Workday Compensation Framework

• Compensation administrators define compensation components and maintain the compensation framework.
• This requires a strong understanding of compensation design and management.
• The compensation framework includes compensation packages, grades, plans, compensation elements, and business processes.

Chapter 1 Objectives

• Summarize the compensation framework in Workday
• Compare compensation partner and administrator security groups
• Identify and explain configuration options in the Edit Tenant Setup-HCM task

Compensation Overview

• Workday tracks compensation at both enterprise and individual worker levels.
• Compensation framework organizes grades and plans into packages.
• Compensation grades offer guidance for pay ranges.
• Grade profiles allow localization of pay ranges.
• Compensation plans define various types of pay components.

Compensation vs. Benefits

• Compensation is a financial reward for services, while benefits are nonfinancial rewards.
• Compensation includes cash in paycheck; benefits do not.
• Management negotiates and approves compensation and employees assign, elect, or waive benefits.

Benefits and Pay Hub

• Workday's Benefits and Pay Hub offers a single location for employees to review and manage their benefits, compensation, and payroll information and enables employee self-service.
• It requires enabling specific security domains and can be configured with announcements, links, and cards.

Compensation Partners and Administrators

• The compensation partner and compensation administrator security groups usually have different responsibilities.
• Compensation Partners view HR and compensation data for their workers, initiate/view compensation events, and view contact information.
• Compensation Administrators view HR/compensation data for all employees, initiate/view compensation events, set up compensation components.

Tenant Setup - Workday HCM

• Compensation configurations are located in the Edit Tenant Setup - HCM task.
• Enable Compensation Setup Segment Security divides access to compensation setup data among administrators.
• Enable Multiple One-Time payments enables multiple one-time payments for a worker within a single business process.
• Route Business Processes Based on Costing Overrides routes business process steps to managers associated with worktags.
• Use Calculate 100% FTE for Pay Range Comparisons allows comparison of part-time workers to full-time equivalents if full-time pay ranges are used.

Chapter 2 Objectives

• Design compensation eligibility rules
• Analyze weak and effective eligibility rules
• Identify where to place eligibility rules
• Test compensation eligibility rules

Compensation Eligibility Rules

• Compensation eligibility rules determine an employee's eligibility during compensation transactions.
• Eligibility defined using organizations, job profiles, business sites, positions, or class report fields.

Compensation Eligibility Rules: Three Phases

• Plan: Determine which compensation components should be available for each employee.
• Actuals: Staffing events determine which compensation components an employee is participating in.
• Payout: Payroll and compensation elements determine how compensation pays out.

Common Rule Criteria

• "AND" or "OR" logic
• If two rules are attached to the same compensation component, the system uses "OR" logic between them.

Data Dependency

• As compensation configurations are set up, it's important to consider whether the system defaults compensation data or if it is manually entered.

Using Eligibility Rules in Compensation

• Assign compensation targets to employees.
• Create exception rules for the compensation review process.
• Roll out or remove compensation plans for a target population.

Testing Compensation Eligibility Rules

• Use the Test Compensation Eligibility Rule task to see how a rule applies to specific instances.
• Use the Employee Compensation Audit report to analyze which employees are: eligible and assigned to a compensation component, eligible but not assigned, or ineligible and assigned.
• Use the Compensation Rule Assignment report to view assignments; returns a sample of 50 eligible employees by position.

Performance Considerations for Eligibility Rules

• Select source fields with the fewest instances.
• List conditions that exclude the largest number of instances first.
• Use filters, subfilters, and related objects in condition rules.

Eligibility Rule Plan Profile Processing

• You can choose to enable a tenant setting that increases performance in Workday for eligibility rule evaluation on compensation plan profiles.
• The functionality is enabled from the Edit Tenant Setup - HCM task.

Chapter 3 Objectives

• Compare position compensation, requisition compensation, and offer compensation transactions
• Identify the differences of defaulting behavior during a hire and a job change
• Summarize the importance of order precedence between the different compensation defaulting methods

Default Compensation Overview

• Defaulting reduces data entry error and allows for exceptions.
• Compensation can default from a position, job management supervisory organization, job requisition, or the offer process.

Defaulting Compensation Rules

• Compensation components must be assigned eligibility rules.

Defaulting Behaviors During Staffing

• If a worker is eligible for a package that contains a plan, defaulting occurs.
• If the worker is only eligible for the plan, but the plan is not in a compensation package, defaulting does not occur, but the plan is available to select.
• There is a differentiation between component eligibility and plan participation.

Compensation Defaulting Methods

• Defaulting can be set up using eligibility rules, grades on job profiles, default compensation on position, default compensation on requisition, or default compensation on offer.

Associating Compensation Grades with Job Profiles

• Grades can default using the eligibility rule framework or can be attached to job profiles.
• It is best practice to use the eligibility rule framework and keep the Compensation Grade Profile field blank.

Defaulting from Position Compensation

• Both have the goal of pre-populating compensation data during staffing, however, positions use the system to pre-populate the information.
• Position information is often used for positions that have budgets.

Position Compensation Defaulting - What Happens?

• Eligibility rules determine if the values populate.
• Job compensation grade overwrites the eligibility rule.
• Grades can be used along with the position.

Compensation and Job Requisitions

• Standalone business processes or step
• Default compensation on the job requisition can be assigned.

Defaulting from Job Requisition Compensation

• Compensation components data entry fields on the job requisition.
• When staffing, compensation defaults into the field for editing.

Requisition Compensation Defaulting - What Happens?

• Requisition overrides both rules and position.

Defaulting from Offer Compensation

• Approved offer compensation overrides eligibility rules, position compensation, and requisition compensation.

Autocomplete Compensation with Offer/Employment Agreement

• There is an option to autocomplete compensation rather than manually entering data during the hiring process.

Order of Precedence

• Employees eligible for only one package, grade, grade profile inside the grade
• Plans default needing to be inside a package

Chapter 4 Objectives

• Define compensation basis and map usage in reports and analytics.
• Administer compensation basis.
• Describe the Manage by Basis Total (MBT) compensation basis.
• Configure an MBT compensation basis.

Compensation Basis Overview

• Compensation basis feature allows definition of estimation for bonus, stock, allowances, period salary, and merit increase.

Compensation Basis Types

• Total Base Pay: Total of pay elements in employee's grade/profile
• Total Salary and Allowances: Total of all salary and allowance plans on position
• Eligible Earnings Override: Field to define currency amount used for bonus/stock calculations

Configurable Compensation Basis

• The configurable compensation basis provides the use of the enterprise interface builder.

Steps to Create/Manage Configurable Compensation Basis

• Access the Create Configurable Compensation Basis
• Select plans to include in basis
• Evaluate ranking with other bases
• Run Employees Missing a Compensation Basis report, to verify employees have correct eligible bases

Ways to Edit Compensation Basis

• Fields able to alter: Name, Eligibility Rule, Functional Area, Use to View Compensation, and Ranking.

Chapter 5 Objectives

• Explain compensation elements and element groups
• Identify used compensation components
• Demonstrate various methods for creating grade profiles

Element and Element Groups

• Compensation administrator responsible to map and maintain.
• May need element per plan

Compensation Element - Important Points

• In payroll, earnings control tax calculations, gross up ability, and scheduling payments.
• How you map compensation to payroll is important as it controls pay calculations and what a paycheck shows
• From payroll and compensation, a good one-to-one element to pay earning is important

Chapter 8 Objectives

• Create and initiate a one-time payment plan.
• Define referral plan options.
• Use segmented security on plans.

One-Time Payments Overview

• Used for spot bonuses, employee assistance, and referral.
• To have payroll process, assign worktag.

One-Time Payments - Important Points

• A "Category" is selected from the Maintain One-Time Payment Plan Configurable Categories options.
• When a gross amount is inputted, use "Gross Up" so they receive amount, but adjust to taxes paid.

Referral Plans

• Is a type of One-time payment.
• Have eligibility rules to make sure to receive bonus if eligible.
• Set up a "Reason Code" in the Maintain Plan Category for reporting.

Initiating One-Time Payment

• Use the "Related Actions" Task.

Security with One-Time Payments

• Use "Segmented Security" for a specific group.
• Segmented Security is available for items such as packages and grades.

Chapter 9 Objectives

• Initiate a hire event and analyze compensation how defaults.
• Compare procession for a new hire versus rehire.
• Identify troubleshooting strategies.

Compensation Overview

• There are three business processes available when using compensation.

Business Processes for Compensation

• Hire
• Change Job
• Compensation Assignment

Propose Compensation Hire

• Subprocess that will default the information during the time of hiring.

Propose Compensation Changes

• Business process that defaults comp structure and can let you edit comps.

Propose Compensation Offer/Employment

• Utilizes the data inside recruiting from the application process, then automatically flows data to the Propose Compensation hire process.

Propose Compensation-Important Points

• Understand that Defaulting is important, but if you do not have correct eligibility configurations it will not correctly calculate.

Chapter 10 Objectives

• Describe MBT business, to give reason for having top down total
• Utilize Manage Basis (MBT) for new employee.
• View MBT calculations and information via Model Allocation report

Using Compensation Basis

• Great for holistic view of compensation. Has MBT functionality

Steps for MBT

• Setup in "Manage Basis Total" checkbox - to utilize function
• Add MBT compensation in the packages.
• Based on ranking set, MBT provides primary calculation of amount

Compensation Basis Calculation

• Use Manage Basis Total for top down.

Chapter 11 Objectives

• Identity the transactions that can trigger comp changes.
• Isolate correct out-of-order, to correctly reflect payment.

Propose Compensation

• Is a subprocess inside Change Job.
• If you are doing MBT, should include.

Editing Changes-Important Points

• When adding new plan for a plan, check to make sure employee is eligible
• Use the comments for history reference

Moving Into Position

• For a rehire, salary information will populate unless it does not exist with history.
• If this is case, system with default base amounts.

Currency-Important Points

• Under "Tenant Setup" a default is specified, must be configured when changing.

Additional Tips for MBT

• Use related documents to create and share information.

Compensation Grades and Grade Profiles

• A grade is a standard compensation range for a given job level. Workday requires a compensation range only for Toal Base Pay calculations. They are used as guidance if salary is outside the range.

Grade Hierarchies

• Hierarchies provide visibility of the compensation. Eligibility rules and other parameters can use these hierarchies.

One -Time payments

• A one - time payment plan is an award payment to individual employees. Unlike bonus payments, a one - time payment is not recurring.
• Examples of one - time payments include an employee referral, spot bonus, or signing bonus

Chapter : 1- Compensation overview

Introduction

• Maintains compensation frame works.
• Workday tracks compensations at both enterprise, and individual worker levels.

Main Objectives

• Summarize the compensation frame work in workday
• Configure key comp settings
• Compare component and admin security groups