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

*