Oracle HRMS provides flexible mechanisms that support common industry approaches to grade implementation, and salary and pay administration.
Enterprises use grades to compare roles within their organizational structure and relate compensation to grades to pay their employee in groups. Oracle HRMS uses grades to represent relative levels of management or seniority of employees in an enterprise, and provides alternative approaches to grade related pay administration, if you administer salaries for groups of employees.
Oracle HRMS supports the following typical models of grade implementation and pay administration.
Model 1: Individual Pay: You administer salaries on an individual basis and process salary updates manually. Grade changes do not trigger salary changes. You can, however, use grade rates as a guideline for manual update of salaries.
For this model, you use Salary Administration. You can enter salary amounts or wage rates for all new employees using the Salary page. You can also enter proposals for salary changes and identify the various components making up the changes.
Salary basis is central to the salary administration functionality. It sets the relationship between various components of the salary administration functionality.
See: Salary Basis and Starting Salary and Salary Proposals
For rapid updates to many salaries, you can download salary information to a spreadsheet, modify it, and upload again using Web Applications Desktop Integrator (Web ADI).
See: Salary Spreadsheets
You can also use Compensation Workbench to allocate compensation awards and propose changes to salary components on an individual basis or for groups of employees. Using Compensation Workbench line managers set compensation budgets and issue them to the reporting managers. Reporting managers then allocate compensation awards within these budgets to employees belonging to their organizations.
Grade-Related Pay
Model 2: Group Pay (Common Pay Scale): Pay is based on grade and, optionally, grade step. In this model every grade or subgrade maps to a point on a common pay scale and enables you to compare multiple grade groups to a single set of values.
Model 3: Group Pay (No Common Pay Scale): Pay is based on grade but may also vary by other criteria. For example, the pay for employees on the same grade may vary according to their location. You create a default pay rate for each grade and, optionally, grade step and you create a separate pay rate for each set of criteria (location, in our example). Similarly you can vary pay on the basis of other criteria such as union or job.
For more information on these models, see: Recognizing Your Grade Implementation Model
If follow Model 2, you may choose to use either the Grade/Step Progression (GSP) or the non-automatic step progression features to manage your grades and grade related pay. To follow Model 3, you must use Grade/Step Progression.
The Grade/Step Progression approach, enables you to group together grades and grade steps into a Grade Ladder and then define system-based rules for the automatic progression of your employees on these grades and steps. You can also update employee salary automatically whenever these is a grade or step change.
See: Implementing Grade Related Pay, Administering Grades and Pay (Without Using Grade Ladders), and Administering Grade/Step Progression
Model 4: Criteria-based Pay: Pay varies according to combinations of criteria. You create a matrix in which you record values for each rate (salary, overtime, allowances, and so on) against combinations of criteria (such as performance rating for each job at each location). You administer pay by creating a rate matrix and retrieving values based on a person's current assignment or overriding values from their timecard, using the rate retrieval API.
Using Oracle HRMS you can enter details from compensation surveys conducted across your industry. You can then link the survey details for individual jobs, called salary survey lines, to the jobs, positions, and assignments you use in your enterprise.
Note: You can also download information from market survey companies using APIs.
See: Entering Compensation Surveys
The salary amounts or wage rates you enter or change provide your enterprise with information for analysis purposes. If you are also using Oracle Payroll, they also provide some of the values that payroll calculations use. If you are using another payroll system, they can also provide salary information for that payroll to process.
Oracle HRMS and Oracle HRMSi enable you to generate a range of reports to meet your business analysis needs and aid payroll calculations.
For example, using the Salary Review Report you can check the current and past salaries for some or all of your employees.
The Compensation History page in SSHR enables you to view the in-progress, current, and historical information about compensation and ranking of your employees. If you use Compensation Workbench, this feature supplies a number of reports for salary changes, bonuses, and stock options.
See: Compensation Reporting and Salary and Grade Related Pay and Progression -- Reports
Oracle HRMS also includes various Workforce Intelligence reports that help you analyze salary and grade related information.
To enable you to manage the basic remuneration that employees receive, you need to understand the following key concepts that underpin the Salary Administration functionality:
To enable you to effectively enter information about salary surveys you need to understand another key concept:
To enable you to manage grade related pay and progression, you need to understand the following key concepts:
To use Rate by Criteria, read: