Overview of Salary Range Differentials

You can configure salary range differentials to adjust base salary ranges from the grade rate associated with the salary basis. Differentials vary, for example, to reflect the cost of living in different locations or the relative ease of hiring.

For example, you want to pay everyone working on the East Coast of the US at 1.1 times the standard grade rate. You want to pay everyone working on the West Coast at 1.2 times. You pay Central people the standard grade rate and everyone in the South at 0.8 times.

Select the level of granularity that best supports your salary policies and processes:

  • Location
  • Business unit
  • Location and business unit
  • Compensation zone
  • Compensation zone and business unit

Here are some additional configurations you can do with the compensation zone and compensation zone and business unit differentials:

  • You can configure grade rate versions to override the grade rate of the salary basis. The adjusted salary range is the range of the overriding grade rate.
  • You can configure the differentials to enforce relevant statutory limits around minimum salaries by setting lower limits. Also optionally specify which address types to use to identify the applicable differential. For example, you're going to associate the differentials with people who work at client sites and from home. And, you want to use their remote addresses, rather than their work addresses to identify their compensation zones and differential factors.

Compensation Zone Types

You use zone types, such as compensation or wage regions, to categorize zones and group them together. You need to create your zone types before you define one or more zones for a geographical boundary. You can create a zone type that contains geographical boundaries from anywhere in the world, or that contains only geographies in a specified country. When you create a zone type for a country, you can define which geography types or geographies you can select when you create the zones.

Compensation Zones

Zones are geographical boundaries for a zone type, for example, the San Jose compensation zone. Zones are based on the geography hierarchy data of the master reference. You create zones in a zone type and you can associate geographies to define the zone. For example, you have the Compensation Regions zone type. You create a West Coast zone that has the state of California as one of its geographies. In a geography, you can specify a postal range. So for the state of California, for example, you can specify that the zone spans the postal codes 90001 through 90011.

Reference

The Salary Range Differentials and Compensation Zones document explains how salary range differentials are processed. It also explains how to configure and apply zone-based differentials. The document (ID 2605772.1) is on My Oracle Support at https://support.oracle.com.