Configure Compensation Zone Types and Zones

Here's how you configure the compensation zone types used to group zones together and the zones that make up a zone type. Use the Compensation Zones task in the Compensation Management offering, Base Pay functional area.

Create the Compensation Zone Type

We recommend limiting the number of compensation zone types, preferably to 1, such as by postal code. Here's how you create a zone type:

1. On the Manage Zone Types page, click the Create icon.
2. Enter a name for the zone type.
3. Specify the boundary of the zone type.
4. Select the geography.
5. At the appropriate geographic level, such as Postal Code, select Zone Creation Allowed.

Caution: You need to make sure that geography validation is enabled for the No Styles Format address style of the selected geography level. Otherwise you won't see the adjusted salary ranges for individuals in this compensation zone. Use the Manage Geographies task and the Manage Geography Validation action.

Create a Zone

Configure your zones so that an address is part of only one zone. If an address is part of multiple zones, the salary changes that include zone-based differentials can't figure out which zone applies. Thus, they can't apply any differential. Also, configure the zones for a zone type at the same level to minimize or prevent zone overlaps. For example, if Zone 1 is at the State level, then define the other zones at the State level also.

Here's how you create a zone:

1. On the Manage Zone Types page, search for and select your new zone type. If you click the zone type, you open a read-only page with details of the zone type configuration. You can't add zones from that page.
2. Click Next.
3. On the Manage Zones for Zone Type page, click the Add icon.
4. On the Create Zone page, enter the general information.

5. Associate geographies with your new zone.

   1. Click the Add icon.
   2. On the Add Geography dialog box, search for and select the geography that you want to add.
   3. Click Save and Close.
   4. Review the start dates of the associated geographies. When you associated the geography, it automatically set the start date to the system date at that time. You can edit the date, as needed.
   5. When you finish associating geographies, on the Create Zone page, save and close your new zone.
6. When you finish adding zones to your zone type, on the Manage Zones for Zone Type page, save and close your zone type.

Best Practices When Using Postal Codes

If you've fewer than 5 postal codes, add the codes directly in the zone definition instead of using postal ranges. For example, add the 90009 postal code directly to the zone instead of adding it as the range, from 90009 to 90009.

Avoid defining overlapping geographies or postal code ranges across compensation zones. For example, you defined these postal code ranges:

• Compensation Zone 1 for CA with the range from 91000 to 91999
• Compensation Zone 2 for CA with the range from 91111 to 91729

In this case, the differential profile logic identifies both compensation zones for the 91112 postal code and thus won't apply any differentials for 91112.

Tip: The postal code data type is CHAR, so the zone ranges get calculated as character ranges, not numeric. For example, a zone with the postal range from 10 to 100 includes these postal codes: 11, 12, 13, and 14. It doesn't include these postal codes: 20, 21, 30, 31, 40, 90, 99.