Creating a Total Compensation Plan

Objective

After completing this lesson, you will be able to define the requirements for using Total Compensation.

Total Compensation Main Concept

Total Compensation allows for a holistic view of both monetary and share-based rewards. The use of Total Compensation Plan provides efficient process as it uses a single template to manage salary, short term and long-term incentives. Total Compensation rewards can be viewed without running multiple reports. 

Prerequisites

Total Compensation plans can only be created when Compensation and Variable Pay are both implemented. The setup requires an understanding of both modules. If you’re not yet familiar with Compensation settings, please go through the separate Administration course for Compensation available in the Learning Hub.

Total Compensation uses one route map, if you’re using different approval process for merit and bonus planning, Total Compensation may not be the ideal solution for you.

Create a Total Compensation Plan

Total Compensation plans can be created from scratch or by copying existing Compensation and Variable Pay plans as baseline.

To create a plan, navigate to Compensation Home.

Select Add new total compensation plan.
Choose to either Create from scratch or Copy existing plan templates.
- If copying from existing plans, you will choose which salary and bonus plan to use as baseline. If you’re selecting to copy existing plans, ensure that both plans are either Employee Central-integrated templates or non-Employee Central-integrated templates.
As a part of the plan template copy process, you have an option to update the following information:
- Plan Name
- Bonus Start/End dates
- Fiscal Year end date
- New Effective date (for EC-Integrated plans)
- An option to clone the compensation worksheet eligibility rules
- Which variable pay data files (employee history, business goals and weights, bonus plans and eligibility) will be cloned
- An option to update the rating source for variable pay

When a new plan is created, you will notice the admin settings for salary and bonus are segregated to easily determine which setting is associated to which component.

Reference Bonus Payout in Salary Tab

Total Compensation has made it easier to display bonus payouts in salary tab without importing or exporting data from different plans. As administrators, you can design the salary sheet to display variable pay columns and give planners an overall perspective of total cash incentives.

In this example, the field group Bonus Components has been created to display the payouts from variable pay tab.

The Salary tab, with the Bonus Components field group, is displayed.

With Use a field option, administrators can easily reference any entry-level fields in the Variable Pay sheet to be displayed in the salary tab.

The Design Worksheet, showing the configuration of a field called Final Bonus Payout

Enable Variable Pay Profile in Salary Tab

Administrators can also set up any custom field on the salary tab to launch the variable pay profile in read-only mode. This gives the planners an option to view calculation details of Variable Pay (not just the final bonus amount) for an employee without leaving the Salary sheet.

Any custom field in salary sheet can be set up as the access point for variable pay profile. The selected field will have a hyperlink. When planners click the link, variable pay details will be visible on the Compensation Profile pop up window.

The Display Settings screen, with the custom field Final Bonus Payout set as the access point

Behaviour Differences

As an Administrator, bear in mind the expected behavioral changes in number formats when using Total Compensation templates.

As you know, standalone compensation templates allow number formatting to be defined at Field Type level (e.g. money type, percent type, etc.) while standalone Variable Pay templates allow for column-level number format (e.g. one money field can use standard money format, another money field can have a custom number format). Total Compensation plans, follow the number formatting at Field Type level, same as the standalone Compensation.

Percent type also behaves differently when used as custom or standard fields. 

	Total Compensation Plan worksheets	Variable Pay standalone worksheets
Percent type Custom fields	The system calculates percent type custom fields as a whole number on Salary, Stock and Variable Pay tabs. For example 90% is stored as 90, instead of 0.90.                   We suggest you divide the value by 100 when you use percent type custom fields in an equation. This will automatically adjust the value to appear as a real number.	The system calculates percent type custom fields as a real number. For example, 90% is stored as 0.90, and not as a whole number.
Percent type Standard fields	The system calculates percent type standard fields differently on Salary, Stock and Variable Pay tabs of Total Compensation Plan worksheets.   On Salary and Stock tabs, the behavior is the same as the standard field calculation, where the number formatting is defined at the field type level.   On the Variable Pay tab, the value is stored as the real value. For example, 90% is stored as 0.90. As a result, you need not divide the values by 100 when you use standard fields of type percent in an equation.
Field type "defBonusPctFormat"	You can use "defBonusPctFormat" to address precision differences between standard Variable Pay and standard Compensation percent type fields.

Points to consider:

If you are using Variable Pay standard fields in your custom formulas, you need not divide them by 100; for everything else you do.
Any imports for % fields you are doing in Total Compensation for Compensation or Variable Pay, need to be whole numbers.
In reporting, you will notice that the Variable Pay standard % fields will export 90% as 0.90, while Compensation standard fields, and Compensation and Variable Pay custom fields export 90% as 90.
Assignment-Based Ratings may be enabled in Total Compensation templates to calculate prorated payouts for employees based on specific ratings for their different assignments.

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