This topic is a worked example of the steps for setting up a component plan structure across three business groups. Use this type of plan setup to budget and award compensation based on different components or reasons. You can create up to four components of the same plan type for a single award. For example, you can budget and allocate a salary increase based on a merit component, cost of living component, and a company performance component. Although the award is based on different components, employees receive a single compensation award.
This sample setup creates plans in US, UK, and Canadian business groups. You can replace these with business groups relevant to your enterprise. This sample setup is an example of how you can set up a global component plan to award salary increases based on the following components: merit, cost of living, and company performance. In this example, the US business group is the master business group in which you define the global plan.
Note: Ensure you use the business group in which you define the global plan to complete administrative processing.
Note: You should have defined your business groups and set up conversion rates before you complete your plan design.
Use this sample setup if your business requirements are as follows:
Each country has a country-specific currency
You publish budgets in a single currency - in this example, we use US dollars
You publish budgets as a percentage of eligible salary
You enable line managers to update rankings and rate employee performance
You enable line managers to view and update employee assignment information
You administer salary increases annually
You limit access to plans for line managers for a specific period - in this example, they have access to the plan from January 1, 2006 until December 31, 2006
You disallow updates to the plan beyond a particular date - in this example, this date is November 30, 2006
You display all person-related information as of a specific date - in this example, we display all person related information as of January 1, 2006
You use the Supervisor Hierarchy for Approvals
You enable managers to submit worksheets for approval at any time.
Define Plan Years as follows:
01-JAN-2005 - 31-DEC-2005
01-JAN-2006 - 31-DEC-2006
01-JAN-2007 - 31-DEC-2007
01-JAN-2008 - 31-DEC-2008
Define a Life Event called Global Component with Compensation as the Type.
Define another Life Event called US Global Component with Compensation as the Type.
Define a Derived Factor called Stated Salary, where US dollar is the currency, Stated Compensation is the source, Annually is the Stated Compensation Periodicity, select the No Minimum and No Maximum check boxes, and As of Event Date as the Determination Code.
Define a Plan Type called Component Plan, where Compensation Workbench is the Option Type and Comp - Salary Change is the Compensation Category.
See: Defining Plan Types
Define an Option called Global Merit, where Component Plan is the Plan Type. The application automatically updates the Group Option field and the Group Option check box when you save your work.
Define two new Options called Global Company Performance and Global Cost of Living.
Define local options for US Merit, US Company Performance, and US Cost of Living. For each local option, in the Group Option field, select the corresponding global option name.
See: Defining Options
Define a Plan called Global Component Plan with Component Plan as the Plan Type, May Not be in a Program as the Usage, US dollar as the Currency, and Annually as the Activity Reference Period.
Add all the plan periods you defined to your plan, and add the following tasks:
| Task Type | Self-Service Task Name | Access |
|---|---|---|
| Set Budgets | Set Budgets | Full Access |
| Job Changes/Promotions | Update Assignment Information | Full Access |
| Performance Ratings | Rate Employee Performance | Full Access |
| Allocate Compensation | Award Bonuses | Full Access |
| Manage Approvals | Approve Awards | Full Access |
| Review and Submit | Review & Submit | Full Access |
Attach the Global Merit, Global Company Performance, and Global Cost of Living options to the plan. Set the status to Active.
Define a Plan called US Component Plan with the same parameters as the Global Basic Plan.
Note: For this plan you must also select the Restrictions tab and select Global Component Plan as the Global Plan Name.
Attach the US Merit, US Company Performance, and US Cost of Living options to this plan.
Define Plan Enrollment Requirements for the Global Component Plan as follows:
Select Explicit as the Method in the Enrollment alternate region.
On the Scheduled tab, select Compensation as the Enrollment Type.
In the General alternate region, enter 01-JAN-2006 as the Start and 31-DEC-2006 as the End as the Enrollment or Availability Period.
Enter 01-JAN-2006 as the Assigned Life Event Date.
Select Global Component as the Life Event.
Select Processing End Date as the Close Enrollment Date to Use.
Select 01-JAN-2005 to 31-DEC-2005 as the Year Period.
In the Coverage alternate region, select Event as the Enrollment Coverage Start Date. Select 1 Day Before Event as the Enrollment Coverage End Date.
Select the Rates alternate region and select Elections as the Rate Start Date. Select 1 Day Before Event as the Rate End Date
In the Budget alternate region, select the Uses Budget check box if you use budgets. Select Store Budgets as Percentages in the Preserve Budget Column.
In the Miscellaneous alternate region, select Supervisor Hierarchy as the Hierarchy to Use.
In the Performance alternate region, enter 01-Dec-2006 as the New Ratings Become Effective date.
In the Miscellaneous alternate region, enter 01-JAN-2006 and 30-NOV-2006 as the Self Service Worksheet Update Period Start and End dates. Select Full Access as the Default Worksheet Access and enter 01-JAN-2006 as the Freeze Date. Select Promotion as the Salary Change Reason.
Define Plan Enrollment Requirements for the US Component Plan with the same parameters as the Global Component Plan.
Note: For the US Component Plan, select US Component as the Life Event instead of Global Component.
Define Standard Rates for the global component plan as follows:
For Distribution Budgets
Create a new rate called Global Component Plan DB - Merit.
Select Plan as the Level.
Select Global Component Plan - Global Merit as the Compensation Object.
Select Not Applicable as the Tax Type.
Select CWB Distribution Budget as the Activity Type.
Clear the Element and Input Value Required check box.
On the Calculation Method tab, select Flat Amount as the Method, select the Enter Value at Enrollment and the Calculate for Enrollment check boxes. Enter 0 as the Minimum, 1000000000 as the Maximum, 1 as the Increment Amount, and 0 as the Default. Select Round to Nearest One as the Rounding Code.
For Budget Reserves
Create a new rate called Global Component Plan RB - Merit with the same parameters as you define for the Distribution Budget.
Note: For this rate, select CWB Reserve as the Activity Type.
For Worksheet Budgets
Create a new rate called Global Component Plan WB - Merit with the same parameters as you define for the Distribution Budget.
Note: For this rate, select CWB Worksheet Budget as the Activity Type.
See: Defining Activity Rates for a Standard Contribution/Distribution
Define Standard Rates for the US Component Plan as follows:
Worksheet Amounts
Create a new rate called US Component Plan WA - Merit with the same parameters as you defined for the Distribution Budget except the following:
Select US Component Plan - US Merit as the Compensation Object.
Select CWB Worksheet Amount as the Activity Type.
Clear the Element and Input Value Required check box.
Select the Enter Value at Enrollment and Calculate for Enrollment check boxes in the Calculation Method tab.
On the Processing Information tab, select Option Level Component as the Compensation Category.
Eligible Salary
Create a new rate called Global Component Plan ES - Merit with the same parameters as you defined for Worksheet Amounts except the following:
Select CWB Eligible Salary as the Activity Type.
Select Not Applicable as the Tax Type.
Clear the Element and Input Value Required check box.
Ensure to select the Calculate for Enrollment check box.
On the Calculation Method tab, select Multiple of Compensation as the Method.
Select the Calculate for Enrollment check box.
Clear the Enter Value at Enrollment check box.
Enter 1 as the Multiplier and select Multiply by as the Operator.
Select Stated Salary as the Compensation Factor.
Follow the same steps to set up rates for Global Component Plan - Global Cost of Living and Global Component Plan - Global Company Performance.
To create the setup for the UK and CA plans, follow the steps you completed to define Plan Years, Derived Factors, and Life Events. Use Plan Design Copy to copy the rest of the setup.
Note: Ensure you copy the US Component Plan and all its child records into your UK and CA business groups one at a time. Do not copy the global plan.
To copy the US Component Plan, you must do the following:
On the Plan Design Copy page, select the link to copy and enter UK Component as the Plan Name.
Enter 01-Jan-1990 as the Effective Date.
Select your US Component Plan.
Select the Target Category as Different Business Group.
Select your UK business group as the Target Business Group.
Enter 01-Jan-1990 as the Effective Date to Copy.
Select Reuse existing objects if current name exists in target as the Reuse Method.
Enter a Prefix of UK.
Note: Ensure that the Global Component Plan is the Global Plan and verify that the copied compensation objects names are updated to UK or CA as required. Also, ensure you change the currency for these local component plans as required.
Note: Optionally, update the rate names as well.