3Workforce Structures

This chapter contains the following:

You can review and revise the initial setup if there are changes in your enterprise structure. As a part of this activity, you can add or revise workforce structures. For example, you may add new departments, create jobs, or revise rates for grades. You add and edit workforce structures using the Workforce Structures work area.

  • Departments

  • Divisions

  • Disability organizations

  • Organization trees

  • Department trees

  • Locations

  • Jobs

  • Positions

  • Grades

  • Grade rates

  • Grade ladders

Although you create payroll statutory units, legal employers, and tax reporting units from the Manage Legal Entity task in the Setup and Maintenance work area, you can revise them using the Manage Legal Entity HCM Information task in the Workforce Structures work ares.

Departments, Divisions, and Organizations

Oracle Fusion Applications have been designed to ensure your enterprise can be modeled to meet legal and management objectives. The decisions about your implementation of Oracle Fusion Applications are affected by your:

  • Industry

  • Business unit requirements for autonomy

  • Business and accounting policies

  • Business functions performed by business units and optionally, centralized in shared service centers

  • Locations of facilities

Every enterprise has three fundamental structures that describe its operations and provide a basis for reporting.

  • Legal

  • Managerial

  • Functional

In Oracle Fusion, these structures are implemented using the chart of accounts and organization hierarchies. Many alternative hierarchies can be implemented and used for reporting. You are likely to have one primary structure that organizes your business into:

  • Divisions

  • Business Units

  • Departments

Align these structures with your strategic objectives.

This figure illustrates a grid with Business Axis, representing the enterprise division, Legal Axis representing the companies, and the Functional Axis representing the business functions.

This figure illustrates a group of legal entities.

Legal Structure

The figure illustrates a typical group of legal entities, operating various business and functional organizations. Your ability to buy and sell, own, and employ comes from your charter in the legal system. A corporation is:

  • A distinct legal entity from its owners and managers.

  • Owned by its shareholders, who may be individuals or other corporations.

Many other kinds of legal entities exist, such as sole proprietorships, partnerships, and government agencies.

A legally recognized entity can own and trade assets and employ people in the jurisdiction in which the entity is registered. When granted these privileges, legal entities are also assigned responsibilities to:

  • Account for themselves to the public through statutory and external reporting.

  • Comply with legislation and regulations.

  • Pay income and transaction taxes.

  • Process value added tax (VAT) collection on behalf of the taxing authority.

Many large enterprises isolate risk and optimize taxes by incorporating subsidiaries. They create legal entities to facilitate legal compliance, segregate operations, optimize taxes, complete contractual relationships, and isolate risk. Enterprises use legal entities to establish their enterprise's identity within the laws of each country in which their enterprise operates.

The figure illustrates:

  • A separate card represents a series of registered companies.

  • Each company, including the public holding company, InFusion America, must be registered in the countries where they do business.

  • Each company contributes to various divisions created for purposes of management reporting. These are shown as vertical columns on each card.

For example, a group might have a separate company for each business in the United States (US), but have its United Kingdom (UK) legal entity represent all businesses in that country.

The divisions are linked across the cards so that a business can appear on some or all of the cards. For example, the air quality monitoring systems business might be operated by the US, UK, and France companies. The list of business divisions is on the Business Axis.

Each company's card is also horizontally striped by functional groups, such as the sales team and the finance team. This functional list is called the Functional Axis. The overall image suggests that information might, at a minimum, be tracked by company, business, division, and function in a group environment. In Oracle Fusion Applications, the legal structure is implemented using legal entities.

Management Structure

Successfully managing multiple businesses requires that you segregate them by their strategic objectives, and measure their results. Although related to your legal structure, the business organizational hierarchies don't have to be reflected directly in the legal structure of the enterprise. The management structure can include divisions, subdivisions, lines of business, strategic business units, profit, and cost centers. In the figure, the management structure is shown on the Business Axis. In Oracle Fusion Applications, the management structure is implemented using divisions and business units as well as being reflected in the chart of accounts.

Functional Structure

Straddling the legal and business organizations is a functional organization structured around people and their competencies. For example, sales, manufacturing, and service teams are functional organizations. This functional structure is represented by the Functional Axis in the figure. You reflect the efforts and expenses of your functional organizations directly on the income statement. Organizations must manage and report revenues, cost of sales, and functional expenses such as research and development and selling, general, and administrative expenses. In Oracle Fusion Applications, the functional structure is implemented using departments and organizations, including sales, marketing, project, cost, and inventory organizations.

This example illustrates how to set up an enterprise based on a global company operating mainly in the US and the UK with a single primary industry.

Scenario

InFusion Corporation is a multinational enterprise in the high technology industry with product lines that include all the components that are required to build and maintain air quality monitoring systems for homes and businesses. Its primary locations are in the US and the UK, but it has smaller outlets in France, Saudi Arabia, and the United Arab Emirates (UAE).

Enterprise Details

In the US, InFusion employs 400 people and has company revenue of 120 million US dollars. Outside the US, InFusion employs 200 people and has revenue of 60 million US dollars.

Analysis

InFusion requires three divisions.

  • The US division covers the US locations.

  • The Europe division covers UK and France.

  • Saudi Arabia and the UAE are covered by the Middle East division.

InFusion requires legal entities with legal employers, payroll statutory units, tax reporting units, and legislative data groups for the US, UK, France, Saudi Arabia, and UAE, to employ and pay its workers in those countries.

InFusion requires a number of departments across the enterprise for each area of business, such as sales and marketing, and a number of cost centers to track and report on the costs of those departments.

InFusion has general managers responsible for business units within each country. Those business units may share reference data. Some reference data can be defined within a reference data set that multiple business units may subscribe to. Business units are also required for financial purposes. Financial transactions are always processed within a business unit.

Resulting Enterprise Configuration

Based on this analysis, InFusion requires an enterprise with multiple divisions, ledgers, legal employers, payroll statutory units, tax reporting units, legislative data groups, departments, cost centers, and business units.

This figure illustrates the enterprise configuration that results from the analysis of InFusion Corporation.

The figure shows the InFusion Enterprise Configuration,
including the three divisions, tax reporting units, legal entities,
legislative data groups, business units, cost centers, and sales departments.

An enterprise is a collection of legal entities sharing common control and management.

Enterprise Defined

When implementing Oracle Fusion Applications you operate within the context of an enterprise that has already been created in the application for you. This is either a predefined enterprise or an enterprise that has been created in the application by a system administrator. An enterprise organization captures the name of the deploying enterprise and the location of the headquarters. In Oracle Fusion Applications, an organization classified as an enterprise is defined before defining any other organizations in the HCM Common Organization Model. All other organizations are defined as belonging to an enterprise.

Managing multiple businesses requires that you segregate them by their strategic objectives and measure their results.

Responsibility to reach objectives can be delegated along the management structure. Although related to your legal structure, the business organizational hierarchies don't reflect directly the legal structure of the enterprise. The management entities and structure can include:

These organizations can be included in many alternative hierarchies and used for reporting, as long as they have representation in the chart of accounts.

Divisions

A division refers to a business-oriented subdivision within an enterprise, in which each division organizes itself differently to deliver products and services or address different markets. A division can operate in one or more countries, and can be many companies or parts of different companies that are represented by business units.

A division is a profit center or grouping of profit and cost centers, where the division manager is responsible for achieving business goals including profits. A division can be responsible for a share of the company's existing product lines or for a separate business. Managers of divisions may also have return on investment goals requiring tracking of the assets and liabilities of the division. The division manager generally reports to a corporate executive.

By definition a division can be represented in the chart of accounts. Companies can use product lines, brands, or geographies as their divisions: their choice represents the primary organizing principle of the enterprise.

Historically, divisions were implemented as a node in a hierarchy of segment values. For example, Oracle E-Business Suite has only one balancing segment, and often the division and legal entity are combined into a single segment where each value stands for both division and legal entity.

Use of Divisions in Oracle Fusion Human Capital Management (HCM)

Divisions are used in HCM to define the management organization hierarchy, using the generic organization hierarchy. This hierarchy can be used to create organization-based security profiles.

The two important components to be considered in designing your enterprise structure are cost centers and departments.

A cost center represents the smallest segment of an organization for which you collect and report costs. A department is an organization with one or more operational objectives or responsibilities that exist independently of its manager and has one or more workers assigned to it.

Cost Centers

A cost center represents the destination or function of an expense rather than the nature of the expense which is represented by the natural account. For example, a sales cost center indicates that the expense goes to the sales department.

A cost center is generally attached to a single legal entity. To identify the cost centers within a chart of accounts structure use one of these two methods:

  • Assign a cost center value in the value set for each cost center. For example, assign cost center values of PL04 and G3J1 to your manufacturing teams in the US and India. These unique cost center values allow easy aggregation of cost centers in hierarchies (trees) even if the cost centers are in different ledgers. However, this approach requires defining more cost center values.

  • Assign a balancing segment value with a standardized cost center value to create a combination of segment values to represent the cost center. For example, assign the balancing segment values of 001 and 013 with cost center PL04 to represent your manufacturing teams in the US and India. This creates 001-PL04 and 013-PL04 as the cost center reporting values. The cost center value of PL04 has a consistent meaning. This method requires fewer cost center values to be defined. However, it prevents construction of cost center hierarchies using trees where only cost center values are used to report results for a single legal entity. You must specify a balancing segment value in combination with the cost center values to report on a single legal entity.

Departments

A department is an organization with one or more operational objectives or responsibilities that exist independently of its manager. For example, although the manager may change, the objectives don't change. Departments have one or more workers assigned to them.

A manager of a department is typically responsible for:

  • Controlling costs within their budget

  • Tracking assets used by their department

  • Managing employees, their assignments, and compensation

The manager of a sales department may also be responsible for meeting the revenue targets.

The financial performance of departments is generally tracked through one or more cost centers. In Oracle Fusion Applications, departments are defined and classified as Department organizations. Oracle Fusion Human Capital Management (HCM) assigns workers to departments, and tracks the headcount at the departmental level.

The granularity of cost centers and their relationship to departments varies across implementations. Cost center and department configuration may be unrelated, identical, or consist of many cost centers tracking the costs of one department.

You can set up disability organizations to identify the external organizations with which disabled employees are registered, and assess the degree of disability in the employee. You set up disability organizations using the Manage Disability Organizations task in the Workforce Structures work area under My Client Groups.

Purpose of Disability Organizations

Disability organizations provide information and support to people with disabilities, for example, the Royal National Institute of Blind People. You can create a disability organization as a Trading Community Architecture party using the Manage Integration of Additional Applications task in the Setup and Maintenance work area. You can then select a disability organization party usage code.

For employees with disability, you can select the disability organization in their person records, identify the registration and expiration dates, and enter any other descriptive or legislative information about the disability.

Organization classifications define the purpose of the organization, whether it's a department, a division, or a legal entity. In some enterprises, organization classifications overlap, which means that the same organization can be assigned multiple classifications. For example, one organization within an enterprise might be both a project organization and a department. The classifications of organizations vary according to business objectives, legal structure, industry, company culture, size and type of growth. You can create organizations in Oracle Fusion with one or more classifications to reflect your enterprise structure.

Defining an Organization with One Classification

Define each organization in your enterprise as a separate organization with a single classification to reflect your enterprise structure and provide flexibility for expansion. The advantage of setting up separate organizations is the ability to add further organizations to expand the enterprise easily. For example, if your enterprise acquires another company which has a different line of business in a country in which you employ people, you can create a division, a legal entity, and additional departments. Classify the new legal entity as a legal employer and payroll statutory unit for the company's payroll tax and social insurance.

Defining an Organization with Multiple Classifications

Define an organization with multiple classifications if the organization has multiple purposes. For example, use an organization within the sales applications as a department that employs salespeople and classify it as a department and a sales organization. Or, if your enterprise operates and employs people in multiple countries, create a legal entity for each country using the Manage Legal Entity task. Then use the Manage Departments task to classify the legal entity as a department.

A legal entity is a recognized party with rights and responsibilities given by legislation.

Legal entities have the following rights and responsibilities to:

  • Own property

  • Trade

  • Repay debt

  • Account for themselves to regulators, taxation authorities, and owners according to rules specified in the relevant legislation

Their rights and responsibilities may be enforced through the judicial system. Define a legal entity for each registered company or other entity recognized in law for which you want to record assets, liabilities, expenses and income, pay transaction taxes, or perform intercompany trading.

A legal entity has responsibility for elements of your enterprise for the following reasons:

  • Facilitating local compliance

  • Minimizing the enterprise's tax liability

  • Preparing for acquisitions or disposals of parts of the enterprise

  • Isolating one area of the business from risks in another area. For example, your enterprise develops property and also leases properties. You could operate the property development business as a separate legal entity to limit risk to your leasing business.

The Role of Your Legal Entities

In configuring your enterprise structure in Oracle Fusion Applications, the contracting party on any transaction is always the legal entity. Individual legal entities:

  • Own the assets of the enterprise

  • Record sales and pay taxes on those sales

  • Make purchases and incur expenses

  • Perform other transactions

Legal entities must comply with the regulations of jurisdictions, in which they register. Europe now allows for companies to register in one member country and do business in all member countries, and the US allows for companies to register in one state and do business in all states. To support local reporting requirements, legal reporting units are created and registered.

You are required to publish specific and periodic disclosures of your legal entities' operations based on different jurisdictions' requirements. Certain annual or more frequent accounting reports are referred to as statutory or external reporting. These reports must be filed with specified national and regulatory authorities. For example, in the United States (US), your publicly owned entities (corporations) are required to file quarterly and annual reports, as well as other periodic reports, with the Securities and Exchange Commission (SEC), which enforces statutory reporting requirements for public corporations.

Individual entities privately held or held by public companies don't have to file separately. In other countries, your individual entities do have to file in their own name, as well as at the public group level. Disclosure requirements are diverse. For example, your local entities may have to file locally to comply with local regulations in a local currency, as well as being included in your enterprise's reporting requirements in different currency.

A legal entity can represent all or part of your enterprise's management framework. For example, if you operate in a large country such as the United Kingdom or Germany, you might incorporate each division in the country as a separate legal entity. In a smaller country, for example Austria, you might use a single legal entity to host all of your business operations across divisions.

Oracle Fusion Applications support the modeling of your legal entities. If you make purchases from or sell to other legal entities, define these other legal entities in your customer and supplier registers. These registers are part of the Oracle Fusion Trading Community Architecture.

When your legal entities are trading with each other, represent them as legal entities and as customers and suppliers in your customer and supplier registers. Use legal entity relationships to determine which transactions are intercompany and require intercompany accounting. Your legal entities can be identified as legal employers and therefore, are available for use in Human Capital Management (HCM) applications.

Several decisions you should consider when you create legal entities.

  • The importance of using legal entity on transactions

  • Legal entity and its relationship to business units

  • Legal entity and its relationship to divisions

  • Legal entity and its relationship to ledgers

  • Legal entity and its relationship to balancing segments

  • Legal entity and its relationship to consolidation rules

  • Legal entity and its relationship to intercompany transactions

  • Legal entity and its relationship to worker assignments and legal employer

  • Legal entity and payroll reporting

  • Legal reporting units

The Importance of Using Legal Entities on Transactions

All of the assets of the enterprise are owned by individual legal entities. Oracle Fusion Financials allow your users to enter legal entities on transactions that represent a movement in value or obligation.

For example, a sales order creates an obligation on the legal entity that books the order and promises to deliver the goods on the acknowledged date. The creation also creates an obligation on the purchaser to receive and pay for those goods. Contract law in most countries contains statutes that state damages can be sought for both:

  • Actual losses, putting the injured party in the same state as if they had not entered into the contract.

  • What is called loss of bargain, or the profit that would have made on a transaction.

In another example, if you revalued your inventory in a warehouse to account for raw material price increases, the revaluation and revaluation reserves must be reflected in your legal entity's accounts. In Oracle Fusion Applications, your inventory within an inventory organization is managed by a single business unit and belongs to one legal entity.

Legal Entity and Its Relationship to Business Units

A business unit can process transactions on behalf of many legal entities. Frequently, a business unit is part of a single legal entity. In most cases, the legal entity is explicit on your transactions. For example, a payables invoice has an explicit legal entity field. Your accounts payables department can process supplier invoices on behalf of one or many business units.

In some cases, your legal entity is inferred from your business unit that's processing the transaction. For example, Business Unit ACM UK has a default legal entity of InFusion UK Ltd. When a purchase order is placed in ACM UK, the legal entity InFusion UK Ltd is legally obligated to the supplier. Oracle Fusion Procurement, Oracle Fusion Project Portfolio Management, and Oracle Fusion Supply Chain applications rely on deriving the legal entity information from the business unit.

Legal Entity and Its Relationship to Divisions

The division is an area of management responsibility that can correspond to a collection of legal entities. If wanted, you can aggregate the results for your divisions by legal entity or by combining parts of other legal entities. Define date-effective hierarchies for your cost center or legal entity segment in your chart of accounts to facilitate the aggregation and reporting by division. Divisions and legal entities are independent concepts.

Legal Entity and Its Relationship to Ledgers

One of your major responsibilities is to file financial statements for your legal entities. Map legal entities to specific ledgers using the Oracle Fusion General Ledger Accounting Configuration Manager. Within a ledger, you can optionally map a legal entity to one or more balancing segment values.

Legal Entity and Its Relationship to Balancing Segments

Oracle Fusion General Ledger supports up to three balancing segments. Best practices recommend one segment represents your legal entity to ease your requirement to account for your operations to regulatory agencies, tax authorities, and investors. Accounting for your operations means you must produce a balanced trial balance sheet by legal entity. If you account for many legal entities in a single ledger, you must:

  1. Identify the legal entities within the ledger.

  2. Balance transactions that cross legal entity boundaries through intercompany transactions.

  3. Decide which balancing segments correspond to each legal entity and assign them in Oracle Fusion General Ledger Accounting Configuration Manager. Once you assign one balancing segment value in a ledger, then all your balancing segment values must be assigned. This recommended best practice facilitates reporting on assets, liabilities, and income by legal entity.

Represent your legal entities by at least one balancing segment value. You may represent it by two or three balancing segment values if more granular reporting is required. For example, if your legal entity operates in multiple jurisdictions in Europe, you might define balancing segment values and map them to legal reporting units. You can represent a legal entity with more than one balancing segment value. Do not use a single balancing segment value to represent more than one legal entity.

In Oracle Fusion General Ledger, there are three balancing segments. You can use separate balancing segments to represent your divisions or strategic business units to enable management reporting at the balance sheet level for each. This solution is used to empower your business unit and divisional managers to track and assume responsibility for their asset utilization or return on investment. Using multiple balancing segments is also useful when you know at the time of implementation that you're disposing of a part of a legal entity and want to isolate the assets and liabilities for that entity.

Implementing multiple balancing segments requires every journal entry that isn't balanced by division or business unit, to generate balancing lines. You can't change to multiple balancing segments after you begin using the ledger because your historical data isn't balanced by the new balancing segments. Restating historical data must be done at that point.

If your enterprise regularly spins off businesses or holds managers accountable for utilization of assets, identify the business with a balancing segment value. If you account for each legal entity in a separate ledger, no requirement exists to identify the legal entity with a balancing segment value.

While transactions that cross balancing segments don't necessarily cross legal entity boundaries, all transactions that cross legal entity boundaries must cross balancing segments. If you make an acquisition or are preparing to dispose of a portion of your enterprise, you may want to account for that part of the enterprise in its own balancing segment even if the portion isn't a separate legal entity. If you don't map legal entities sharing the same ledger to balancing segments, you can't distinguish them using intercompany functionality or track individual equity.

Legal Entity and Its Relationship to Consolidation Rules

In Oracle Fusion Applications you can map legal entities to balancing segments and then define consolidation rules using your balancing segments. You are creating a relationship between the definition of your legal entities and their role in your consolidation.

Legal Entity and Its Relationship to Intercompany Transactions

Use Oracle Fusion Intercompany feature to create intercompany entries automatically across your balancing segments. Intercompany processing updates legal ownership within the enterprise's groups of legal entities. Invoices or journals are created as needed. To limit the number of trading pairs for your enterprise, set up intercompany organizations and assign then to your authorized legal entities. Define processing options and intercompany accounts to use when creating intercompany transactions and to assist in consolidation elimination entries. These accounts are derived and automatically entered on your intercompany transactions based on legal entities assigned to your intercompany organizations.

Intracompany trading, in which legal ownership isn't changed but other organizational responsibilities are, is also supported. For example, you can track assets and liabilities that move between your departments within your legal entities by creating departmental level intercompany organizations.

Tip: In the Oracle Fusion Supply Chain applications, you can model intercompany relationships using business units, from which legal entities are derived.
Legal Entity and Its Relationship to Worker Assignments and Legal Employer

Legal entities that employ people are called legal employers in the Oracle Fusion Legal Entity Configurator. You must enter legal employers on worker assignments in Oracle Fusion HCM.

Legal Entity and Payroll Reporting

Your legal entities are required to pay payroll tax and social insurance such as social security on your payroll. In Oracle Fusion Applications, you can register payroll statutory units to pay and report on payroll tax and social insurance for your legal entities. As the legal employer, you might be required to pay payroll tax, not only at the national level, but also at the local level. You meet this obligation by establishing your legal entity as a place of work within the jurisdiction of a local authority. Set up legal reporting units to represent the part of your enterprise with a specific legal reporting obligation. You can also mark these legal reporting units as tax reporting units, if the legal entity must pay taxes as a result of establishing a place of business within the jurisdiction.

You can designate legal entities as legal employers and payroll statutory units, which makes them available for use in Oracle Fusion Human Capital Management (HCM). You can have only one legal entity that's also a payroll statutory unit and legal employer, or multiple legal entities, payroll statutory units and legal employers.

Payroll statutory units and tax reporting units share a parent child relationship with the payroll statutory unit being a parent of a tax reporting unit.

Legal Employers and Payroll Statutory Units

You can designate payroll statutory units to group legal employers to do statutory calculations at a higher level. For example, you can use payroll statutory units for court orders, or to calculate the United Kingdom (UK) statutory sick pay. A legal employer can exist independently of an enterprise or be a part of a payroll statutory unit. There can be many legal employers belonging to a payroll statutory unit, but a legal employer can belong only to one payroll statutory unit.

Legal Employers and Tax Reporting Units

Tax reporting units are indirectly associated with a legal employer through the payroll statutory unit. One or more tax reporting units can be used by a single legal employer, and a tax reporting unit can be used by one or more legal employers.

For example, if a single tax reporting unit is linked to a payroll statutory unit and two legal employers are associated with this payroll statutory unit, then both legal employers are associated with the tax reporting unit. Use the Manage Legal Reporting Unit HCM Information task to designate an existing legal reporting unit as a tax reporting unit. You need to select a parent payroll statutory unit when you create a legal reporting unit belonging to a legal employer (that isn't a payroll statutory unit as well). Next, you need to designate the legal reporting unit as a tax reporting unit and select the legal employer.

Legislative data groups are a means of partitioning payroll and related data. At least one legislative data group is required for each country where the enterprise operates. Each legislative data group is associated with one or more payroll statutory units. Each payroll statutory unit can belong to only one legislative data group.

Payroll-related information, such as elements, is organized by legislative data group. Each legislative data group:

  • Marks a legislation in which payroll is processed.

  • Is associated with a legislative code, currency, and its own cost allocation key flexfield structure.

  • Is a boundary that can share the same set up and still comply with the local laws.

  • Can span many jurisdictions as long as they're within one country.

  • Can contain many legal entities that act as payroll statutory units.

You can use any of these HCM organization models.

  • Simple Configuration

  • Multiple Legal Employers and Tax Reporting Units

  • One Payroll Statutory Unit and Two Tax Reporting Units

  • One Payroll Statutory Unit with Several Tax Reporting Units

  • Multiple Payroll Statutory Units with Several Tax Reporting Units

These models include a legislative data group (LDG) that isn't an organization classification and show how you can partition payroll data by associating them with a payroll statutory unit

Simple Configuration

This is an example of a simple configuration without any tax reporting units. The enterprise has only one legal entity, which is both a payroll statutory unit and a legal employer, and shares the same boundaries. In this type reporting can be done only at a single level. Countries such as Saudi Arabia and the United Arab Emirates (UAE) might use this type of model, as these countries report at the legal entity level.

This figure illustrates a simple configuration where the enterprise has only one legal entity, which is both a payroll statutory unit and a legal employer.

A figure that illustrates an enterprise with one legal
entity that's also a payroll statutory unit and a legal employer.
The legal entity is associated with one legislative data group.

Multiple Legal Employers and Tax Reporting Units

In this configuration, you define one legal entity, InFusion US as a payroll statutory unit with two separate legal entities, which are also legal employers. This model shows multiple legal employers that are associated with a single payroll statutory unit. Tax reporting units are always associated with a specific legal employer (or employers) through the payroll statutory unit.

The implication is that payroll statutory reporting boundaries vary from human resources (HR) management, and you can categorize the balances separately as either a payroll statutory unit, legal employer, or a tax reporting unit.

This configuration is based on tax filing requirements, as some tax-related payments and reports are associated with a higher level than employers. An example of a country that might use this model is the US

This figure illustrates an enterprise that has one payroll statutory unit and multiple legal employers and tax reporting units.

A figure that illustrates an example of an enterprise
with one payroll statutory unit, multiple legal employers and multiple
tax reporting units. The multiple legal employers are associated with
a single payroll statutory unit.

One Payroll Statutory Unit and Two Tax Reporting Units

This model makes no distinction between a legal employer and a payroll statutory unit. You define tax reporting units as subsidiaries to the legal entity.

In this enterprise, legal entity is the highest level of aggregation for payroll calculations and reporting. Statutory reporting boundaries are the same for both payroll and HR management. An example of a country that might use this model is France.

This figure illustrates an example of an organization with one legal entity. The legal entity is both a legal employer and a payroll statutory unit and that has two tax reporting units.

A figure that illustrates an example of an organization
that has one legal entity that's both a payroll statutory unit and
legal employer and has two tax reporting units.

One Payroll Statutory Unit with Several Tax Reporting Units

In this model, the enterprise has one legal entity. Legal employers and tax reporting units are independent from each other within a payroll statutory unit, because there is no relationship from a legal perspective. Therefore, you can report separately on both entities

Using this model, you can't report on tax reporting unit balances within a legal employer, and categorize balances by either or both organizations, as required. An example of a country that might use this model is India.

This figure illustrates an enterprise with one legal entity that's a payroll statutory unit and a legal employer. The tax reporting units are independent from the legal employer.

A figure that shows an example of an enterprise with
one legal entity that's both a legal employer and a payroll statutory
unit and that has multiple tax reporting units that are independent
from the legal employer.

Multiple Payroll Statutory Units with Several Tax Reporting Units

In this model, the enterprise has two legal entities. The legal employers and tax reporting units are independent from each other within a payroll statutory unit, because there is no relationship from a legal perspective. Therefore, you can report separately on both entities.

Using this model, you can't report on tax reporting unit balances within a legal employer, and categorize balances by either or both organizations, as required. An example of a country that might use this model is the United Kingdom (UK).

This figure illustrates an enterprise with two legal entities, and legal employers and tax reporting units are independent from each other.

A figure that illustrates an example of an enterprise
with multiple payroll statutory units with several tax reporting units.
The enterprise has two legal entities in which the legal employers
and tax reporting units are independent of each other.

Oracle Fusion trees graphically represent the hierarchical structures of your organization. You manage trees in the Workforce Structures work area under My Client Groups.

There are predefined tree structures for department, organization, position, and geography. You can't change the predefined HCM tree structures. With the exception of geography trees, you can create multiple trees for each HCM tree type, and multiple versions of each tree. however, only one version of a tree can be active at any time.

Department Trees

You can create multiple department trees using the predefined department tree structure. The first node of the tree is a department and you can have only one first node for a department tree. You can't add a department as a node more than once in the same tree version. You can secure data by using department trees in an organization security profile.

Organization Trees

You can automatically create a default organization tree if you use the Oracle Fusion Enterprise Structures Configurator to set up your enterprise. You can create the tree with the ultimate holding company as the first node, divisions and country holding companies in the second level and legal employers in the third level. If you aren't using the Enterprise Structures Configurator, you can create organization trees using the predefined tree structure. You can select any type of organization as the first node and for the child nodes, but there can be only one first node.

You can secure HCM data using an organization tree, to identify organizations in an organization security profile

Position Trees

You can create multiple position trees using the predefined position tree structure in the Workforce Structures work area. You can then create multiple versions to establish reporting relationships among positions. position trees can have only one first node.

Position Tree Uses

  • You can use position hierarchies for budgeting and organizational planning.

  • You can secure access to positions by identifying a position hierarchy in a position security profile. For example, you can create a position security profile that includes all positions in a position hierarchy under a specified first position. You can also include the position security profile in a person security profile to secure access to person records. In this case, the person security profile includes the person records of the people who occupy the positions in the position security profile.

Example of a Position Tree

The following figure illustrates a position hierarchy that you can establish using a position tree.

A figure that illustrates a hierarchy of positions within
a company. In the position hierarchy the directors report to the Vice
Presidents The General Auditor and the Vice Presidents report to the
President and CEO of the company.

Geography Trees

You can create versions of the predefined geography tree structure to represent countries in which your enterprise operates. For each country, you can define lower-level nodes such as states and cities. For example, United Kingdom - England - London. You manage trees in the Workforce Structures work area.

Although you can create multiple versions, you can create only one tree in the hierarchy. Geography trees also have only one first node.

Calendar Events

You use the geography tree to specify the locations to which calendar events apply. You can create the tree using these conditions.

  • If an event applies to your entire enterprise, you can attach it to the first node in the tree, for example, Global.

  • If an event applies only to specific countries in your enterprise, you can attach it to the nodes for those specific countries, for example, United Kingdom.

  • If an event applies only to specific states or cities in a country, you can attach it to the state or city level nodes. For example, England, London.

Example of a Geography Tree

This figure illustrates the geographical hierarchy that you can establish using a geography tree.

A figure that illustrates a hierarchy of geographic
locations. In the geographical tree, the hierarchy is built according
to country, state, and city. For example, United States country has
California state under it and under the California state there is
San Mateo city. Similar hierarchies are built for United Kingdom,
England, London and India, Andhra Pradesh, Hyderabad.

The InFusion Corporation is a global company with organizations in the United States (US), the United Kingdom (UK), France, China, Saudi Arabia, and the United Arab Emirates (UAE). Its main area of business is in the high tech industry, but it recently acquired a financial services business, based in Germany. InFusion wants to retain the financial services company as a separate business with all the costs and reporting managed by the Financial Services division.

You need to set up organizations to reflect the newly acquired company and its organizations.

The following figure illustrates how to set up the new division for Germany, and how the new division fits into the enterprise.

A figure that shows InFusion Corporation after
adding the Germany Financial Services division

The following table summarizes the key decisions for setting up the new division:

Decisions to Consider In This Example

Create a separate division?

Yes, as you want to keep the Financial Services company as a separate line of business. By creating a separate division, you can manage the costs and reporting separately from the InFusion Corporation. Additionally, you don't have to modify any existing organizations in your enterprise setup.

How many departments?

The Financial Services company currently has three departments for sales, accounting, and marketing. As InFusion has no plans to downsize or change the company, you can create the three departments to retain the structure.

How many cost centers?

Three, to track the costs of each department.

How many legal entities?

You need one legal entity defined as a legal employer and payroll statutory unit. As the new division operates only from Germany, you can configure the legal entity to suit Germany's legal and statutory requirements.

Create legislative data group?

Yes, you need a legislative data group as you currently don't employ or pay people in Germany. Create one legislative data group to run payroll for your workers in Germany.

Create location?

Create a new location address for each organization located differently. The financial services company is based in Frankfurt, and the headquarters and departments are all in the same location.

You can use the following tasks to set up the enterprise structures that you need to include in the new Financial Services company:

  • Creating a Location

  • Creating a Division

  • Creating Departments

  • Creating a Legislative Data Group

  • Creating Legal Entities

  • Defining Legal Employer and Payroll Statutory Unit Information

Creating a Location

  1. In the Workforce Structures work area, click the Manage Locations tab to open the Manage Locations page.

  2. On the Manage Locations page, click Create, and complete the fields shown in the following table. Use the default values except where indicated.

    Field Value

    Name

    Germany

    Code

    DE

    Country

    Germany

    Address Line 1

    Hauptstrasse 85

    Postal Code

    6000

    City

    Frankfurt

  3. Click Submit.

Creating a Division

  1. In the Workforce Structures work area, click Manage Divisions to open the Manage Divisions page.

  2. On the Manage Divisions page, click Create.

  3. On the Create Division: Division Description page, select the Create New option to create a division with a single classification.

  4. In the Division Description region, complete the fields shown in the following table. Use the default values except where indicated.

    Field Value

    Name

    Germany Financial Services

    Location

    Germany

  5. Click Next.

  6. On the Create Division: Division Details page, complete the fields shown in the following table. Use the default values except where indicated.

  7. Click Next.

  8. On the Create Division: Review page, review the division details, and click Submit.

  9. Click Yes.

  10. Click OK.

Creating Departments

  1. In the Workforce Structures work area, click the Manage Departments tab to open the Manage Department page.

  2. On the Manage Departments page, click Create.

  3. On the Create Department: Description page, select the Create New option to create a department with a single classification.

  4. Enter the details of the accounting department by completing the fields shown in the following table. Use the default values except where indicated.

    Field Value

    Department Name

    Accounting

    Location

    Germany

  5. Click Next.

  6. Associate a cost center in the Create Department: Department Details page.

  7. Click Next.

  8. On the Create Department: Review page, review the details of the department, and click Submit.

  9. Repeat steps 2 through 8 to create the sales and marketing departments.

Creating a Legislative Data Group

  1. In the Setup and Maintenance work area, locate the Manage Legislative Data Groups task. Click Go to Task to open the Manage Legislative Data Group page.

  2. On the Manage Legislative Data Groups page, click Create.

  3. On the Create Legislative Data Groups page, complete the fields shown in the following table. Use default values except where indicated.

    Field Value

    Name

    Germany Financial Services

    Country

    Germany

    Currency

    Eur

  4. Click Submit.

Creating Legal Entities

  1. In the Setup and Maintenance work area, locate the Manage Legal Entity task. Click Go to Task to open the Manage Legal Entity page.

  2. On the Manage Legal Entity page, click Create.

  3. On the page, complete the fields shown in the following table. Use default values except where indicated.

    Field Value

    Name

    Legal Entity

    Legal Entity Identifier

    123456

    Payroll Statutory Unit

    Selected

    Legal Employer

    Selected

    Legal Address

    123

    EIN or TIN

    123

    Registration Number

    123

  4. Click Save and Close.

Defining Legal Employer and Payroll Statutory Unit Information

  1. In the Setup and Maintenance work area, locate the Manage Legal Entity HCM Information task. Click Go to Task to open the Manage Legal Entity page.

  2. Search for the new legal entity that you created in the "Creating Legal Entities" task.

  3. Enter the payroll statutory unit and legal employer details.

  4. Associate the legislative data group with the payroll statutory unit.

  5. Click Save.

FAQs for Departments, Divisions, and Organizations

Use a tax reporting unit to group workers for the purpose of tax and social insurance reporting. A tax reporting unit is the Oracle Fusion Human Capital Management (HCM) version of the legal reporting unit in Oracle Fusion Applications.

To create a tax reporting unit, you use the Oracle Fusion Legal Entity Configurator to define a legal entity as a payroll statutory unit. When you identify a legal entity as a payroll statutory unit, the application transfers the legal reporting units that are associated with that legal entity to Oracle Fusion HCM as tax reporting units. You can then access the tax reporting unit using the Manage Legal Reporting Unit HCM Information task.

If you identify a legal entity as a legal employer, and not as a payroll statutory unit, you must enter a parent payroll statutory unit. The resulting legal reporting units are transferred to Oracle Fusion HCM as tax reporting units, but as children of the parent payroll statutory unit that you entered, and not the legal entity that you identified as a legal employer.

Payroll statutory units are legal entities that are responsible for paying workers, including the payment of payroll tax and social insurance. A payroll statutory unit can pay and report on payroll tax and social insurance on behalf of one or many legal entities, depending on the structure of your enterprise. For example, if you're a multinational, multiple company enterprise, then you register a payroll statutory unit in each country where you employ and pay people. You can optionally register a consolidated payroll statutory unit to pay and report on workers across multiple legal employers within the same country. You associate a legislative data group with a payroll statutory unit to provide the correct payroll information for workers.

A legal employer is a legal entity that employs workers. You define a legal entity as a legal employer in the Oracle Fusion Legal Entity Configurator.

The legal employer is captured at the work relationship level, and all assignments within that relationship are automatically with that legal employer. Legal employer information for worker assignments is also used for reporting purposes.

A reporting establishment is an organization that's used for statutory reporting other than tax and social insurance reporting. In some countries, such as France, a reporting establishment can also be a tax reporting unit. A reporting establishment and a legal employer share a parent-child relationship with the legal employer being the parent organization. A legal employer can be the parent of multiple reporting establishments. You create reporting establishments using the Manage Legal Reporting Unit HCM Information task in the Setup and Maintenance work area.

No you can't. However, you can disable an organization if it's no longer required. For example, if the enterprise is downsizing, then you can set the status of the organization to inactive. Changing the status of the organization disables the organization and the organization is no longer available to select.

Use the organization manager information in the Create and Edit Department pages to enter a reporting name to identify the organization in a report. You use organization hierarchies for statutory, legal and management reporting

You can see all employees in the Manager list.

Locations

A location identifies physical addresses of a workforce structure, such as a department or a job. You create and manage locations using the Manage Locations task in the Workforce Structures work area on the My Client Groups tab.

You can also create locations to enter the addresses of external organizations that you want to maintain, such as employment agencies, tax authorities, and insurance or benefits carriers.

The locations that you create exist as separate structures that you can use for reporting purposes, and in rules that determine employee eligibility for various types of compensation and benefits. You enter information about a location only once. Subsequently, when you set up other workforce structures you select the location from a list.

Location Sets

When you create a location, you must associate it with a set. Only those users who have access to the set's business unit can access the location set and other associated workforce structure sets, such as those that contain departments and jobs.

Note the following:

  • You can also associate the location to the common set so that users across your enterprise can access the location irrespective of their business unit.

  • When users search for locations, they can see the locations that they have access to along with the locations in the common set.

The following figure shows how locations sets restrict access to users.

A figure that illustrates how access to locations is
controlled using sets. If a location is associated with the common
set, then all users in that location can access all locations in the
common set.

Uploading Locations Using a Spreadsheet

If you have a list of locations already defined for your enterprise, you can upload them from a spreadsheet.

To use this option:

  • Download a spreadsheet template

  • Add your location information to the spreadsheet

  • Upload directly to your enterprise configuration

You can upload the spreadsheet multiple times to accommodate revisions.

FAQs for Locations

You can search for approved locations only. Also, if you created a location in Oracle Fusion Trading Community Model, then you can't access that location from Oracle Fusion Global Human Resources. For use in Oracle Fusion HCM, you must recreate the location from the Manage Locations page.

From the Oracle Fusion Global Human Resources, go to the Manage Locations page. Use the Manage Locations task in the Workforce Structures work area.

To appear on the Create or Edit Location pages, your inventory organization must be effective on today's date and must exist in the location set that you selected.

The location is available for selection in purchase documents of that inventory organization in Oracle Fusion Inventory Management. If you don't select an inventory organization, then the location is available in purchase documents across all inventory organizations.

The calendar events that you created for the geographic node start to apply for the location and may impact the availability of worker assignments at that location. You manage locations using the Manage Locations task in the Workforce Structures work area.

The geographical hierarchy nodes available for selection on the Locations page display from a predefined geographic hierarchy.

Starting from the effective date that you entered, you can no longer associate the location with other workforce structures, assignments, or applications. If the location is already in use, it will continue to be available to the components that currently use it.

Worker Unions

These three components manage worker union information in Human Capital Management (HCM) Cloud:

  • Worker Unions

  • Bargaining Units

  • Collective Agreements

Worker Unions

The worker union is a HCM organization. You can create a new worker union or select an existing organization to define a worker union. The details of a worker union are country-specific and the country value is mandatory for a worker union. You can optionally attach any supporting documents for the worker union. A worker union holds date-effective attributes. Therefore, you can track the changes to the worker union over a period of time. You can also inactivate the worker union. You can configure additional attributes specific to any legislation or customer using the available descriptive flexfields and extensible flexfields.

You can optionally associate worker unions with their affiliated bargaining units. The values in the Bargaining Unit and Location fields are filtered to match the country you selected. You can add more than one work union contact and enter the contact details, such as contact name, union title, work phone, and work Email.

This figure illustrates the association between worker union, bargaining unit, and collective agreement:

Worker union 1 contains bargaining unit 1 and bargaining
unit 2. Bargaining unit 1 contains collective agreement 1. Bargaining
unit 2 contains collective agreement 2 and collective agreement 3.
Worker union 2 contains bargaining unit 3. Worker union 3 contains
collective agreement 4. Bargaining unit 4 contains collective agreement
5.

A worker union can be associated with multiple bargaining units. However, a bargaining unit can be associated with only one worker union. A collective agreement can be associated with only one worker union and bargaining unit. A worker union or bargaining unit can be associated with multiple collective agreements.

This figure illustrates the association between position or assignment and worker union, bargaining unit, and collective agreement:

Position 1 or assignment 1 contains worker union
1. Worker union 1 contains bargaining unit 1. Bargaining unit 1 contains
collective agreement 1. Position 2 or assignment 2 contains worker
union 2. Worker union 2 contains bargaining unit 3. Position 3 or
assignment 3 contains worker union 3. Worker union 3 contains collective
agreement 4. Position 4 or assignment 4 contains bargaining unit 4.
Bargaining unit 4 contains collective agreement 5.

A position or worker assignment can be associated with only one collective agreement, bargaining unit, and worker union. However, a bargaining unit, worker union, or collective agreement can be associated with multiple positions or worker assignments.

Bargaining Units

A bargaining unit is a specific group of employees who are represented by one authorized union or association for purposes of collective bargaining. A bargaining unit is defined as a lookup type.

Collective Agreements

A collective agreement is a special type of commercial agreement that's negotiated collectively between the management (on behalf of the company) and trade unions (on behalf of employees). The agreement regulates the terms and conditions of employees in their workplace, their duties, and the duties of the employer.

Let's take a look at the collective agreement details:

A collective agreement is country-specific. You may enter the bargaining unit, legal employer, and union values depending on the country. For example, you can create a collective agreement without the bargaining unit and legal employer, or only with the legal employer. When you select the value in the Country field, the values in the Bargaining Unit, Legal Employer, and Union fields are filtered to match the country selected. You can optionally associate collective agreements with worker unions and attach documents to the collective agreement.

You can provide details of the parties negotiating the collective agreement, such as the employee and employer organizations. The employee organization can be the trade union or bargaining unit representing the employee while the employer organization is represented by the company management.

A collective agreement is date-effective, therefore, you can track changes to a collective agreement over time. You can also inactivate the collective agreement. You can configure additional attributes specific to a legislation or customer using the available descriptive flexfields and extensible flexfields. If you specify a Valid To date for a collective agreement, it lapses after that date and you can't link it to an employee.

Note: If the collective agreement is linked to an assignment, you can't edit the Identification Code, Country, Bargaining Unit, Union, and Legal Employer fields. Additionally, you can't delete the collective agreement.

Here's how you can link collective agreements:

You can link a collective agreement to an assignment provided the bargaining unit, country, and legal employer of the collective agreement are consistent with the assignment. If you created a collective agreement without associating it with a legal employer or bargaining unit, you can link the collective agreement to any assignment within the same country.

You can link a union, bargaining unit, or collective agreement with a worker assignment provided that its country and legal employer is consistent with the assignment.

The union, bargaining unit, and collective agreement that you can select for linking with an assignment are filtered as described in this table:

Attribute Filter Conditions

Union

The list of values is filtered to show unions that are active as of the start date and whose country matches the country of the legal employer on the worker assignment.

Bargaining Unit

  • The list of values is filtered to show bargaining units that are active as of the start date and are associated with the selected union.

  • If you don't select a union, the list of values is filtered to show bargaining units that are active as of the start date, and whose country matches the legal employer country or have no country tag itself.

Collective Agreement

Note: The list of values is filtered to show only those values that match the country of the legal employer on the worker assignment.

If you select a bargaining unit without selecting a union, the list of values is filtered this way:

  • Shows collective agreements that are active and don't have an associated union or bargaining unit value.

  • Shows collective agreements that are active and match the selected bargaining unit, but don't have an associated union.

If you select a union without selecting a bargaining unit, the list of values is filtered this way:

  • Shows collective agreements that are active and don't have an associated union or bargaining unit value.

  • Shows collective agreements that are active and match the selected union, but don't have an associated bargaining unit.

If you don't select a union or bargaining unit, the Collective Agreement list of values is filtered to show all active collective agreements as of the start date.

If you select a union and a bargaining unit, the list of values is filtered this way:

  • Shows collective agreements that are active and don't have an associated union or bargaining unit value.

  • Shows collective agreements that are active and match the selected union and bargaining unit.

Jobs and Positions

Jobs and positions represent roles that enable you to distinguish between tasks and the individuals who perform those tasks.

Note the following:

  • The key to using jobs or positions depends on how each is used.

  • Positions offer a well-defined space independent of the person performing the job.

  • Jobs are a space defined by the person.

  • A job can be defined globally in the Common Set, whereas a position is defined within one business unit.

  • You can update the job and department of a position at any time. For example, if you hire someone into a new role and want to transfer the position to another department.

During implementation, one of the earliest decisions is whether to use jobs or a combination of jobs and positions. The determinants for this decision are:

  • The primary industry of your enterprise

  • How you manage your people

Primary Industry of Your Enterprise

The following table outlines information about Primary industries and how they set up their workforce.

Primary Industry Workforce Setup

Mining

Positions

Utilities

Positions

Manufacturing

Positions

Retail Trade

Positions

Transportation and Warehousing

Positions

Educational Services

Positions

Public Transportation

Positions

Agriculture, Forestry, Fishing, and Hunting

Jobs

Construction

Jobs

Wholesale Trade

Jobs

Information

Jobs

Finance and Insurance

Jobs

Professional, Scientific, and Technical Services

Jobs

Management of Companies and Enterprises

Jobs

Administrative and Support and Waste Management and Remediation Services

Jobs

Arts, Entertainment, and Recreation

Jobs

Accommodation and Food Services

Jobs

Other Services (Except Public Administration)

Jobs

Management of People

Consider the following scenarios how industries manage their employee turnover:

  • Scenario 1: Replace employees by rehiring to the same role.

  • Scenario 2: Replace headcount but the manager uses the headcount in a different job.

  • Scenario 3: Rehire employees to the same position, but the manager requests reallocation of budget to a different post.

The following table displays suggestions of what the industry should use, either jobs or positions, in these three scenarios:

Industry Scenario 1 Scenario 2 Scenario 3

Project (An industry that supports project-based forms of organization in which teams of specialists from both inside and outside the company report to project managers.)

Positions

Jobs

Jobs

Controlled (An industry that's highly structured in which all aspects of work and remuneration are well organized and regulated.)

Positions

Positions

Positions

Manufacturing

Positions

Jobs

Positions

Retail

Positions

Jobs

Positions

Education

Positions

Jobs

Positions

Other

Positions

Jobs

Jobs

Jobs are typically used without positions by service industries where flexibility and organizational change are key features.

Software Industry

For example, XYZ Corporation has a director over the departments for developers, quality assurance, and technical writers.

  • Recently, three developers have resigned from the company.

  • The director decides to redirect the headcount to other areas.

  • Instead of hiring all three back into development, one person is hired to each department, quality assurance, and technical writing.

In software industries, the organization is fluid. Using jobs gives an enterprise the flexibility to determine where to use headcount, because the job only exists through the person performing it. In this example, when the three developers leave XYZ Corporation, their jobs no longer exist, therefore the corporation has the flexibility to move the headcount to other areas.

This figure illustrates the software industry job setup.

A figure that illustrates an example of jobs setup in
the software industry. The Technology Department in XYZ Corporation
has three job titles, which are Developer, Quality Assurance Specialist,
and Technical Writer.

Positions are typically used by industries that use detailed approval rules, which perform detailed budgeting and maintain headcounts, or have high turnover rates.

Retail Industry

ABC Corporation has high turnovers. It loses approximately 5% of its cashiers monthly. The job of the cashier includes three positions: front line cashier, service desk cashier, and layaway cashier. Each job is cross-trained to take over another cashier's position. When one cashier leaves from any of the positions, another existing cashier from the front line, service desk or layaway can assist where needed. But to ensure short lines and customer satisfaction, ABC Corporation must replace each cashier lost to turnover. Since turnover is high in retail it's better for this industry to use positions.

Note the following:

  • You have to create a vacancy manually when position synchronization is used and an employee terminates employment (when an incumbent moves out of the position).

  • The position exists even when there are no holders. Having the position continue to exist is important if the person who leaves the company is a manager or supervisor with direct reports.

  • All direct reports continue reporting to the position even if the position is empty.

  • You don't have to reassign these employees to another manager or supervisor. The replacement manager is assigned to the existing position.

Also, an added advantage to using Positions is when you hire somebody new, many of the attributes are inherited from the position. This speeds up the hiring process.

This figure illustrates the retail position setup.

A figure that illustrates the positions setup for a retail
store and the incumbent in each position. The cash supervisor position
is currently vacant and there are ten open positions for the front
line cashier, three open positions for the service desk cashier, and
two open positions for the layaway cashier.

Health Care Industry

Health care is an industry that must regulate employment, roles, and compensation according to strict policies and procedures. Fixed roles tend to endure over time, surviving multiple incumbents. Industries that manage roles rather than individuals, where roles continue to exist after individuals leave, typically model the workforce using positions.

The hospital has a structured headcount and detailed budgeting. For example, a specific number of surgeons, nurses, and interns of various types are needed. These positions must be filled in order for the hospital to run smoothly. Use jobs and positions when you apply detailed headcount rules.

This figure illustrates the hospital position setup.

A figure that illustrates the positions setup for an
health care industry with surgeons, nurses, and interns in different
positions.

If position synchronization is enabled, assignments inherit specified values from the associated position.

Synchronized Attributes

You can select any of the following attributes for synchronization when position synchronization is enabled:

  • Department

  • Job

  • Location

  • Grade

  • Grade Ladder

  • Manager

  • Full Time or Part Time

  • Regular or Temporary

  • Assignment Category

  • FTE and Working Hours

  • Start Time and End Time

  • Probation Period

  • Union, Bargaining Unit and Collective Agreement

  • Synchronize Mapped Flexfields

Position Changes

All active assignments that are synchronized from position automatically inherit changes from the position. Assignment attributes synchronized from position automatically inherit changes from the position. For those attributes not synchronized from position, you can either retain the existing values or update values from the position.

The Review page in the Edit Position page displays the list of impacted assignments with a status for each assignment. The status indicates if there are any issues due to the position change. You must correct all errors before submitting the position changes.

Assignment Changes

When you change the position in existing assignments you have a choice whether to inherit the values for those attributes which aren't synchronized from the position. If you choose not to inherit, then the previous values remain unchanged.

Position Synchronization Configuration Changes

If the position synchronization configuration is changed after person and assignments are created, then the Synchronize Person Assignment from Position process must be run to apply the changes in assignments.

Position Hierarchy Configuration Changes

When the manager is synchronized from the HCM position hierarchy and you change the parent position, all assignments inherit the new manager from the current parent position. When you remove a position from the hierarchy, all child positions move one level up in the hierarchy. Hence, the grandparent position is the new parent position.

The incremental flattening process is triggered when you add or change a parent position. The flattening process will update the changes in the position hierarchy.

When you change the position in an existing assignment, the manager value is updated based on the parent position of the changed position. If the parent position doesn't have an incumbent, the incumbent in the position in the next level up in the hierarchy is the new manager.

Uploading Changes Using HCM Data Loader

When you create or update assignments using HCM Data Loader, you can synchronize them from positions. In this case, you must:

  • Enable position synchronization before you load the assignments. If you enable it after the assignments are loaded, then you can synchronize from positions for current and future dates only.

  • Set the Synchronize from Position (Position Override) attribute on the employment terms or assignment object to Y.

After loading the assignments, you must run the Synchronize Person Assignments from Position process to synchronize the assignments. When you run the process, set the Past Period to Be Considered in Days parameter to an appropriate value. For example, if you set this parameter to 60 days, then any assignment records with start dates during the previous 60 days are synchronized from positions. By default, Past Period to Be Considered in Days is set to 30 days.

Position synchronization is inheritance of values in an assignment from the values specified in the associated position. You can enable position synchronization at the enterprise and legal entity levels using the Manage Enterprise HCM Information and Manage Legal Entity HCM Information tasks (in the Setup and Maintenance work area) respectively.

Enterprise Level Setup

You can enable position synchronization either at the enterprise or the legal employer levels. Select the Enable Position Synchronization attribute in the Edit Enterprise page to enable position synchronization for the enterprise. By default, this attribute is deselected. You can also specify whether the inherited values can be overridden at the assignment level.

If you enable position synchronization at the legal entity and the enterprise levels, then the settings specified at the legal employer level takes precedence over the settings specified at the enterprise level.

Legal Employer Level Setup

Set the Enable Position Synchronization attribute to Yes in the Position Synchronization page to specify the attributes to be configured with the position for the legal employer.

Select No for the Enable Position Synchronization attribute, to exclude a specific legal employer.

You can also use the same settings as defined for the enterprise. In this case, you must select the Use Enterprise option, which is the default value. If position synchronization is configured at the enterprise level, then the assignment inherits the attribute values from the position selected. You can also override these values at the assignment level.

Enabling Position Synchronization Post Setup

Here are the steps to enable position synchronization for the enterprise or legal entity post setup..

  1. On the Home page, under My Client Groups tab, click the Show More link to access more quick actions.

  2. Navigate to Workforce Structures > Manage Enterprise HCM Information page or Manage Legal Entity HCM Information page.

  3. Under Position Synchronization Configuration section, select the attributes that you want to synchronize.

  4. Select the Allow Override at the Assignment option if you want to exclude an assignment from synchronization.

  5. Using HCM Data Loader, you need to update all assignments that you want to must be synchronized from the position (as of the date you want to enable position synchronization).

  6. Set the Synchronize from Position (position override check in HCM Data Loader) attribute on these assignments to Y. This enables position synchronization even if you don't want to allow override at the assignment.

  7. Run the Synchronize Person Assignments from Position process to synchronize the assignments.

If you enable position synchronization, assignments inherit specified values from the associated position. You can also specify whether the inherited values can be overridden in the assignment. You can specify this at the enterprise and legal entity levels using the Manage Enterprise HCM Information and Manage Legal Entity HCM Information tasks respectively.

Overriding of Assignment Values

When you enable position synchronization, you specify which attributes the assignment inherits from the position due to synchronization. Assignment attributes synchronized from position inherit their values from the position and aren't editable. The restriction on editing values in the assignment applies only to the information that's entered in the position. For example, if the Bargaining Unit isn't entered in the position, you can edit this value in the assignment even though it's one of the attributes inherited from the position. If override is allowed at the assignment level, then you can specify at the assignment level whether you want to synchronize from position or not. By default, the Synchronize from Position attribute on the Edit Assignments page is set to Yes. If you prevent override at the assignment level, users can't update the specified attributes that the assignment has inherited from the position. You can use personalization to enable managers to specify a value for the Synchronize from Position field.

You can choose to either retain the existing values in the assignment or update the values from the position for any attributes that aren't synchronized. So, if you don't select the grade attribute for synchronization and update the grade value in the position, you can either retain the existing grade value in the assignment or update it from the position.

If a synchronized attribute is empty at the position, then this attribute won't be synchronized in the assignment. You can enter any value for this attribute in the assignment. If a value already exists for this attribute, it will be retained and you can change it to any other value.

Note: If you choose to specify your own values for an assignment, then that assignment won't be synchronized with any future position changes.

Position hierarchy defines positions' relationships. The HCM position hierarchy is built based on these relationships. You enable the HCM position hierarchy on the Manage Enterprise HCM Information page in the Setup and Maintenance work area.

When you enable HCM position hierarchy:

  • You can specify the parent position for a position on the Create and Edit Position pages in the Workforce Structures work area. When you search for positions based on a parent position, it will show all child positions for the specific parent position.

  • You can also use the hierarchy to synchronize the line manager in the assignment from the line manager value in the parent position.

  • You can view the positions that are part of the HCM position hierarchy on the My Team page and view the incumbents for a position.

  • You can inactivate a position only if an incumbent with an inactive assignment exists.

Updating the Position Hierarchy

You can only correct the HCM position hierarchy. You can enable or disable the position hierarchy configuration by flattening the existing hierarchy. You must run the Synchronize Person Assignments from Position process to flatten the position hierarchy.

When the position hierarchy is flattened, then schedule to run the Synchronize Person Assignments from Position process. This will apply the manager changes in assignments if the position hierarchy is changed after person and assignments are created. The assignment changes can exist on the current date, date in the future, or in the past.

You can't change the position hierarchy configuration if the line manager is synchronized based on the HCM position hierarchy. However, if line manager synchronization was configured as of a date in the past, then you can correct the position hierarchy configuration.

The HCM position hierarchy shows the relationship between positions and their parent positions. You can view and edit the hierarchy on the HCM Position Hierarchy page, if your data security profile allows you.

You can identify a position's parent on the Manage Positions page if the Use HCM Position Hierarchy option is enabled for the enterprise.

The nodes of the position hierarchy represent positions and parent positions. You can:

  • Add child positions under a position either by creating a new position or by selecting an existing position as the child.

  • Create a copy of an existing position by specifying a new name and code. The rest of the information is copied from the original position to the copy. You can change any information that you want.

  • Edit the position.

  • View the incumbent details including name, person type, person number, position entry and exit dates, and their status as of the current date.

  • Delete any position that doesn't have any incumbents or child positions.

In each position node, you can view:

  • Position name and code.

  • Business unit, job, department, and location.

  • Number of incumbents for the position.

  • Open Full Time Equivalent (FTE)

  • Current incumbents in the position.

How You Create a Graphical Position Hierarchy

Vision Corporation is reorganizing its workforce and defining the hierarchy for all positions. You must create a position hierarchy as shown below:

The figure shows the position hierarchy for Vision Corporation.

The following table summarizes the key decisions for this scenario.

Decisions to Consider In this Example

Which business unit do these positions belong?

Vision Corp. US

What is the method for position code generation?

Manual

You must do the following before creating the position hierarchy:

  1. On the Manage Enterprise HCM Information page, enable HCM Position Hierarchy.

  2. Ensure you have the Manage HCM Position Hierarchy privilege, which enables you to update the hierarchy.

  3. Create the following positions -Executive Vice President, Vice President, Senior Sales Manager, and Senior Operations Manager.

  4. Display additional fields on the Create and Edit Position pages using personalization, if required.

Add a Parent Position to an Existing Position

  1. On the My Client Groups tab, click Workforce Structures.

  2. On the Manage Positions page, search and select the Vice President position.

  3. On the Position: Vice President page, click Edit and select Update.

  4. Select Reorganization.

  5. Click OK.

  6. Search and select the Executive Vice President position as the parent position.

  7. Click Review.

  8. Click Submit.

  9. Click Yes.

  10. Click OK.

Create a New Child Position

  1. On the HCM Position Hierarchy page, click the orange arrow icon in the Vice President node and select Create Child Position.

  2. On the Create Child Position page, enter the following details:

    Field Value

    Name

    Sales Director

    Code

    SALES_DIR

    Job

    Director

    Type

    Single Incumbent

    FTE

    1

    Headcount

    1

  3. Click Save and Close.

  4. For the Vice President node, repeat steps 1 and 2 using the following details:

    Field Value

    Name

    Operations Director

    Code

    OPS_DIR

    Job

    Director

    Type

    Single Incumbent

    FTE

    1

    Headcount

    1

  5. Click Save and Close.

Add an Existing Position as a Child Position
  1. In the Sales Director node, click the orange arrow icon and select Add Existing Position as a Child.

  2. Search and select the Senior Sales Manager position.

  3. Click OK.

  4. On the Edit Position: Senior Sales Manager page, click Save and Close.

  5. In the Operations Director node, click the orange arrow icon and select the Add Existing Position as Child option.

  6. In the Select Position window, search and select the Senior Operations Manager position.

  7. Click OK.

  8. On the Edit Position: Senior Operations Manager page, click Save and Close.

Create Duplicate Positions
  1. In the Senior Sales Manager node, click the orange arrow icon. and select Duplicate Position.

  2. On the Create Duplicate Position page, enter the following details:

    Field Value

    Name

    Sales Manager

    Code

    SALES_MGR

    Type

    Single Incumbent

    FTE

    1

    Headcount

    1

  3. Click Save and Close.

  4. In the Senior Operations Manager node, click the orange arrow icon. and select Duplicate Position.

  5. On the Create Duplicate Position page, enter the following details:

    Field Value

    Name

    Operations Manager

    Code

    OPS_MGR

    Type

    Single Incumbent

    FTE

    1

    Headcount

    1

  6. Click Save and Close.

Move the Sales Manager Node
You added the Sales Manager node under the Sales Director node instead of under the Senior Sales Manager node. You can drag the node and drop it on the Senior Sales Manager node.
  1. Select the Sales Manager node and drop it on the Senior Sales Manager node. The Sales Manager position automatically becomes a child of the Senior Sales Manager position.

    If you created a node in a wrong place, you can just drag and drop the node to the correct place. The hierarchy automatically adjusts itself when you do so.

Review and Submit the Position Hierarchy Changes
  1. On the HCM Position Hierarchy page, click Review. This page shows the positions that you added to the hierarchy or the changes made to existing positions.

  2. Click Submit.

  3. Click Yes.

  4. Click OK. If approval rules are set up, you'll be able to see the hierarchy changes after they are approved/

To select a line manager synchronization option for the enterprise or for individual legal entities, use the Manage HCM Enterprise Information and Manage HCM Legal Entity Information in the Setup and Maintenance work area respectively. This topic discusses the line manager synchronization options available.

HCM Position Hierarchy

Use the HCM Position Hierarchy to synchronize the line manager on the assignment with the incumbent of the parent position in the position hierarchy.

When there is a change in the position hierarchy, the affected assignments are automatically updated. Alternately, when you update a position using the HCM Data Loader run the Synchronize Person Assignments from Position process for the assignments to inherit the position changes. For example, if a position is moved under a different parent position, if there are any direct reports they're automatically reassigned to the incumbent in the new parent position. If there is no manager in the parent position, the application checks for the incumbent in the grandparent position, or until it finds an incumbent. If there are multiple incumbents in a parent position, the incumbent with the longest tenure in the position is assigned as the new manager, You can change the manager to the other incumbent on the Employment page.

If you move a position or remove it from the hierarchy, the grandparent position becomes the new parent position for all the child positions. For example, if you have a hierarchy as follows: Manager (grandparent), Team lead (parent), and Developer (child), and you move the Team Lead position to a different branch. The Manager position is the new parent position for the Developer position.

Note: If you're using HCM position hierarchy, remove the function privilege for the Manage Position Trees task in the Setup and Maintenance work area for your users. You can also hide the Manager field on the Create Position and Edit Position pages using personalization if you synchronize the line manager using position hierarchy.

Position Manager

Use the position manager to synchronize the line manager on the assignment with the line manager defined for the position. You can use this option if you're not using the HCM Position Hierarchy and want to manually maintain the manager at the position. .

To synchronize the position changes with the affected assignments, run the Synchronize Person Assignments from Position process. The Initialize Position Synchronization process to load position synchronization changes is incorporated into the Synchronize Person Assignments from Position process. Run the Synchronize Person Assignment from Position to:

  • Update affected assignments in the enterprise or legal entity if position synchronization is enabled (either initially or later, as a change).

  • Prevent data corruption

  • Synchronize the line manager based on the HCM position hierarchy.

  • Update assignments affected by the position changes, uploaded using HCM Data Loader.

Note: You must schedule this process to run on a regular basis. If you’re synchronizing the manager, then it's recommended to run this process daily.

Use the Schedule New Process page in the Scheduled Processes work area to run the Synchronize Person Assignment from Position process.

Before you run the process, you must enable position synchronization on the Manage Enterprise HCM Information or Manage Legal Entity HCM Information tasks in the Setup and Maintenance work area

Process Parameters

Past Period to Be Considered in Days

Number of days in the past to be considered for updating the attribute in the assignments. The default value is 30 days. Note that even if position synchronization was enabled in the past and you loaded position data with an effective date of 6 months back, you don’t need to specify 180 days as the number of days. This is because the process detects the effective date and the last updated date of the position data. You can enter 2 days as the parameter value though changes are effective 6 months back.

Run at Enterprise Level

Select Yes to run the process for the enterprise, or No to run it for a specific legal entity.

Legal Entity

Legal entity for which you want to run the process.

Process Results

This process updates all affected assignments with the changes from the position. This includes:

  • Changes due to position synchronization.

  • Past or future-dated changes to the position hierarchy.

  • Rollback of line manager changes in assignments for reverse termination.

  • Line manager hierarchy changes

  • Flexfield-mapping changes.

  • Changes in position loaded using HCM Data Loader

You map position flexfields with assignment flexfields using the Manage Assignment Flexfields Mapping task in the Functional Setup Manager.

Use the task to map assignment descriptive flexfield segments to position descriptive flexfield segments. Synchronizing mapped flexfields includes the following steps:

  1. Define flexfield mapping

  2. Enabling flexfield synchronization

  3. Synchronizing assignment flexfields from position flexfields

Define Flexfield Mapping

To map flexfields, follow these steps.

  1. In the Functional Setup Manager, click the Manage Assignment Flexfields Mapping task.

  2. Specify the following information.

    Field Description

    Source Context

    The context for the position descriptive flexfield. If you want to map a global position flexfield segment, leave the source context blank

    Source Segment

    The position descriptive flexfield segment of the selected context or the global segment if the context was left blank

    Destination Context

    The context for the assignment descriptive flexfield you want to map the position flexfield to. If you want to map it to a global assignment flexfield segment, leave the destination context blank.

    Destination Segment

    The assignment descriptive flexfield segment of the selected assignment context or the global segment if the context was left blank.

    Enterprise Configuration: Enable Position Synchronization

    Specify whether you want to use this flexfield mapping for position synchronization for the enterprise. Leave this field blank if the flexfield mapping applies to a specific legal employer.

    Legal Employer Configuration: Legal Employer

    Use this option if the flexfield mapping doesn't apply to the enterprise. You can select multiple legal employers. Select the legal employer.

    Legal Employer Configuration: Enable Position Synchronization

    Specify whether you want to use this flexfield mapping for position synchronization for the selected legal employer.

  3. Add more mappings as required and specify information described in step 2 for each row.

  4. Save the mapping.

Enabling Flexfield Synchronization

To enable flexfield synchronization, follow these steps.

  1. In the Setup and Maintenance work area, click the Manage Enterprise HCM Informationtask to enable the setting for the enterprise, or click the Manage Legal Entity HCM Information task to enable the setting for a specific legal entity.

  2. Click Edit and select Update.

  3. Select the Enable Position Synchronization and Synchronize Mapped Flexfields check boxes in the Position Synchronization Configuration section.

  4. Click Submit.

Synchronizing Assignment Flexfields from Position Flexfields

To synchronize assignment flexfields from position flexfields, follow these steps.

  1. In the Navigator, click Scheduled Processes.

  2. Click Schedule New Process.

  3. Run the Synchronize Person Assignments from Positions process.

You map position descriptive flexfields to assignment descriptive flexfields using the Manage Assignment Flexfield Mapping task in Oracle Fusion Functional Setup Manager.

Use this mapping to automatically populate values for those assignment flexfields mapped to the position flexfields, when position synchronization is enabled. This topic describes what to consider when you're mapping flexfields.

Enterprise or Legal Entity Levels

Before you map flexfields, you must decide whether you want the mapping to be available for the enterprise or for specific legal entities only. You can reuse a mapping across different legal entities. Settings at the legal employer level takes precedence over enterprise settings, if both are specified.

Context Specific or Global

You must decide whether to map context specific or global flexfield segments because you can't map a context specific flexfield segment to a global flexfield segment. You can't map two or more segments of different contexts or multiple position segments to the same assignment segment.

When you change the position value in an assignment, all synchronized global segments inherit the value from the new position. You can manually update those segments that have a blank value in the position.

When you change the position value in an assignment, all context specific segments inherit the value from the new position. If the new position has similar values to the old position and additional contexts defined, the assignments retain the same values and inherit the additional values from the new position.

Selecting and removing a position in an assignment makes the context and segments editable but the current values aren't removed if they're synchronized from the position.

Numeric or Character

You can map flexfields of the same type (for example, numeric-to-numeric or character-to-character only), same precision, and the same value set (same value set ID).

Create a Position Profile

Profiles help you in identifying the requirements and competencies for a position. You can associate an existing profile. You can also create a new profile and associate it with the position by updating or correcting the position.. You can associate a profile to a position using any of these pages - Position Details, Position Change, and Request a New Position. Here's how you create a position profile.

  1. On the Home page, click My Client Groups.

  2. Navigate to the quick actions and click the Show More link.

  3. Under Workforce Structures, click Position Details.

  4. Search for and click the position for which you want to associate the profile.

  5. On the Position Details page, click Create Profile under the Actions menu.

  6. On the Create Position Profile page, enter these details.

    Field Description

    Position Responsibility

    Responsibilities that are required for the position.

    Position Qualifications

    Qualifications that are required of the people in the position.

  7. Click Save.

FAQs for Jobs and Positions

When can I enable position synchronization?

You can enable position synchronization at any time but if there are existing assignments in an enterprise or legal employer, you can enable it only as of the current or future date. If you update an assignment as of a past date the values from the new position won't be updated in the assignment. For example, if you create a transfer as of a past date before enabling position synchronization, the values from the new position won't be updated in the assignment.

You can specify a parent position when you enable HCM position hierarchy using the Manage Enterprise HCM Information task in the Setup and Maintenance work area. A parent position is one, which is the next position up in the position hierarchy.

On the Manage Positions page, click the parent position link to view the position details and click the icon next to the parent position to refresh the search with the parent position.

As a prerequisite, you specify a parent position to synchronize the line manager from the parent position. When you select to synchronize the line manager using the position hierarchy the incumbent in the parent position is populated as the new manager.

In an assignment, the standard working hours are inherited from the position. The working hours and the standard working hours provided in the position are used to calculate the FTE (Full Time Equivalent) in the assignment. If there is a FTE value already existing in the position, you can choose to update it based on the ratio of the working hours to standard working hours.

When position synchronization is enabled, even if FTE value exists for the position, it is not copied to the assignment during synchronization. Instead, the assignment FTE value is calculated as a ratio of working hours to standard working hours, if specified.

What happens when grades are synchronized?

The profile options to default or enforce valid grades are ignored when grades are synchronized.

If multiple valid grades exist at the position, then you can select an appropriate grade in the assignment. If you hire a person into the position, which has an entry grade specified, then the entry grade will be the default value in case of multiple valid grades.

If the assignment has both position and job, then synchronization from the position always takes precedence and the values at the job will be ignored. Let's say you haven't defined any valid grades for the position. However, valid grades are defined for the job and the assignment has a position. Then any valid grades for the job are ignored.

How can I exclude some assignments from position synchronization?

If you want to use position synchronization only for a section of workers, you need to enable position synchronization at the legal employer level.. To exclude some assignments from synchronization, select Allow Override at the Assignment in the Position Synchronization Configuration section on the Manage Enterprise HCM Information page.

To exclude a specific assignment from synchronization, select No in the Synchronize from Position field in the assignment (even if override is allowed). All read-only fields become editable but the assignment won't be synchronized and will no longer inherit any changes made at the position level. However, it isn't possible to exclude only some synchronized attributes.

How do I override position synchronization at the attribute level?

If you want to capture a different value for one attribute only, leave that attribute blank at the position. Let's say the location attribute is synchronized from the position but except in a few cases it doesn't matter into which location the person is hired, then you can leave the location field blank at the position. Since blank values aren't synchronized, the location will be editable in the assignment enabling you to select a value manually.

What happens if I select Synchronize Mapped Flexfields?

When you select this option, assignment flexfields are synchronized with the mapped position flexfields.

You must first map position flexfields to assignment flexfields using the Manage Assignment Flexfield Mapping task in the Functional Setup Manager, and then select this option in the Manage Enterprise HCM Information task. When position synchronization is enabled, the position flexfields are inherited in the assignments.

Grades

From the Manage Grades page, create grades to record the level of compensation for workers. You can:

  • Create grades for multiple pay components, such as salary, bonus, and overtime rates

  • Define one or more grades that are applicable for jobs and positions

This list of valid grades, combined with the settings for two profile options, enables you to restrict the grades that can be selected when you set up assignments for a worker.

Grades and Sets

You assign each grade to a set. If you assign a grade to the common set, then the grade is available for use in all business units. To limit a grade to a single business unit, you can assign it to a set that's specific to that business unit.

Grade Steps

Grade steps are distinct increments of progression within a grade. You can set up grades with or without grade steps.

The following figure illustrates the difference between grades with and without steps.

A figure comparing grades with steps and grades without
steps for a pharmacy technician.

Grade Rates

Grade rate values are the compensation amounts associated with each grade. You can set up rates at the same time that you create grades, or set them up independently from grades.

For grades with steps, you set up the step rates when you include them in a grade ladder. Grade rates are optional.

Grade Ladders

You can combine grades into grade ladders to group your grades or grades with steps in the sequence in which your workers typically progress. For example, you might create three grade ladders for your enterprise: one for technical grades, another for management grades, and a third for administrative grades.

Grade rates contain the pay values that are related to each grade.

Grade rate values can be either a fixed amount or a range of values, and you can set up rates for different types of pay such as salary, overtime, and bonuses.

Note the following:

  • Grade rates for some jobs or positions might include an hourly salary rate and an overtime rate.

  • Grade rates for other jobs or positions might contain a salary rate type with a range of amounts and a bonus rate type with a fixed amount.

  • Grade rates typically serve only as a guideline to validate that the salary you propose during the compensation process for a worker on a certain grade is appropriate for that grade.

This figure illustrates a grade that has two rate types associated with it:

  • Salary rate type that has a range of values

  • Bonus rate type with a fixed amount

A figure that shows a salary rate type with a range of
values, and a bonus rate type with a fixed value for the grade Admin01.

This figure illustrates a different grade that has two rate types associated with it:

  • Salary rate type that has a fixed amount

  • Overtime rate type that also has a fixed amount

A figure that shows a salary rate type that's a fixed
amount, and an overtime rate type for the grade Tech02.

Rate Types

The types of rates that you can set up depend on the values for lookup type GRADE_PAY_RATE_TYPE. Examples of rate types are salary, bonus, and overtime pay.

Grade Rates and Legislative Data Groups

You assign a legislative data group to each grade rate. Depending on how your enterprise is configured, you may have several legislative data groups. You can set up grades that are shared across different areas of your business, and enter rates that are specific to each legislative data group.

Grade Rates and Grades

You can do the following:

  • Set up grade rates when you set up grades

  • Set up grade rates independently from grades

For grades with steps, you enter rates when you attach the grades to a grade ladder.

Grade ladders group grades and grades with steps in the sequence in which your workers typically progress. You create grade ladders either from the Manage Progression Grade Ladders page (in the Compensation work area) or from the Manage Grade Ladders page (in the Workforce Structures work area).

Grade ladders describe the grades and steps to which a worker is eligible to progress and compensation value associated with that grade and step. You may create different grade ladders for your enterprise: one for technical grades, another for management grades, and a third for administrative grades.

Ladders with Grades

You create ladders with grades by building a hierarchy of grades that were created without steps. When you set up this type of ladder, only grades without steps are available to add to the ladder. You can't create a grade ladder with a combination of both grades and grades with steps.

You don't define any grade rates when you set up a ladder with grades; the rates for the grades within the ladder are inherited from the rates that were added when you set up the grades. To add or edit rates for grades, you must use the Manage Grade Rates task.

Ladders with Grade Steps

You create ladders with grade steps using grades that were created with steps. When you set up this type of ladder, only grades with steps are available to add to the ladder.

You define step rates when you set up the ladder, and the rates are unique to each ladder. You can't share step rates between grade ladders.

You can use the grade ladder in the worker assignment to ensure that workers are compensated according to the grade structure defined in the job or position.

Selecting Grade Ladder for Worker Assignment

Transactions, such as New Hire, Add Assignment, and Create Work Relationship involve creating a new assignment. During assignment creation, the grade ladder is automatically populated based on the selected job or position. This isn't true for transactions that involve an assignment update (for example, promotion, transfer). You must manually select the grade ladder when you update the assignment.

Note: The Grade Ladder field isn't displayed if a grade ladder isn't defined for the worker organization.

You must select from the grades populated for the grade ladder. If the selected grade includes steps, you can view the steps and the associated salary rates by clicking the Grade Details icon. The step rate is displayed based on the legislative data group associated with the assignment business unit.

The grade step progression process evaluates a worker's eligibility to progress to a new grade or step based on the defined rules and updates the salary rate. The process can be run for workers associated with a particular grade ladder to move them to a new grade or step and update their salary rate.

If the grade ladder selected in the assignment is associated with an automatic grade step progression process, you can exclude the worker from the process. To exclude the worker, deselect the Include in grade step progression check box.

Note: The Include in grade step progression check box isn't displayed if a grade ladder isn't defined for the worker organization.

You assign grades to sets, and grade rates to legislative data groups from the Workforce Structures > Manage Grade Rates page.

If you have grades that are common across multiple business units, you can:

  • Assign them to the set that's associated with business units.

  • Set up grade rates that are specific to each legislative data group.

The following figure illustrates how you can use sets to share grades across multiple business units and change the grade rates for each legislative data group.

A figure that shows five grades that are assigned to
one set which are shared by the US, UK, and Australia legislative
data groups. Each legislative data group has the same set but different
rates.

Grades and Sets

Sets enable you to share grades that are common across business units in your enterprise. You can assign grades to either a specific set or to the common set to each grade. If you assign the grade to the common set, then the grade is available for use in all business units.

Grade Rates and Legislative Data Groups

Grade rate values are associated with each component of compensation for your workers. While grades may be common across different areas of your enterprise, grade rates vary among the countries in which you employ people.

For example, if your enterprise has engineer jobs in the United States, the United Kingdom, and Australia, you can set up grades for a set that's shared between the countries, but set up different grade rates for each country in the applicable currency.

You use grades and grade rates in the following components of Oracle Fusion HCM to ensure that workers are compensated according to the grade structure that you create:

  • Jobs

  • Positions

  • Assignments

  • Compensation

  • Payroll

How Grades Work with Jobs and Positions

You can define one or more grades that are applicable for each job and position. Using this list of valid grades, combined with the settings for two profile options you restrict the grades that can be selected when you set up assignments for a worker.

Note the following:

  • If you use positions, then the grades that you assign to jobs are the default grades for the positions that you associate with each job.

  • You can use the default grades for the position, remove ones that don't apply, or add new ones.

How Grades Work with Assignments

When you set up assignments, you can select the applicable grade for the job or position.

Two profile options determine the grades that are available for selection:

Profile Option Description

PER_ENFORCE_VALID_GRADES

If you set this site-level profile option to Yes:

  • Users can select a grade only from the list that you defined for the job or position.

    • If users select both job and position for the assignment, they can select grades that are valid for the position only.

    • If valid grades are defined for neither job nor position, then users can select from all grades.

    If you set this site-level profile option to No:

  • User can select from all the grades

  • This is also the default value

PER_DEFAULT_GRADE_FROM_JOB_POSITION

If you set this site-level profile option to Yes and there is only one valid grade for a job or position:

  • The grade is used by default in the assignment.

    • If an entry grade is defined for a position, then that grade is used by default when the user creates a new assignment.

    If you set this site-level profile option to No:

  • User can select from all the grades

  • This is also the default value

How Grades and Grade Rates Work with Compensation and Payroll

Depending on the configuration of the legal employer to which workers belong, their salary can be stored at the assignment level. The grade rate can be linked to the salary basis within the salary record, in which case their salaries are validated using the grade rates.

For example, assume an assignment record for a worker indicates they're in Grade A1 with the salary of USD 40000.00:

  • The grade rate range that's attached to Grade A1 is 30,000.00 USD to 50,000.00 USD. Therefore, the salary is within the grade rate range and no warnings are issued.

  • If their manager or a human resource (HR) specialist changes their salary to 55,000.00 USD, a warning is issued that the new salary is outside their salary range.

In addition, compa-ratios and salary range positions for workers are calculated using the minimum and maximum amounts that are defined in the grade rates for their grades.

Payroll elements reference grades in the eligibility criteria. For example, assume you want to process a bonus for all workers who are at grade level A2. To accomplish this, you would create an earnings element for the bonus and specify A2 for the grade in the eligibility criteria. The result of this setup, when combined with additional eligibility criteria that may be applied by the bonus plan, is that when payroll is processed, workers who are at grade level A2 and who meet the additional eligibility criteria would receive the bonus.

The following examples illustrate how InFusion Corporation might set up different types of grades, rates, and ladders for the different types of jobs within the company. The examples include grade structures for administrative workers, managers, senior executives, and line workers. All amounts in the examples are US dollars.

Grades with Steps

The grade structure for annual salary amounts for administrative workers in InFusion Corporation includes five grades, and each grade includes five steps.

  • When workers move from one grade to another in this ladder, they don't always start at step 1 of a grade.

  • The next step is based on their previous salary plus two steps.

For example, a worker could move from Step 5 in Grade 1 to Step 3 in Grade 2.

The following table lists the five grades, steps, and the rates associated with them for administrative workers at InFusion Corporation.

Grade Step 1 Step 2 Step 3 Step 4 Step 5

1

17, 803

18, 398

18, 990

19, 579

20, 171

2

20, 017

20, 493

21, 155

21, 717

21, 961

3

21, 840

22, 568

23, 296

24, 024

24, 752

4

24, 518

25, 335

26, 152

26, 969

27, 786

5

27, 431

28, 345

29, 259

30, 173

31, 087

To set up your grade structure to reflect this table, perform the following tasks:

  • Set up five different grades and add five steps for each grade.

  • Set up a grade ladder using the Grades with Steps type, and select all five grades.

  • Set up step rates for annual salary amounts using the rates in the preceding table.

Grades Without Steps

The grade structure for annual salary amounts for level 3 managers at InFusion Corporation includes grades without steps. The grade rates are fixed amounts.

The following table lists the grades and associated rates for level 3 managers at InFusion Corporation.

Grade Annual Salary Amount

1

103, 900

2

111, 800

3

119, 900

4

127, 800

5

135, 900

6

143, 700

7

151, 800

8

155, 500

To set up your grade structure to reflect this table, perform the following tasks:

  • Set up eight separate grades.

  • For each grade, enter the rates from the preceding table.

  • Set up a grade ladder with the Grades type and add all eight grades to the ladder.

Grades with Grade Rate Ranges

The grade structure for annual salary amounts for senior executives at InFusion Corporation includes grades with no steps, and the rates are set up using ranges.

The following table lists the rate range for senior executives at InFusion Corporation.

Grade Minimum Annual Salary Amount Maximum Annual Salary Amount

SNREXEC

154, 300

243, 900

To set up a grade structure to reflect this table, perform the following tasks:

  • Create a single grade.

  • Create a grade rate and enter the minimum and maximum amounts from the preceding table for the grade rate range.

Grade Rates with Hourly Amounts

The grade structure for line workers at InFusion Corporation includes grades with steps, and the rates are hourly amounts.

The following table lists the hourly rates for line workers at InFusion Corporation.

Grade Step 1 Step 2 Step 3 Step 4 Step 5

1

10.64

11.07

11.49

11.96

12.40

2

11.77

12.27

12.76

13.24

13.72

3

12.92

13.46

13.98

14.55

15.07

4

14.03

14.63

15.21

15.80

16.39

5

15.20

15.83

16.46

17.12

17.75

To set up your grade structure to reflect this table, perform the following tasks:

  • Create five grades, each with five steps.

  • Set up a grade ladder using the Grades with Steps type, and select all five grades.

  • Set up step rates for hourly amounts using the rates in the table.

Create Grades, Steps, and Ladders

In this example, you're an HR Specialist adding new technicians at different grade levels. You need to set up 3 new grades for the new technicians, with 4 steps for each grade.

Let's look at the steps to update the key values for the new grades, steps, and ladders. For other fields, you can use the default values.

Create Grade

  1. On your Home page, select My Client Groups > Compensation > Manage Grades.

  2. Click Create in the Search Results

  3. In the Effective Date field, enter 1/1/2010

  4. In the Grade Set field, select Common.

  5. Enter these values.

    Field Value

    Name

    Technician 01

    Code

    Tech01

    Similarly create grades with the following names and codes

    Name Code

    Technician 02

    Tech02

    Technician 03

    Tech03

  6. Click Next.

Add Steps

  1. Verify if the grade information is correct.

  2. Click Add row 4 times

  3. Enter these values.

    Step Number Step Name

    1

    Level 1

    2

    Level 2

    3

    Level 3

    4

    Level 4

  4. At step number 4, select the Ceiling Step option

  5. Repeat step 3 for Technician 02 and Technician 03 grades.

  6. Click Next.

  7. Click Next to skip the Grade Rates section.

  8. Review the grade details and click Submit.

  9. Click the back arrow on the Manage Grades page.

Add Grade Ladders

  1. Click My Client Groups > Compensation > Progression Grade Ladders

  2. Click the Create Grade Ladder button.

  3. Enter these values

    Field Value

    Effective Start Date

    1/1/2010

    Grade Set

    Common Set

    Name

    Technician Grade Ladder

    Legislative Data Group

    US Legislative Data Group

    Status

    Active

    Progression Increment

    Grade and step

    Assignment Action

    Automated Grade Step Progression

    Include Salary Updates

    Yes

    Currency

    US Dollar

    Frequency

    Monthly

    Annualization Factor

    12

  4. Click OK.

  5. Click Save.

  6. Click OK.

  7. Click the Grade and Steps link.

  8. In the Grade and Steps page, click Action and select Add Grade.

  9. In the Grade Name field, select Search.

  10. In the Grade Code field, enter Tech and click Search.

    Since he Progression Increment is set to Grade and step, only grades with steps are listed

  11. Select the Technician 01 grade and click OK.

  12. In the Sequence field, enter the appropriate sequence number (1-4).

  13. Repeat steps 3-6 for other grades as well.

  14. Expand the grades and enter these values for the steps.

    Field Value

    Technician 01

     

    Level 1

    2250

    Level 2

    2500

    Level 3

    2750

    Level 4

    3000

    Technician 02

     

    Level 1

    3250

    Level 2

    3500

    Level 3

    3750

    Level 4

    4000

    Technician 03

     

    Level 1

    4250

    Level 2

    4500

    Level 3

    4750

    Level 4

    5000

  15. Click Save and Close.

This example illustrates how to use a grade ladder to create a pay scale that's typical of technicians in the metal industry in Germany. The ladder includes four grades, and each grade includes four steps.

The following table summarizes key decisions for the grades, rates, and grade ladder in this scenario.

Decision to Consider In This Example

Are steps required for the grades?

Yes.

Which step in each grade should be the ceiling step?

The last step in each grade.

What type of rates are necessary?

Salary rates only.

Will the ladder be created using grades or grades with steps?

Grades with steps.

Summary of the Tasks

To set up the pay scale, complete these tasks:

  • Create grades

  • Create a grade ladder

Create Grades

  1. Under My Client Groups, In the Workforce Structures work area, click Manage Grades to open the Manage Grades page.

  2. On the Manage Grades page, click Create to open the Create Grade: Grade Details page.

  3. In the Grade Details region of the Create Grade: Grade Details page, complete the fields as shown in this table, using the default values unless otherwise indicated.

    Field Value

    Grade Set

    Common

    Name

    Technicians 03

    Code

    Tech03

  4. Click Next to access the Create Grade: Grade Steps page.

  5. In the Grade Steps region of the Create Grade: Grade Steps page, click Add Row.

  6. Add four steps for the grade by completing the fields as shown in this table. You must click Add Row after adding each step.

    Field Value

    Step Name

    Year 1

    Step Name

    Year 2

    Step Name

    Year 3

    Step Name

    Year 4

  7. Verify that Year 4 is the ceiling step.

  8. Click Submit. You will add the grade rates when you create the grade ladder.

  9. In the Warning dialog, click Yes.

  10. In the Confirmation dialog, click OK.

  11. Repeat steps 2 through 9 to add three more grades with steps. Complete the information for each grade using the information in these tables. The ceiling step in each grade is Year 4.

    Field Grade 2 Grade 3 Grade 4

    Grade Set

    Common

    Common

    Common

    Name

    Technicians 04

    Technicians 05

    Technicians 06

    Code

    Tech04

    Tech05

    Tech06

    Field Value

    Step Name

    Year 1

    Step Name

    Year 2

    Step Name

    Year 3

    Step Name

    Year 4

Create a Grade Ladder

  1. In the Workforce Structures work area, click Manage Grade Ladders to open the Manage Grade Ladders page.

  2. On the Manage Grade Ladders page, click Create to access the Create Grade Ladder: Grade Ladder Details page.

  3. In the Grade Ladder Details region of the Create Grade Ladder: Grade Ladder Details page, complete the fields as shown in this table, using default values unless otherwise indicated.

    Field Value

    Grade Set

    Common

    Name

    Metal Technicians

    Grade Type

    Grade with steps

  4. Click Next to access the Create Grade Ladder: Grades page.

  5. In the Search Grades region of the Create Grade Ladder: Grades page, enter TECH in the Code field and click Search.

  6. Select Tech03 and click Add to Grade Ladder.

  7. Select Tech04 and click Add to Grade Ladder.

  8. In the Add to Grade Ladder Hierarchy dialog, select At the top and click OK.

  9. Select Tech05 and click Add to Grade Ladder.

  10. In the Add to Grade Ladder Hierarchy dialog, select At the top and click OK.

  11. Select Tech06 and click Add to Grade Ladder.

  12. In the Add to Grade Ladder Hierarchy dialog, select At the top and click OK.

  13. Verify that the grades appear in numerical order, with Tech06 at the beginning of the ladder and Tech03 at the end of the ladder.

  14. Click Next to access the Create Grade Ladder: Rate Values page.

  15. On the Create Grade Ladder: Rate Values page, select the legislative data group for Germany.

  16. In the Grade Step Rates region, click Add Row.

  17. Complete the following fields as shown in this table.

    Field Value

    Name

    Technician Ladder Rates

    Rate Type

    Salary

    Frequency

    Monthly

    Annualization Factor

    12

    Currency

    EUR

  18. In the Step Rate Values region, enter rates for the four steps in each grade by completing the fields as shown in this table.

    Grade Name Step Name Value

    Technicians 03

    Step 1

    1,750.73

    Technicians 03

    Step 2

    1,878.90

    Technicians 03

    Step 3

    2,009.79

    Technicians 03

    Step 4

    2,143.92

    Technicians 04

    Step 1

    2,238.57

    Technicians 04

    Step 2

    2,408.39

    Technicians 04

    Step 3

    2,577.68

    Technicians 04

    Step 4

    2,744.81

    Technicians 05

    Step 1

    2,831.87

    Technicians 05

    Step 2

    3,047.14

    Technicians 05

    Step 3

    3,257.52

    Technicians 05

    Step 4

    3,469.00

    Technicians 06

    Step 1

    3,586.36

    Technicians 06

    Step 2

    3,851.38

    Technicians 06

    Step 3

    4,122.34

    Technicians 06

    Step 4

    2,143.92

  19. Click Next.

  20. On the Create Grade Ladder: Review page, review the grade ladder hierarchy and the rates, and click Submit.

  21. In the Warning dialog, click Yes.

  22. In the Confirmation dialog, click OK.

This example illustrates how you can use grades, rates, and a grade ladder to represent spine points. You manage grade ladders using the Manage Grade Ladders task in the Workforce Structures work area.

Spine Points

Some public sector organizations in the United Kingdom (UK) use spine points to structure their grades. Each spine point corresponds to one or more steps within a grade, as grades often overlap each other.

Grade Structure

You can use grade ladders to meet the requirements of a grade structure with spine points. The following table illustrates a grade structure with spine points that's similar to the one used for university workers in the UK.

A table that shows spine points from one to seventeen
and the grades and salaries associated with each point. Each spine
point corresponds to a grade step within a grade.

Analysis

To set up grades for the spine point structure, you must:

  • Create three grades with steps and name each step using the spine point number.

  • Create a grade ladder with all three grades.

  • Create step rates with annual salary amounts.

Resulting Grades, Rates, and Grade Ladder

The following table lists the grades and steps needed to meet the requirements of the grade structure with spine points.

Grade Name Steps Ceiling Step

Grade 1

  • Spine Point 1

  • Spine Point 2

  • Spine Point 3

  • Spine Point 4

  • Spine Point 5

  • Spine Point 6

Spine Point 5

Grade 2

  • Spine Point 6

  • Spine Point 7

  • Spine Point 8

  • Spine Point 9

  • Spine Point 10

  • Spine Point 11

  • Spine Point 12

Spine Point 11

Grade 3

  • Spine Point 12

  • Spine Point 13

  • Spine Point 14

  • Spine Point 15

  • Spine Point 16

  • Spine Point 17

Spine Point 17

The following table lists the grades, steps, and rates to add to the ladder.

Grade Name Steps Rates

Grade 1

  • Spine Point 1

  • Spine Point 2

  • Spine Point 3

  • Spine Point 4

  • Spine Point 5

  • Spine Point 6

  • 25, 674

  • 26, 631

  • 27, 068

  • 27, 796

  • 30, 394

  • 31, 778

Grade 2

  • Spine Point 6

  • Spine Point 7

  • Spine Point 8

  • Spine Point 9

  • Spine Point 10

  • Spine Point 11

  • Spine Point 12

  • 31, 778

  • 32, 648

  • 33, 542

  • 34, 466

  • 35, 425

  • 38, 441

  • 39, 510

Grade 3

  • Spine Point 12

  • Spine Point 13

  • Spine Point 14

  • Spine Point 15

  • Spine Point 16

  • Spine Point 17

  • 39, 510

  • 40, 634

  • 41, 746

  • 42, 914

  • 44, 118

  • 45, 358

FAQs for Grades

You can edit rates using the Manage Grade Rates task. However, you can't edit rates within the Manage Grades task, because grades and rates have separate effective dates.

Rates can be added to a grade with steps, when you add the grade to a grade ladder.

Grade ladders group grades and grades with steps in the sequence in which your workers typically progress. Progression grade ladders are hierarchies used to group grades and steps and define their sequence. They include the associated progression rules and rates for each grade and step within the ladders. Oracle Fusion Human Capital Management has both a Grade Ladder and a Progression Grade Ladder For a specific grade ladder definition; you should use one of these, but not both.

The differences between them are:

Progression Grade Ladders Grade Ladder
  • Viewed in Manage Progression Grade Ladders page in Compensation work area

  • Required if you're using grade step progression or rate synchronization processes

  • Enables population of worker salary record from grade or step rates during employment transactions

  • Only one rate (grade rate or step rate) allowed per progression grade ladder

  • Associated with a single legislative data group

  • Viewed in Manage Grade Ladders page in Workforce Structures work area

No. If you need to change the legislative data group for a grade rate, you must change the grade rate to inactive and create a new grade rate with the correct legislative data group.

The grade ladder hierarchy consists of grades. You can move the grades up and down within the hierarchy, and add or remove grades. You can click any grade to view the details.

A ceiling step is typically the highest step within a grade to which a worker may progress. When a worker reaches the ceiling step within a grade, typically any further progress must be made by moving the worker to another grade. You can override the ceiling for individual assignments.

In most cases, the ceiling step is the last step in the sequence. For example, if the grade has steps 1 through 5, step 5 is the ceiling step. However, you may have situations where you want another step to be the ceiling. For example, in a grade with steps 1 through 5, you might indicate that step 4 is the ceiling step, and workers can progress from step 1 to step 4, and then on to the next grade. You can use step 5 when a worker isn't entitled to move to the next grade, perhaps because he doesn't yet have the required qualifications or certificates, but you still want to increase his pay to reward him for many years of experience and good performance. You can provide the pay increase by moving him to step 5.

Quick Actions

Quick actions are links on the Home page that enable you to initiate actions quickly on yourself, your team, or your client groups. You can view the quick actions grouped under the following tabs:

  • Me - This tab lists actions to manage your own information.

  • My Team - This tab lists actions to manage your team.

  • My Client Groups - This tab lists actions to manage people within your area of responsibility.

Click the Show More link to view all the available actions grouped under a specific head.

The set of actions that you see are displayed based on your security privileges. The people that you can act on differ based on the tab you're on. Consider that you're both a line manager and an HR Specialist. You can access the Promote action from both the tabs: My Team and My Client Groups. Also, you will see a different set of employees on each tab whom you can promote. You can promote only your direct reports using the Promote task in the My Team tab. You can promote only those employees that you have access to as an HR Specialist, using the Promote task in the My Client Groups tab.