6Grades

This chapter contains the following:

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.