
Seniority Bonus |
|
* |
* |
|
|
Entry |
|
N/A |
N/A |
N/A |
N/A |
N/A |
Incentive |
N/A |
* |
|
|
|
|