Compensation for Administrators PDF

# Compensation for Administrators ## Chapter 9 - Propose Compensation Hire ### Overview In this chapter, you will demonstrate the compensation components in action. You will examine the process of hiring a new employee and rehire. Through the Propose Compensation for Hire subprocess, you will dem...

# Compensation for Administrators ## Chapter 9 - Propose Compensation Hire ### Overview In this chapter, you will demonstrate the compensation components in action. You will examine the process of hiring a new employee and rehire. Through the Propose Compensation for Hire subprocess, you will demonstrate defaulting behavior using eligibility rules, or through position, job requisition, or offer compensation. Most of the data will populate for you and only edits will be necessary. ### Objectives By the end of this chapter, you will be able to: - Initiate a hire event and analyze how compensation defaults. - Compare processing compensation for a new hire and rehire. - Identify troubleshooting strategies for defaulting compensation. ### Compensation Events You can initiate compensation as a single event for an individual worker or as part of a staffing change (e.g., hire, transfer). ### Compensation Subprocesses You can include the following compensation subprocesses in larger staffing events. | Compensation Subprocess | Description | |---|---| | Propose Compensation Hire | Subprocess of the Hire, Add Additional Job, or Start International Assignment business processes. Defaults compensation components per your compensation structure. Lets you edit any compensation components during the time of hiring. | | Propose Compensation Change | Subprocess of the Change Job business process. Defaults compensation per your compensation structure and lets you edit any compensation components. You can select either the Propose Compensation Change or Propose Base Pay Change initiation steps. | | Propose Compensation Offer/Employment Agreement | Subprocess of the Job Application business process in Workday Recruiting. Data entered in this step automatically feeds into the Propose Compensation Hire process within the Hire business process. | ### Propose Compensation Hire The Propose Compensation Hire subprocess is only available for the Hire Employee, Add Additional Job, and Start International Assignment business processes. When initiating these three processes, compensation is part of the process. Compensation assignment is not available as in ad hoc task. The Propose Compensation Hire business process uses a template-driven user interface, which provides additional configuration options. These options include instructional text within the tasks and additional security options. ### Compensation and the Offer Process The Propose Compensation Offer/Employment Agreement subprocess is found in the Offer business process. The compensation components in the Propose Compensation Hire step will automatically be populated from the Propose Compensation Offer subprocess. ### Eligibility Rules One of the most misunderstood concepts of compensation is defaulting. Understanding why compensation defaults can lead to a better management of your day-to-day transactions. This helps us start with reviewing how a hire works with compensation eligibility rules. Based on the configuration, several things occur during a staffing transaction: - If a worker is eligible for a package, and eligible for a plan in the package, defaulting will occur. - If a worker is eligible for a plan that is NOT in a compensation package, defaulting will not occur, but the plan is available to select. - If a worker is NOT eligible for a plan and the plan is in the compensation package, defaulting will NOT occur. - If a worker is eligible for more than one compensation package or compensation grade, these components and plans will NOT default. The package, grade, and plans will be available to select, but will not default. ### Generate Documents in Compensation Workday enables you to configure document templates and generate documents as part of compensation events. You can configure the following business processes to include a Generate Document step in the workflow: - One-Time Payment for Referral - Propose Compensation Change (When initiating as a step in the Change Job business process.) - Propose Compensation Hire - Propose Compensation Offer/Employee Agreement - Request Compensation Change - Request Compensation Change for Leave of Absence - Request One-Time Payment - Request One-Time Payment Offer/Employee Agreement Before configuring the compensation business process, first create the necessary templates in Workday Drive. Workday Drive is a toll that enables your team to create, store, share, and collaborate on content secured in your Workday tenant. From Workday Drive, create a new document template. Select a document source, such as Request One-Time Payment or Propose Compensation Hire. Then, add a category and draft the document text. You can manage and insert data fields to build your document content. Include the Generate Document step in compensation business processes. Make sure to configure the document step to use the correct template from Workday Drive. ### Propose Compensation Hire for Rehire Terminated employees can return to their organization as rehires. When a rehire occurs, some previous employment data will populate and provide guidelines. In the case of compensation, if for some reason this information is not part of their record, the system will determine other defaulting sources. | Without Recruiting | With Recruiting | |---|---| | Reference for Requisition Compensation. If not available, Reference for Position Compensation. If not available, | Reference for Offer Compensation. If not available, Reference for Requisition Compensation. If not available, | ### Manage Basis Total (MBT) Use Manage Basis Total (MBT) when you want to manage compensation by the total number, then have the system apply complex calculations to distribute the amount to plans. This top-down approach is common in countries like Italy, India, France, and Germany. These countries have many legislated or collective agreement components, guaranteed fixed amounts, or compliance and government regulations. The table below outlines the differences between MBT and managing by individual compensation components, which is a bottom-up calculation. | Individual Compensation Component | Manage Basis Total (MBT) | |---|---| | Entering amounts for each individual plan component amounts | Entering a single total compensation amount | | The user knows and enters the individual component amounts | Provides a configurable/flexible algorithm that will redistribute the total amongst all the plans. | | Users should understand the small details and dependencies of the complex compensation structure | Allows users to manage complex compensation events with a single point of data entry. | ### Compensation Basis Calculation The following displays the MBT algorithm: 1. **Fixed Amount Plans** The amounts are known and unchangeable. Therefore, these plans need to be allocated first. If there are multiple plans in this group, they are allocated randomly since no one plan's value affects another's within the group. 2. **Percent Plans Based on Primary Compensation Basis** Since a worker's total compensation amount is the starting point for the calculation, the value of percentage plans based on that number is inherently a fixed plan. 3. **Percent Plans Based on a Fixed Number** Similar to percentage plans based on primary compensation basis, percent plans based on a fixed number is also inherently a fixed amount plan. 4. **Salary Plan** This is where MBT allocation really makes a difference. Since salary is not input at the beginning, the algorithm for MBT will resolve for this. If there are percent plans based on salary, they will be allotted next. 5. **Percent Plans Based on Plans from Boxes 1, 2, 3, and 4** As the salary plan gets resolved and a value becomes known, the value for a percent plan based on salary also becomes known, and the system will allocate it. 6. **Remainder Plans** Any plans remaining will be allocated with the remainder left from the primary compensation basis. ### Model Allocation The Model Allocation by Compensation Basis report provides analysis of the compensation basis during a Change Job, Change Position, Hire, or Request Compensation Change. The primary benefit of this task is in modeling the MBT calculations. This report can confirm correct configuration and expected calculations. ## Chapter 10 - Manage Basis Total ### Overview Managing employees by a compensation basis total, or MBT, simplifies the management and distribution of compensation components to employees. This is useful and common for companies that operate globally. MBT uses the Primary Compensation Basis in Workday as a single value to calculate and distribute an employee's compensation plan amounts. Instead of updating multiple individual plans, managing by a basis total enables you to update a single value. Then, Workday distributes the total down to each of the individual plans the employee is eligible for. This method is referred to as the Top Down calculation. For example, during the compensation review process, you can change an employee's total compensation amount by changing their Primary Compensation Basis. Workday automatically distributes that amount to the compensation plans that make up the Primary Compensation Basis. To use MBT, you must enable it on a configurable compensation basis in Workday. There are additional requirements in your compensation configurations for the MBT to work. In this chapter, you will learn about these configuration requirements and apply MBT to a transaction. ### Objectives By the end of this chapter, you will be able to: - Describe a Manage Basis Total (MBT) business case and identify configuration requirements. - Hire using Manage Basis Total (MBT). - Use the Model Allocation Report. ### Using Compensation Basis The use of a compensation basis provides several benefits. One of the most notable is a holistic view and calculation of a worker's compensation. Additionally, you can use the compensation basis with the manage basis total (MBT) functionality. When changing compensation for an employee who is earning a total across multiple plans, one amount it entered. An increase applies to all compensation plans in the compensation basis as defined by an algorithm. Basic configuration steps include: - Selecting the compensation basis has the Manage Basis Total checkbox. - Add the MBT compensation basis to the employee's compensation package. - Based on the definition's ranking, the MBT compensation basis is the employee's primary compensation basis. | Field | Description | |---|---| | Salary Plans Maximum | Enter a maximum percentage amount for salary plans. You cannot enter a value greater than 100. If you enter 100, there is no limit. | | Retain Basis Total | Retains the compensation basis total even when a staffing transaction changes compensation plan assignment. Workday will recalculate the plan assignments but the compensation basis total will be fixed. | ### Manage Basis Total Use Manage Basis Total (MBT) when you want to manage compensation by the total number, then have the system apply complex calculations to distribute the amount to plans. This top-down approach is common in countries like Italy, India, France, and Germany. These countries have many legislated or collective agreement components, guaranteed fixed amounts, or compliance and government regulations. The table below outlines the differences between MBT and managing by individual compensation components, which is a bottom-up calculation. | Individual Compensation Component | Manage Basis Total (MBT) | |---|---| | Entering amounts for each individual plan component amounts | Entering a single total compensation amount | | The user knows and enters the individual component amounts | Provides a configurable/flexible algorithm that will redistribute the total amongst all the plans. | | Users should understand the small details and dependencies of the complex compensation structure | Allows users to manage complex compensation events with a single point of data entry. | ### Compensation Basis Calculation The following displays the MBT algorithm: 1. **Fixed Amount Plans** The amounts are known and unchangeable. Therefore, these plans need to be allocated first. If there are multiple plans in this group, they are allocated randomly since no one plan's value affects another's within the group. 2. **Percent Plans Based on Primary Compensation Basis** Since a worker's total compensation amount is the starting point for the calculation, the value of percentage plans based on that number is inherently a fixed plan. 3. **Percent Plans Based on a Fixed Number** Similar to percentage plans based on primary compensation basis, percent plans based on a fixed number is also inherently a fixed amount plan. 4. **Salary Plan** This is where MBT allocation really makes a difference. Since salary is not input at the beginning, the algorithm for MBT will resolve for this. If there are percent plans based on salary, they will be allotted next. 5. **Percent Plans Based on Plans from Boxes 1, 2, 3, and 4** As the salary plan gets resolved and a value becomes known, the value for a percent plan based on salary also becomes known, and the system will allocate it. 6. **Remainder Plans** Any plans remaining will be allocated with the remainder left from the primary compensation basis. ## Chapter 11 - Propose Compensation Change ### Overview The Propose Compensation Change is a subprocess in the Change Job business process. Workday evaluates and displays current and proposed compensation. Through the change job event, the employee may have an increase or decrease in pay. ### Objectives By the end of this chapter, you will be able to: - Identify transactions that can trigger compensation changes. - Correct out of order compensation events. ### Initiating a Propose Compensation Change If the job change includes a change in organization, country, or position, there could be a major impact on compensation. There could be changes to the compensation package, compensation grade, or grade profiles. Therefore, we recommend including the Propose Compensation Change subprocess in the overall Change Job business process. ### Reviewing the Propose Compensation Change The Propose Compensation Change subprocess is not available as an ad hoc task. This subprocess only occurs when a worker has a change to their current job or position. This change could potentially involve a change to compensation. By including the Propose Compensation Change subprocess in the Change Job business process, you can evaluate eligibility. When proposing compensation changes, you may remove compensation the employee is not eligible for and add newly eligible compensation components. If you intentionally assign an employee to a plan they are not eligible for, the system will remove the plan. In this case, you will need to restore the plan manually. Use the comment box to document reasons for adding new compensation plans. **Note:** As compensation eligibility rules changes, unless there is a compensation transaction, the employee's current compensation assignments will remain the same. ### Moving into a Position with Default Compensation If you use the Change Job business process to move an employee from one position to another, Workday re-evaluates Eligibility rules, which may affect all compensation components. | Comp Package A | Comp Package B | |---|---| | Comp Grade A | Comp Grade B | | Grade Profile A | Grade Profile A | | Salary 58,000 USD | Salary 54,000 EUR | | Allowance Plan A | | | Bonus Plan A | Bonus Plan B | When an employee moves into a position that has position compensation or requisition compensation, the default compensation will replace the employee's current compensation, including their salary. **Note:** If the Create Requisition Compensation subprocess is not included in the Create Job Requisition business process, and you try to add requisition compensation as a standalone business process, no defaulting from position or eligibility rules will occur. ### Currency Conversion Rates Base pay currency is based on the employee's compensation grade or grade profile. Therefore, you must have a compensation change as part of a job change that moves employees from one country to another. There are several steps to set up your currencies, both system-wide and as a preference. 1. Set up the default currency on the Edit Tenant Setup - System task. 2. Define different currency rate types, such as current, average, or historic, and select one as the default using the Edit Tenant Setup - System task. These will also be the rate type used during currency conversions. 3. Identify currencies that should be available in prompt lists on the Edit Tenant Setup - Global task. This will provide a shorter list than all currencies in workday. 4. Countries' currencies and location currencies can have defaults. 5. Employees can override their location currency by selecting a preferred currency. Use the Currency Rate Type prompt to select a rate type configured on the Maintain Currency Rate Types task. This new type rather than the Default Currency Conversion Rate. **Important:** If you are manually entering the rates for the currencies you support, they will need regular updates with an effective date. Use the Maintain Currency Conversion Rates task to enter a new effective date and time, or to edit existing conversion rates. ### Embedded Analytics and Configuring Related Worklets Embedded analytics functionality displays information you need to make the right decisions. In compensation events, you may want to display the compa-ratio or last pay increase. You can equip decision-makers by embedding a report with relevant data directly into the transaction. There are several compensation business processes that allow you to include embedded analytics, some of which have preconfigured worklets. Embedded analytics includes the following processes: - Propose Compensation Hire - Propose Compensation Change - Request Compensation Change - Propose Compensation Offer/Employment Agreement - Request Compensation Change for Leave of Absence - Request One-Time Payment and One-Time Payment for Referral - Initiate Compensation Review Process - Requisition Compensation - Severance Worksheet There are a few basic rules regarding the maintenance and configuration of embedded analytics: - To configure a related worklet or modify an existing worklet, use the Related Actions of the default definition of the business process. - You need to create custom reports and enable them as worklets. - On the custom report output setting, enable the reports as worklets. In the Available On field, select Embedded on Tasks. - You can include up to five worklets per step within the business process. - The worklet can default to open, allowing the user to manually close it. It can also default ro closed and allow the user to manually open it. - Each worklet is expandable. - You can hide the worklet if it does not return values. - Configure security to allow the security groups assigned to complete the task access to the worklet. If not, the worklet will not display. Prompts are part of the worklet. When including the worklet as a related worklet, you can add additional prompt fields. For example, if you run a report that shows an employee's employment history outside of a business process. When including the same report as a related worklet, the worker targeted by the business process will default in the prompt automatically. ### Correcting Compensation Changes Many Workday business objects allow you to specify an effective date when you create or edit them. This allows you to define changes as taking effect on a date or time other than when the data entry actually takes place. This is useful when you need to hire a worker retroactively to the first day of this week, or to change an employee's base salary as of the first of next month. You are never prompted for an entry date when editing, but an entry date is always stored in the system. These two types of dates, used in combination, allow for various types of reporting. ### Out-of-Order Correction Effective dating in compensation and staffing events gives you the flexibility to insert and correct events out of order. Keep in mind that staffing events may include compensation changes as part of your business process. Additionally, corrections to HR data could have an impact on compensation defaults. A correction to hire date will flow through to the effective date of the compensation data. A correction to the HR data will not have an impact on compensation defaulting. You can correct the following compensation events out of order: | Compensation Business Processes | Propose Compensation | |---|---| | Request Compensation Change | Propose Compensation Hire | | Propose Compensation Change | Propose Compensation Offer/Employment Agreement | | Request Stock Grant| Request Stock Grant Offer/Employment Agreement | | Change Default Compensation | Requisition Compensation | | Propose Reimbursable Allowance Plan Assignments | Request Compensation Change for Leave of Absence| | Request One-Time Payment | Request One-Time Payment Offer/Employment Agreement | | Request Post Termination Compensation | Severance Worksheet | **Note:** Workday does not apply corrections to later events for you. Anyone who has security permission to correct a compensation change can make an out of order correction. Workday strongly recommends that you restrict corrections to administrators. ## Chapter 12 - Requesting Compensation Changes ### Overview In this chapter, we will focus on the transactions that allow the defaulting to occur. When there is a change in an employee's compensation, it must be done through a compensation event. Compensation changes can occur as part of a larger business process, such as a hire or job change, or as a standalone business process. Using the Request Compensation Change business process, ad hoc compensation changes can occur at any time for many reasons. ### Objectives By the end of this chapter, you will be able to: - Configure and initiate a request compensation change. - Define and test expected end dates and actual end dates. - Analyze roll out and removal of compensation plans for a large population. ### Requesting Compensation Changes The Request Compensation Change business process works differently than most compensation transactions. This process is not triggered from an employee data change and does not require an evaluation of the eligibility rules. Instead, current compensation data populates into the task, allowing someone to edit the current compensation. **Note:** Eligibility is NOT evaluated during this business process. Current compensation assignments are populated and warnings are provided if eligibility is different than what is assigned. ### Request Compensation Change Business Process The Request Compensation Change business process uses a template-driven user interface. You can add instructional text and add additional security at a plan-by-plan level. Using the task security, you can configure the business process so certain plans are available for a partner but not the manager security group. By navigating to the business process template, you can view or modify: - Sections that can display help text. - Instructional text on the summary page. - Security configurations. ### Request Compensation Change Security Policy When viewing the Request Compensation Change business process security policy, you may notice that there is more than one initiating action available. The Request Grade Change action allows for a change to only the compensation grade and no other compensation data. The Request Compensation Change task allows changes to all compensation data. The Request Compensation Change business process is flexible. The task can change an employee's package, grade, rate of pay, salary amount, or plans. Since this task is an ad hoc change to compensation, Workday does not re-evaluate eligibility. Instead, it populates current compensation and the data is editable. There are two separate initiating actions for the Request Compensation Change business process: - Request Compensation Change - Request Grade Change The domain security policies within this business process template provide the ability to control which security groups can change the different compensation components. For example, a manager has security to change salary or hourly rates, but not a bonus plan. ### Request Compensation Change for Edit Position The Edit Position business process can include the Request Compensation Change subprocess as a step. This business process will evaluate eligibility and will remove compensation components. Any compensation component for which the employee is newly eligible will default in. Workday recommends that only the HR partner and HR administrators initiate the Edit Position business process. ### Request Grade Change Although this initiating step uses the same business process as Request Compensation Change, it only allows changes to the compensation grade. ### Request Compensation Change (Web Service) The web service is used when building an integration to load this type of change for many employees. ### Security Options There are other options in the business process security policy. Common configurations include: | Security Option | Definition | |---|---| | View All | Enables viewing of all actions, completed or not. | | View Completed Only | Supports the manager review process, compensation changes, and other worker history. This option suppresses related components, so that only completed business processes are viewable. This can also be used to allow employees to see only completed business processes. | | Cancel | Specifies which security groups can cancel the business process while in progress. | | Rescind | Specifies which security groups can rescind the business process after it is complete. | | Correct | Specifies which security groups can correct the business process. Correct has no impact on any earlier and later effective-dated compensation changes. | | Reassign Tasks | Allows tasks to be reassigned to other users. | | Allow Inbox Task Delegation | Allows this business process to be delegated. Requires enabling delegation on the tenant level using the Edit Tenant Setup - Business Process and Notifications task. The configuration of the Request Delegation Change business process and security policy needs to be completed. | | Hide Comments From Worker | Hides all comments by all participants in the business process. | | Hide Details from Worker | Prevents the event target from having access to the details of a business process instance. | | Allow Attachments within Emails | Allow attachments to be added to notification emails in this business process. | ### Actual and Expected End Dates When entering compensation, through an HR event or an ad hoc business process, you can control participation start and end. Enter the start of a compensation component as an effective date. The expected or actual end date drives the end date. - **Expected end dates** allow you to remove all salary, hourly, or allowance plan assignments from an employee's compensation. The expected end date requires a process to run to pick up the date and remove the plan. Unlike the Actual End Date field, expected end dates do not use an automatic process. As the name implies, this date is an expected date, not an actual date. - **The actual end date** does not require a process. Instead, the plan will end on the date entered. Actual end dates allow you to automatically end a plan assignment. The entry of the Actual End Date is available during the plan assignment of ALL compensation plan types. You can also extend the Actual End Date during the Request Compensation Change process. Two delivered reports can help you track all plan assignments that have an expected end date. | Report | Definition | |---|---| | Compensation Plan Expected End Date Audit | Lists employees, by organization, participating in a compensation component with an expected end date. You can copy and modify this report. | | Compensation Plan Assignments With Expected End Dates | Lists employees as of a specific date, assigned a compensation component with an expected end date. You can copy and modify this report. | To initiate the process of removing plan assignments, run the Schedule Remove Compensation Plans with Expected End Date task. This process runs for one or more compensation plans at a time. Additionally, you can schedule the report to run as often as needed. One of the advantages of the expected end date is the ability to select an effective date option. If you enter an actual end date, participation in the plan will end on that date. In contrast, if you enter an expected end date, you can choose to have the plan assignment end using one of the effective date options. ### Effective Date Options Other fields on the Schedule Remove Compensation Plans with Expected End Date task are as follows: | Report | Definition | |---|---| | By Compensation Eligibility Rule | Identifies the population to evaluate and remove a plan assignment. The population identifies the selected plan and populates the expected end date. | | Expected End Date | Employees with an expected end date for the selected compensation plan that equals this date. | | State Date | Employees with an expected end date for the selected compensation plan that is on or after this date. | | End Date | Employees with an expected end date for the selected compensation plan that is on or before this date. | Once the process runs, the employees will automatically have the plan removed. Add a reason for the change to the employee's compensation to clearly identify the compensation plan removal. ### Compensation Rollout and Removal When you create a new compensation plan, it is necessary to enroll eligible employees into the plan. Even though an employee may be eligible, you must have an event to assign the employee to the plan. The Rollout Compensation Plans to Employees task allows you to add a compensation plan to an employee's compensation. The rollout and removal tasks use the Request Compensation Change business process definition. - Create the Compensation Plan. - Create the Compensation Eligibility Rule. - Roll out Compensation to Employees. - Run the View Compensation Plan Rollout Process Report. If employees are excluded, rerun as needed. The View Compensation Plan Rollout Process page includes information regarding the names, number of employees impacted, and a list of employees with in-progress compensation transactions. Workday will exclude any employees with in-progress compensation processes from receiving the compensation plan. When you no longer need an existing compensation plan, you must remove it from employees' compensation. By using a compensation eligibility rule and running the Remove Compensation Plan from Employees task, the system will remove the plan from employees. ## Knowledge Check 1. True or False? Eligibility is NOT evaluated when a Request Compensation Change business process is initiated. 2. True or False? Compensation changes are made by initiating a compensation business process, or they can occur automatically when you edit eligibility rules. 3. Which statement is true? A. Managers can only assign compensation plans for which the employee is eligible. B. Managers can only assign compensation plans which are included in the employee's compensation package, and for which the employee is eligible. C. Managers can assign any compensation plan to any employee in any subordinate organization. D. Managers can assign any compensation plan to any of their direct reports. 4. True or False? The Request Compensation Change business process is only initiated through the ad hoc task found from the employee's Related Actions. 5. The Rollout Compensation Plans to Employees can be run for the following: A. Grade B. One-Time Payment Plans C. Bonus Plans D. Benchmark Jobs