Salary Amount Is Determined by Simple Components
With this type of salary basis, HCM specialists or managers itemize salary changes using simple components. For example, this $100 salary is made up of four itemizations.
Each component has its own characteristic and change history, and affects salary in a different way. For example, a component can be a fixed or user-enterable amount. Or it can be a fixed or user-enterable percentage of another component. And you can add the component to the overall salary, subtract it from the overall salary, or make it independent of the overall salary.
Example
Here's a person's initial salary determined by three simple components and how their manager uses theses components to adjust their salary a year later. On their first salary record, the HCM specialist defines their 25,000 USD salary, as shown here.
Component | Amount |
---|---|
Base | 20,000 |
Merit | 5,000 |
Location | 3,000 |
The next year, their manager adjusts their salary to 32,000 USD, as shown here.
Component | Amount |
Adjustment Amount |
Adjustment Percentage |
Prior Value |
---|---|---|---|---|
Base | 25,000 | 5,000 | 25 | 20,000 |
Merit | 5,000 | 0 | 0 | 5,000 |
Location | 2,000 | -1,000 | -33.33 | 3,000 |