Compensation for Administrators PDF

# Compensation for Administrators ## Chapter 2 - Compensation Eligibility Rules ### Overview Compensation eligibility rules are the driving force behind the compensation framework. These rules determine an employee's eligibility during compensation transactions. You commonly define eligibility usi...

# Compensation for Administrators ## Chapter 2 - Compensation Eligibility Rules ### Overview Compensation eligibility rules are the driving force behind the compensation framework. These rules determine an employee's eligibility during compensation transactions. You commonly define eligibility using a combination of organizations, job profiles, business sites, positions, or class report fields. ### Objectives By the end of this chapter, you will be able to: - Design compensation eligibility rules. - Analyze weak and effective eligibility rules. - Identify where to place eligibility rules. - Test compensation eligibility rules. ### Compensation Eligibility Rules Assign compensation to an employee through an individual compensation transaction or mass event. Whether you complete a transaction or a rollout, you can use compensation eligibility rules to automate the assignment of compensation components. Additionally, compensation can default directly using a position, job management supervisory organization, job requisition, or offer. These eligibility rules target and identify eligible populations. Specifically, rules that allow for variation in salary ranges or plan targets are based on criteria such as a worker's location or position. When you create compensation eligibility rules, use great consideration and detail. This creation process has three phases: 1. **Plan:** Eligibility rules determine what compensation components should be available for each employee. 2. **Actuals:** Staffing events determine which compensation components an employee is actually participating in. Using compensation eligibility rules to default compensation components reduces the risk of data entry error. You may still require manual entry or analysis to enter salary or hourly amounts, or to manually change the compensation defaults when needed. 3. **Payout:** Payroll and Compensation elements determine how compensation pays out. ### Common Rule Criteria There are approximately 50 delivered fields available as criteria for building compensation eligibility rules. You can use selected criteria fields and build "AND" or "OR" logic statements. If you attach two rules to the same compensation component the system will automatically use "OR" logic between the rules. | And/Or | Source External Field or Condition Rule | Relational Operator | Comparison Type | Comparison Value | |---|---|---|---|---| | Logic combining conditions | Single field or existing rule | Changes dynamically based on selection | Leave default unless comparing fields | Select eligible or ineligible values Yes/No | ### Data Dependency As you configure compensation, ask these important questions: - How does compensation data populate the system? Does it default or do you manually enter it? - Is it a manual process? If so, who is responsible for entering that data? - How is the data used? For example, you can use Pay Rate Type as eligibility criteria for a compensation component. You can link Pay Rate Type to a job profile so it defaults into the employee record when the hiring process completes. If Pay Rate Type does not autopopulate from the job profile, it must be manually entered. If you do not designate Pay Rate Type is a required field, you may miss data entry or enter it incorrectly. If the Pay Rate Type is missing, AND you use it in compensation eligibility rules, then defaulting does not occur. #### On Job Profile or Manually Entered | Pay Rate Type | Pay Group Automatic Assignment Rule | Compensation Eligibility Rule | |---|---|---| | Populated on job profile so it defaults during transactions. | Used as criteria to auto assign pay group or uses eligibility rule to default. | | An example of how you can use the pay rate type populated on a job profile as criteria to auto assign pay groups or use compensation eligibility rules to default. Validation rules on the Initiation or Review Employee Hire step of the Hire business process could ensure a field, such as Pay Rate Type, populates correctly. Other examples of important common criteria that default from the job profile are Management Level, Job Family, and Exempt/Non-Exempt. **Touchpoint:** When you add values, such as new locations or employee types, you must update rules and validations accordingly. ### Using Eligibility Rules in Compensation Additionally, you can use compensation eligibility rules to: - Assign unique compensation targets to different employee populations. You can use target profiles for compensation grades, grade profiles, and most plan types. You can assign targets for the following plans types: period salary, one-time payment, merit, bonus, stock, allowance, and commission. - Create exception rules for the compensation review process. - Roll out or remove compensation plans for a target population. - When rolling out a plan, the eligibility rule is based on who should be eligible in the future. The rules for compensation plans and the rollout process can be the same. - When removing a plan, you can use a targeted eligibility rule to only remove the plan for a specific population of employees. Alternately, you can use a rule identifying ALL employees to sweep the population, remove the plan from all employees' compensation, and allow for inactivation. ### Testing Compensation Eligibility Rules To control the compensation components that employees are eligible for, assign eligibility rules to the compensation components using the Assign Compensation Components to Rule task. A second option is to add eligibility rules directly to each compensation component. Use the Test Compensation Eligibility Rule task to select a specific instance, such as an employee's hire event, to run the rule against. If you expect that the employee is eligible for the compensation component the rule is attached to, then the result should be "yes." The results also display where the rule is currently in use. Use the Employee Compensation Audit report to analyze which employees are: - Eligible and assigned to a compensation component. - Eligible, but not assigned to a compensation component. - Ineligible and assigned to a compensation component. Use the Compensation Rule Assignment report to view the compensation components using the rule. This report also returns a sample population of 50 employees by position that are eligible for these components based on the compensation eligibility rule. ### Performance Considerations After testing and determining that a rule works, review the rule to evaluate its efficiency. There are many factors to keep in mind when creating an optimized eligibility rule: - Select source fields that have the fewest number of instances. - The order listed is very important. List conditions that exclude the largest number of instances first. Listing general rules first reduces the number of instances evaluated within each condition. This optimizes the efficiency of your rule. - Use filters, subfilters, and related objects in your condition rule. This allows you to filter out unnecessary data without using calculated fields. ### Eligibility Rule Plan Profile Processing You can enable a tenant setting to increase performance in how Workday evaluates eligibility rules on compensation plan profiles. From the Edit Tenant Setup - HCM task, in the Compensation section, select the Enable Eligibility Rule Performance Enhancement for Compensation Plan Profiles checkbox. This opt-in feature enables Workday to review the plan profiles randomly, rather than from top to bottom. The first plan profile that an employee meets the eligibility rule criteria for will default into the compensation-related transaction. Workday no longer evaluates all of the compensation plan profiles making processing more efficient. This feature is useful if your compensation plans have a large number of profiles. Before you enable this feature, review your plan profiles and ensure that the eligibility rules do not target overlapping employee populations. Once you enable this opt-in feature, you are unable to undo the tenant setting. ### Knowledge Check 1. True or False? The primary goal of a compensation eligibility rule is to define an eligible population and allow the system to correctly default compensation components during a staffing event. 2. Which of the following are not commonly used compensation eligibility rule criteria? - A. Job Profile - B. Job Family - C. Job Segments - D. Organizations - E. Location 3. What are three examples of how compensation eligibility rules can be used? (Select three correct answers.) - A. Default compensation plans. - B. Eligibility for grade profiles. - C. Initiate business processes. - D. Roll out and remove plans. - E. Define compensation partner role.