In which of the following scenarios is the compensation plan element of gainsharing used?
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22 Define Workforce CompensationThis chapter contains the following: Show
Define Workforce Compensation: Overview Workforce Compensation Lookups: Explained Manage Compensation Plans Configure Global Compensation Settings Define Eligibility Profiles Define Workforce Compensation: OverviewCreate compensation plans and cycles used for compensating groups of workers on a focal or anniversary basis. Configure the type of compensation allocated, the information displayed to managers, whether budgeting is used, eligibility criteria for the plan or component, and the approval hierarchy. Manage payroll elements, formulas, derived eligibility factors, and HR actions used in plan setup and administration. To define workforce compensation, application implementors and compensation administrators start from the Setup and Maintenance Overview page. Select Navigator - Setup and Maintenance. Note Compensation administrators can maintain workforce compensation plans from the Compensation work area. Select Navigator - Compensation. Workforce Compensation Lookups: ExplainedThis topic identifies lookups used in a workforce compensation cycle. You can modify these lookup types during initial implementation and at any later time. Reason LookupsWhen you adjust a budget, you specify a reason for the adjustment. Adjustments and other budget changes display in the budget audit history along with the reasons. You can add different adjustment values to the CMP_BUDGET_AUDIT_REASONS lookup type. Values that start with CMP$$ will only show in audit history. The following reasons are predefined:
Nonmonetary Unit of Measure LookupsYou use nonmonetary units of measure throughout workforce compensation. You can add values or edit existing values to the CMP_NONMONETARY_UOM lookup type. The following nonmonetary units of measure are predefined:
Custom Column LookupsBy configuring five custom lookup types, you can create custom columns that allow managers to select from a list of values. For example, you might create a custom column called Up For Promotion and allow managers to select Yes or No by adding those meanings to one of the custom lookup types. Lookup codes must be numeric. Custom column lookup types are:
The delivered value is Default. Manage Compensation PlansWorkforce Compensation Setup: Critical ChoicesWhile designing your compensation plan, you make important choices, such as plan access, components, alerts, worksheet and budget sheet display, and models and reports. The configuration options that you can enable are grouped into the following categories:
Plan FoundationPlan foundation configuration options are:
BudgetingIf you use budgeting, you can have separate budgets for each component or link multiple components to a single budget. You can also link budgets to off-cycle compensation plans. For example, you can give a manager a single annual budget amount and draw both focal and off-cycle awards from the same budget pool. Once you enable budgeting, you configure how data displays on the budget page, such as data display order, available menu actions, and text instructions to the managers. Also, you can copy a budget page layout from another plan. WorksheetWorksheet configuration options are:
Models and ReportsModels and reports configuration options are:
Employment Records to Use: Points to ConsiderThe type of employment record selected for a plan determines the employment records evaluated by the start compensation cycle process and which records are used during the compensation cycle. Determine the record to use by selecting one of the four options:
Primary AssignmentsThe start compensation cycle process includes and evaluates eligibility for primary assignments only. Even if a worker has multiple assignments, the worker only appears on the worksheet of the manager for the primary assignment. This is true if the plan uses a manager hierarchy. All AssignmentsThe start compensation cycle process includes and evaluates eligibility for all assignments. If a worker has multiple assignments, the worker may appear on one manager's worksheet more than once. Or, if the manager on each assignment is different, the worker may appear on multiple managers' worksheets. Employment TermsThe start compensation process includes and evaluates eligibility for employment terms of legal employers that use the three-tier employment model. If the plan uses a manager hierarchy, workers appear on the worksheet of the manager of the primary assignment. Workers whose legal employer uses a two-tier employment model are not evaluated. Any Assignment or Employment Term with a SalaryThe start compensation process includes and evaluates eligibility for all assignments with a salary record and employment terms with a salary record. If the plan uses a manager hierarchy, workers appear on the worksheet of the manager of the primary assignment. If a worker has multiple assignments with a salary record, the worker may appear on one manager's worksheet more than once with a different base salary for each assignment. Or if the manager on each assignment is different, the worker may appear on multiple managers' worksheets with different salaries for each. Assignments and employment terms that do not have a salary record associated with it are not evaluated. Workforce Compensation Hierarchy Types: Points to ConsiderThe hierarchy determines how approvals are routed to the highest level approver. The same hierarchy also determines how budgets are pushed down the organization when using manager level budgeting, or how budgets roll up when using worker level budgeting. It also determines the workers that appear on each manager's worksheet. Determine the hierarchy by one of the three options:
Approvals Management StructureA set of approval relationships and rules used by the Approvals Management Structure determines the hierarchy. Manager HierarchyThe supervisor associated with the worker's employment record determines the hierarchy. FormulaA custom hierarchy created using a formula determines the hierarchy. Workforce Compensation Components, Salary Components, and Action Reasons: ExplainedEvery time you do a compensation transaction you need to identify a reason, whether it is when allocating compensation for a workforce or awarding compensation on an off-cycle basis. Three ways of identifying the type or reason for compensation allocations are:
Compensation Actions and ReasonsWhen you set up a workforce compensation plan, you must select an action and optional action reason that are associated with all salary and assignment records when you transfer data to HR after the cycle is complete. Managers can also select action reasons for individual workers when they allocate compensation or promote. For example, you might have a plan where managers allocate merit increases only. The action for the plan could be Allocate Workforce Compensation. The action reason could be Merit. When the batch process updates salary records after the compensation cycle is over, the Allocate Workforce Compensation action and Merit action reason appears in the worker's compensation history for that salary record. One action and ten action reasons are provided to use with workforce compensation plans. You can extend this list to add additional actions and reasons. The Action provided is Allocate Workforce Compensation. Action reasons provided are:
Workforce Compensation ComponentsA workforce compensation plan must have at least one component. Components represent compensation being awarded in the plan. Components can be the same type of compensation, such as Salary - Merit, Salary - Cost of Living Adjustment, or Merit - Market Adjustment. Components can also be different types of compensation within the same plan, such as Merit, Bonus, and Stock. You determine how each component is processed when configuring the column properties for the compensation amount columns. Workforce compensation components that capture salary adjustments are posted as salary. You can associate each workforce compensation component with specific salary components if more than one will post as salary. For example, you might have a plan where managers allocate Merit and Market Adjustments at the same time. Merit and Market Adjustments are the names of the components set up for the workforce compensation plan. These names are informational only. When you update worker salary records with their new salaries, you want to retain individual amounts allocated for each component. For the Merit component, you associate the Merit salary component. For the Market Adjustment component, you associate the Market salary component. For example, a manager might allocate compensation in this way.
When the process runs to transfer approved salary adjustments to worker salary records, it can post the individual components, therefore storing the 5 percent and 1 percent adjustments to the Merit and Market components, or it can post just the total salary adjustment of $6,000. Salary ComponentsThe salary basis attached to a worker's employment record determines if the worker's salary uses salary components. Salary components enable managers to itemize salary adjustments made into different reasons. For example, a manager might determine a worker's salary adjustment in this way.
The worker's salary history will show an adjustment of $8,000 but the salary record will store the itemization of that 8 percent into the components shown. The salary transaction also has an action and optional action reason associated with it. If you adjust the salary while promoting the worker or if the worker is relocated, for example, the action may be Transfer or Relocation and the action reason would be the same. If a compensation or HR specialist adjusts the worker's salary, the action reason could be Change Salary and the reason could be Adjustment. You can edit the predefined components or add components to the Salary Component lookup type at any time. Salary Component Lookups: ExplainedSalary components itemize new or adjusted salary into one or more components that reflect different reasons for the allocation. You can edit or add components to the Salary Component lookup type during initial implementation and at any later time. The following salary components are predefined:
To add or edit these codes in the CMP_SALARY_COMPONENTS lookup type, start in the Setup and Maintenance work area and search for lookup tasks. Plan Statuses: ExplainedPlan status identifies the state of the plan and any plan cycles already started or completed. The two plan statuses are:
Active Plan StatusThe plan is available for use and you can start a plan cycle. Line managers can access the plan from the workforce compensation work area at any time during the period that worksheet is available to managers. Compensation managers can access the plan from the administration work area to view plan data even after the data is transferred to HR. Inactive Plan StatusThe plan is no longer available for use and is not available to view or update. Compensation administrators can change the status back to Active from the Configure Plan Details page. Use this status to create and test plans, or for obsolete plans. Only plans with this status can be purged from the system. Local Currency Determination: Points to ConsiderIf you have global plans in which workers are paid in different currencies, you must select how each worker's local currency is determined for each component.
Corporate CurrencyThe corporate currency defined for the plan determines the local currency. Element Input CurrencyThe input currency of the payroll element mapped to the component determines the local currency. Legal Employer CurrencyThe currency defined by the worker's legal employer determines the local currency. Salary Basis CurrencyThe payroll element associated with the salary basis definition linked to the worker's employment record determines the local currency. FormulaA formula you create to retrieve the currency from some other source determines the local currency. Performance Ratings: Points to ConsiderIf you consider performance ratings when allocating compensation you can display ratings from Oracle Fusion Performance Management or rate workers during a workforce compensation cycle. You can use performance ratings in the worksheet in the following ways:
Display Performance Management RatingsIf you integrate with Performance Management, you can display performance ratings given in the performance management system and provide access to the full performance document from within the worksheet. You select the performance document template and performance period to make available, and whether to display only completed ratings or ratings in any status. Rate Workers Within CompensationManagers can rate workers as they allocate compensation. These ratings are used only within the current compensation plan and cycle. The ratings are not transferred to the performance management system. When you set up a plan, you can select a rating model to use, or you can navigate to the Manage Rating Model page to edit an existing rating model or create a new one. You can also decide how managers rate performance, either by selecting the rating from a list of values or by designating the number of stars to represent the worker's rating. Use Both Performance Management Ratings and Compensation RatingsYou can choose to display both Performance Management ratings and compensation ratings in the worksheet. For example, if you gave Performance Management ratings several months before the compensation cycle starts you might want managers to reassess their worker' performance to ensure that current performance is consistent with past performance. You can set up the plan to display the ratings given in the performance management system and also enable managers to give compensation ratings during the compensation cycle as a point of comparison. Configuring Approvals: Critical ChoicesThe hierarchy type defined for the plan determines the approvals hierarchy. You can create an alternate approval hierarchy for a manager that overrides the plan hierarchy if you want approvals to occur in a different sequence or by different people. You also specify the timing when managers can submit their worksheets for approval and when they can approve their lower managers' worksheets. Choices to make when configuring approvals are:
Approval ModeApproval mode identifies when managers can approve their lower managers' worksheets. The first option, Approve anytime, allows managers to approve their lower managers' worksheets at any time during the period the worksheet is available to them. The second option, Manager must first submit, means that lower level managers must submit their worksheets upward for approval before a higher level manager can approve them. This ensures that higher managers do not approve worksheets before lower managers have had time to complete them. Submit ModeSubmit mode identifies when managers can submit their worksheets. The first option, Submit anytime, allows managers to submit their worksheets at any time during the period the worksheet is available to them. The second option, All managers must be approved, means that all lower level managers' worksheets must be approved before a higher level manager can submit his own worksheet for approval. This ensures that higher managers review and approve allocations of lower managers before submitting allocations for their entire organization for approval. Alternate Approver HierarchyBy defining alternate approvers, you replace the standard approval hierarchy for a manager with a new set or sequence of approvers. The alternate approver does not have to be a part of the regular plan hierarchy. You can create multiple approvers for the same manager by identifying the specific individuals and using the approval sequence to determine the order in which approvals occur. The highest sequence is the final approver. Alternate hierarchies are commonly used when approval control transitions from managers to the HR department. Creating Custom Alerts: Worked ExampleThis example demonstrates how to create a custom alert that displays a warning on the worksheet when a manager allocates a bonus amount that is more than the recommended bonus amount. The following table summarizes key decisions for this scenario.
Creating the Custom Alert
Testing the Custom Alert
Worksheet Tab Types: ExplainedTab types control the display of information on a worksheet page, which consists of one or more tabs. The information on each tab varies by the tab type. You can define up to 10 tabs for each worksheet. Commonly used columns are enabled by default for each tab type to make implementation easier. You can display the same set of columns in the details region of any tab type, except for the approvals and communicate tab types. The compensation, performance, and promotions tab types have summary tables and graphs specific to the focus of the tab. However, you can also give performance ratings and promotions on the compensation tab type and make compensation allocations on the performance and promotion tab type when you want to combine tasks into a single tab. When you set up the plan, you enable the tab types that are relevant to what managers do during the compensation cycle. Worksheet tab types are:
Compensation Tab TypeYou use this tab to manage and allocate compensation. It contains a summary table that displays high-level information about each component in the plan. For each component in the plan, the summary region can display the number of eligible and ineligible workers, allocation totals, and budget totals. You can expand the summary region for each component to view analytics providing a snapshot of allocations in the current cycle. Approvals Tab TypeThis tab is included only in the worksheets for managers with at least one lower level manager. Higher managers use it to view the status of lower manager's worksheets, approve or reject submitted worksheets, or request additional information. The first subtab is always enabled. You can enable up to seven additional subtabs that display summarized information for each lower manager. This table describes the subtabs and what they display.
Communicate Tab TypeYou use this tab to generate compensation statements for workers to notify them of their new or adjusted compensation, performance rating, or promotion. Performance Tab TypeYou use this tab to give new performance ratings, or view existing performance ratings given either during a previous workforce compensation cycle or in Oracle Fusion Performance Management. The summary displays the number and percentage of workers for each rating as well as the target distribution if one is defined for the rating model used. Promotions Tab TypeYou use this tab to view and update job, grade, or position information. The summary displays information and graphs showing the number of jobs, grades, and positions changed. Detail Table Only Tab TypeThis tab displays only the detail table without any summary information. You can use it when summarized information is not appropriate. For example, you could set up a plan to capture information from managers or distribute data to managers where compensation is not allocated, performance ratings are not used, and promotions are not given. Worksheet Tab Types: ExamplesYou can use the worksheet tab types to display a variety of information depending on what tab type you include in the worksheet and what columns you enable. The following scenarios illustrate how you can use the tab types to design different compensation plans. Using Two Compensation Type Tabs to Allocate Merit and Stock AwardsYou create a plan that allows managers to award merit adjustments and stock during the same compensation cycle. You enable two compensation type tabs, the first one labeled Merit Adjustments and the other Stock Awards. You enable columns on the Merit Adjustments tab that include information necessary for managers to make informed salary decisions, such as current base pay, eligible salary, current and new compa-ratio, quartile, salary range low, and salary range high. You enable the merit adjustment amount column on this tab so managers can enter adjustment amounts. The Stock Awards tab includes columns such as job, length of service, or any company-specific measures or calculations that affect a manager's stock allocation decision. You enable the stock amount column on this tab. Using One Compensation Type Tab to Allocate Merit and Bonus Awards, View Performance Ratings, and PromoteYou create a plan that allows managers to award merit adjustments and bonuses, as well as promote workers, during the same compensation cycle. You enable one compensation type tab to allocate merit and bonuses and label it Compensation Awards. On this tab, you enable columns that include information necessary for managers to make informed salary decisions, such as current base pay, eligible salary, current and new compa-ratio, quartile, salary range low, salary range high, and performance rating, as well as columns that contain information needed to allocate stock. You also enable both the merit adjustment amount and the stock amount columns on this tab. To support promotions, you enable the job, new job, grade, and new grade columns so that managers can see their workers' current jobs and grades and promote workers to a new job or grade. Using the Performance Type Tab, Promotion Type Tab, And Compensation Type Tab to Rate Performance, Promote, and Allocate MeritYou create a plan that allows managers to rate worker performance, promote workers by changing their job, grade, or position, and award merit increases during the same compensation cycle. You enable a performance type tab and label it Rate Performance. You enable columns related to a worker's performance such as their length of service, job, grade, last rating date, last rating, and a column to enter their new performance rating. Note Performance ratings that you enter during a compensation cycle are used only within the compensation process and are not used outside the compensation tool. Then, you enable a promotion type tab and label it Promote Workers. You enable columns that help managers promote workers, such as time in grade, time in job, performance rating, potential, current job, current grade, current position, new job, new grade, and new position. Finally, you enable a compensation type tab and label it Allocate Compensation. You enable the columns that include information necessary for managers to make informed salary decisions, such as eligible salary, current base salary, new base salary, current and new compa-ratio, quartile, salary range low, and salary range high. You also enable the merit adjustment amount and merit adjustment percentage columns. Dynamic Calculations : ExplainedDynamic calculations are conditional statements, or expressions, that you use to calculate and display values that vary by worker or to change the value of one column based on the value of another. You build a condition by selecting worksheet columns, operators, and values, or by manually creating the condition. The aspects of dynamic calculations are:
Evaluation OrderYou enter an evaluation order to identify the order in which multiple dynamic columns are calculated when the results of one column is used in the condition or results of another. For example, you can define a Total Cash Compensation column that displays the sum of an automatically calculated COLA adjustment and a manager-entered merit adjustment. Define a dynamic column for the COLA adjustment for all workers that varies the adjustment by each worker's location and grade. Give this dynamic expression an evaluation order of 1. Give the Total Cash Compensation column an evaluation order of 2 so the application evaluates the COLA adjustment first and then uses that amount to display the Total Cash Compensation for each worker. Triggering EventsTriggering events are actions that determine when dynamic calculations are evaluated. Events that trigger evaluation or recalculation of dynamic columns are:
Default ExpressionThe default expression is the one to use when no other conditions are met. A condition must be met for the calculation to be performed. The system evaluates every condition in sequence order. If no result is met then the system uses the default condition. If you do not select a default expression and no conditions are met, the column displays no values. The default expression must be the highest sequence number because it is only applied after all other conditions are evaluated and determined not have been met. Using Dynamic Calculations: ExamplesUse these scenarios to understand how to use dynamic calculations to calculate and display a value or change the value of one column based on the value of another. Using Dynamic Calculations to Define Eligible SalaryYou are setting up the annual compensation plan. You want to base the bonus eligible salary on the current annual salary. Using dynamic calculations, you create an expression that moves the current annual salary amount into the Bonus Eligible Salary column when you start the compensation cycle. Using Dynamic Calculations to Define TargetsAs part of the annual bonus review you want to display bonus target amounts on the worksheet for managers to consider during allocations. Your company uses performance ratings and you want to use the ratings as the basis for the targets. Using dynamic calculations, you create expressions that vary the Bonus Target Amount by performance ratings. For example, if performance rating is Outstanding, then Bonus Target Amount equals 10 percent of Bonus Eligible Salary. Using One Column's Results in Another ExpressionAt your company managers can rate workers performance as part of the annual compensation cycle. As you set up the compensation plan you want to make sure that performance ratings are used as a basis for determining salary increase targets. For example, high performers have a target of 10 percent of eligible salary where average performers have a target of 5 percent of eligible salary. Using dynamic calculations, you create an expression for the Merit Eligible Salary and give it an Evaluation Order of 1. Then, you create another expression that defines the Target Compensation Percentage as a percentage of Merit Eligible Salary for each different performance rating and give it an Evaluation Order of 2. The application evaluates the Merit Eligible Salary first, and then uses it to calculate the Target Compensation Percentage. Creating Dynamic Calculations: Worked ExampleThis example demonstrates how to create a dynamic column for an annual bonus plan that rewards high performing workers. The following table summarizes key decisions for this scenario.
Create a dynamic calculation, build three expressions, and test the dynamic calculation. Prerequisites
Creating the Dynamic Calculation
Building the First Expression
Building the Second Expression
Building the Third Expression
Testing the Dynamic Calculation
Dimensions: ExplainedDimensions are attributes used to group data in reports or as criteria when building models. You can enable the dimensions that have meaning to your organization within the context of the plan. Some examples of delivered dimensions are country, department, years of service, performance management rating, location, job, position, and grade. Aspects of dimensions include:
Reporting UsageReports use dimensions to group data. For example, you can analyze compensation allocations by country and job to see how average allocations vary. Or, for a given manager's team, you can analyze salaries by performance rating and compa-ratio to verify data or correct pay discrepancies. Modeling UsageModels use dimensions as criteria to build models. For example, when you create a model to automatically allocate salary adjustment amounts you know that a worker's country or location will affect the allocation. You can select Country and Location as modeling criteria to model values for workers who meet each combination of criteria. Range IncrementsWhen aggregating data across people, you can define increments to display for compa-ratio, salary range position, and years employed. Graphs and tables do not show a separate data point for each person. Instead, they show people grouped within the increments defined. For example, when using compa-ratio to group data in reports, you might want to see workers grouped in increments of 10 percentage points, meaning that all workers whose compa-ratio falls between 80 and 90, for example, are grouped together. FAQs for Manage Compensation PlansWhat happens if I include ineligible workers on the worksheet?The worksheet displays ineligible workers but managers cannot allocate compensation, promote or rate worker performance. Managers or administrators can change an ineligible worker's status to eligible. What happens if my eligibility requirements are different for the components than they are for the plan?Plan level eligibility is evaluated before component level eligibility. A worker must be eligible for the plan to be eligible for a component. Each component can have different eligibility requirements. If a worker is found eligible for the plan, the worker might or might not be eligible for one or more components in the plan. What's the difference between worksheet manager and alternate approver?A worksheet manager is the worksheet owner responsible for allocating compensation to eligible workers, commonly the supervisor of the workers who appear on the worksheet. An alternate approver is a person defined as an approver of a worksheet. The person may not be part of the standard hierarchy or may be in a different position than in the standard approval hierarchy. The standard approval hierarchy is built using the hierarchy type defined for the plan. Can I change an alternate hierarchy?Yes. You can change the hierarchy of an already defined alternate approver without running the refresh process. But, if you want to add an alternate approver for a new person or delete one for an existing person after the start compensation cycle process has run, then you must refresh the data. Why are some columns already enabled in my new tab?Each tab type includes commonly used columns enabled by default. You can deselect the columns if you do not want them to appear on the worksheet. What's the difference between Basic and Advanced tabs in the Edit or Create Condition Rules window?The Basic tab takes you through a sequence of steps to create a condition and places the columns and operators in the correct position of the expression. On the Advanced tab, you can use the series of steps to create an expression, but you can also manually edit a condition by placing the cursor where you want to insert a column or operator, or create a condition by typing the names of columns and operators. Configure Global Compensation SettingsNotifications: ExplainedYou can send notifications when managers perform certain actions. The notifications settings configured here are common to all workforce compensation plans. The aspects of notifications are:
Notification OptionsFor each individual action you can set the notification to always be sent, to send only if the initiating manager chooses, or disable the notification altogether. You can use different notification options for different actions. For example, you can choose to always send notifications for all worksheet actions, send notifications for budget actions only if the manager chooses, and never send notifications when the plan access changes. Actions Requiring NotificationThe person who receives a notification varies depending on the type of action taken.
FAQs for Configure Global Compensation SettingsWhy did the default stock details change?More than one administrator might have access to these settings because this stock price and currency information is used to display stock in compensation history as well as when managing workforce compensation or generating total compensation statements. Define Eligibility ProfilesEligibility Components: How They Work TogetherYou add eligibility criteria to an eligibility profile, and then associate the profile with an object that restricts eligibility. The following figure shows the relationships between eligibility components. Eligibility CriteriaYou can add different types of eligibility criteria to an eligibility profile. For many common criteria, such as gender or employment status, you can select from a list of predefined criteria values. However, you must create user-defined criteria and derived factors before you can add them to an eligibility profile. Eligibility ProfileWhen you add an eligibility criterion to a profile, you define how to use it to determine eligibility. For example, when you add gender as a criterion, you must specify a gender value (male or female) and whether to include or exclude persons who match that value. Associating the Profile with ObjectsYou can associate an eligibility profile with different kinds of objects:
Derived Factors: ExplainedDerived factors define how to calculate certain eligibility criteria that change over time, such as a person's age or length of service. You add derived factors to eligibility profiles and then associate the profiles with objects that restrict eligibility. Derived Factor TypesYou can create six different types of derived factors: age, compensation, length of service, hours worked, full-time equivalent, and a combination of age and length of service. Determination Rules and Other SettingsFor each factor that you create, you specify one or more rules about how eligibility is determined. For example, the determination rule for an age derived factor specifies the day on which to evaluate the person's calculated age for eligibility. If the determination rule is set to the first of the year, then the person's age as of the first of the year is used to determine eligibility. For the full-time equivalent factor, you specify the minimum and maximum full-time equivalent percentage and whether to use the primary assignment or the sum of all assignments when evaluating eligibility. For example, if the percentage range is 90 to 100 percent for the sum of all assignments, then a person who works 50 percent full-time on two different assignments is considered eligible. Other settings define the unit of measure for time or monetary amounts, rounding rules, and minimums and maximums. Derived Factors: ExamplesThe following scenarios illustrate how to define different types of derived factors: AgeBenefits administrators frequently use age factors to determine dependent eligibility. You can also use age as a factor when determining life insurance rates. Age factors typically define a range of ages, referred to as age bands, and rules for evaluating the person's age. The following table illustrates a set of age bands that could be used to determine eligibility for life insurance rates that vary based on age.
The determination rule and other settings for each age band are the same:
Length of ServiceA derived factor for length of service defines a range of values and rules for calculating an employee's length of service. The following table illustrates a set of length-of-service bands that could be used to determine eligibility for compensation objects such as bonuses or severance pay.
The determination rule and other settings for each length-of-service band are the same:
CompensationA derived factor for compensation defines a range of values and rules for calculating an employee's compensation amount. The following table illustrates a set of compensation bands that could be used to determine eligibility for compensation objects such as bonuses or stock options.
The determination rule and other settings for each compensation band are the same:
Age to Use: Points to ConsiderThe Age to Use value that you select is an important aspect of an age derived factor. This value determines whose birth date is used to calculate the derived age. Selecting Person's Age to UseIn most cases, you use the Person's value in the Age to Use field to define an age derived factor for either a participant or dependent eligibility profile. In this case, each person's birth date is used to calculate the age criterion by which eligibility is evaluated for that person. ExampleFor example, if you select Person's as the Age to Use value, and associate the age derived factor with a dependent eligibility profile, each dependent's eligibility is evaluated based on the age calculated from his or her own birth date. Selecting Other Age to Use ValuesYou might select another predefined value in the Age to Use field if you intend to evaluate participant or dependent eligibility or rates based on someone else's age, such as a spouse, child, or other dependent. Note If you choose Inherited Age, the evaluation is based on the date of birth as defined in the person extra information flexfield. ExampleIf you select Person's oldest child as the Age to Use value, and associate this derived factor with a dependent eligibility profile, eligibility for all dependents is evaluated based on the age of the participant's oldest child. Consequently, when the oldest child reaches the maximum age of eligibility, for instance, all dependents become ineligible. User-Defined Criteria: ExplainedYou can define your own criteria to meet any special needs of your organization. For example, if your organization employs deep sea divers and offers different benefits or benefits rates based on how deep they dive, you can create Depth of Diving as a new eligibility criterion. The data for the eligibility criterion must be stored in a table that is accessible to the application. If the data is stored in either the Person or Assignment table, you can select the table and column from a list, and then specify the lookup type used to validate input values. You can also allow a range of valid values if the field stores a numeric value or a date. Note To select the correct values for the column and lookup fields, you must have a basic understanding of the structure of the table that stores the eligibility criterion information. If the data is stored in a table other than the Person or Assignment table, you must first create a formula to retrieve the data from the table, and then set the formula type to User-Defined Criteria. You can define two sets of criteria on the User-Defined Criteria page. The participant must meet the criteria defined in either set to be considered eligible (or to be excluded from eligibility if the Exclude check box is selected when the criteria is added to an eligibility profile). After you have created your user-defined criteria, you can add it to an eligibility profile. User-Defined Criteria: ExamplesThe following scenarios illustrate how to define different types of user-defined criteria. In each example, you must first create the user-defined criteria and then add it to an eligibility profile and set the criteria values to use in the profile. Set Eligibility Based on Custom AttributeA commercial diving company wants to offer different benefit rates to employees who dive to depths greater than 330 feet. This data is stored for each employee in a custom attribute called Dive_Depth in the Person table. To define eligibility based on diving depth, set the following values on the Create or Edit User-Defined Criteria page:
Save the user-defined criteria, and then add it to an eligibility profile. Set the following values on the User-Defined Criteria tab, which is under the Other tab on the Create or Edit Eligibility Profile page:
Save the eligibility profile and associate it with a variable rate profile. Exclude Work-at-Home Assignments from EligibilityAn employer wants to exclude work-at-home assignment from eligibility for a transportation benefit option. To accomplish this, set the following values on the Create or Edit User-Defined Criteria page:
Save the user-defined criteria, and then add it to an eligibility profile. Set the following values on the User-Defined Criteria tab:
Save the eligibility profile and associate it with the transportation benefit option. Use a Formula to Determine EligibilityA company wants to offer a spot incentive bonus to hourly employees who worked 100 percent of their scheduled shift hours in a three month period. To determine eligibility for the bonus, create a formula that calculates scheduled hours less worked hours for each week in the previous three months. If the result of successive calculations is less than or equal to zero, then the formula returns a result of Yes. The first step is to create the formula. Once the formula has been defined, create a user-defined criterion to run the formula. Enter the following values on the Create or Edit User-Defined Criteria page:
Save the user-defined criteria, and then add it to an eligibility profile. Set the following values on the User-Defined Criteria tab:
Save the eligibility profile and associate it with the bonus compensation object. Note For very complex scenarios, your organization or implementation team can write a custom program to evaluate eligibility, and then create a formula that calls the custom program. Range of Scheduled Hours: ExampleThis example illustrates how to define eligibility criteria based on the number of hours an employee is scheduled to work within a specified period of time. Weekly and Monthly RangesYou want to limit eligibility for a benefits offering to employees who were scheduled to work between 30 and 40 hours each week or between 130-160 each month as of the end of the previous quarter. To do this, add two different ranges on the Range of Scheduled Hours tab, which is under the Employment tab on the Create or Edit Eligibility Profile page. Set the values for the first range as shown in this table:
Set the values for the second range as shown in this table:
Eligibility Profiles: ExplainedAn eligibility profile defines criteria used to determine whether a person qualifies for a benefits offering, variable rate profile, variable coverage profile, compensation object, checklist task, or other object for which eligibility must be established. The following are key aspects of working with eligibility profiles:
Planning and PrerequisitesBefore you create an eligibility profile, consider the following:
Specifying Profile Types and UsageWhen you create an eligibility profile, you specify whether the profile applies to participants or dependents. Use participant profiles to define criteria for employees or ex-employees who are eligible for company-sponsored benefits. Use dependent profiles for participants' spouses, family members, or other individuals who qualify as dependents. Dependent profiles can be associated only with plans and plan types. An eligibility profile's usage determines the type of objects the profile can be associated with. For example, if you set the profile usage to Benefits, the profile is available for selection when you are associating eligibility profiles with benefits objects, such as programs, plans, plan types, options, variable rate profiles, and variable coverage profiles. You can also set the usage to Compensation, Checklist, or Global. Defining Eligibility CriteriaCriteria defined in an eligibility profile are divided into categories:
Some criteria, such as gender, provide a fixed set of choices. The choices for other criteria, such as person type, are based on values defined in tables. You can define multiple criteria for a given criteria type. Excluding from EligibilityFor each eligibility criterion that you add to a profile, you can indicate whether persons who meet the criterion are considered eligible or are excluded from eligibility. For example, an age factor can include persons between 20 and 25 years old or exclude persons over 65. If you exclude certain age bands, then all age bands not explicitly excluded are automatically included. Similarly, if you include certain age bands, then all age bands not explicitly included are automatically excluded. Assigning Sequence NumbersYou must assign a sequence number to each criterion. The sequence determines the order in which the criterion is evaluated relative to other criteria of the same type. Adding Multiple CriteriaIf you define multiple values for the same criteria type, such as two postal code ranges, a person needs to satisfy at least one of the criteria to be considered eligible. For example, a person who resides in either postal range is eligible. If you include multiple criteria of different types, such as gender and age, a person must meet at least one criterion defined for each criteria type. Viewing the Criteria HierarchySelect the View Hierarchy tab to see a list of all criteria that you have saved for this profile. The list is arranged by criteria type. Combining Eligibility Criteria or Creating Separate Profiles: Points to ConsiderYou can define multiple criteria in an eligibility profile or create separate profiles for individual criterion. To determine the best approach, consider the following:
Support for Multiple Eligibility ProfilesIf you are defining eligibility criteria for a checklist task, variable rate profile, or variable coverage profile, you must include all criteria in a single eligibility profile, because these objects can be associated with only one eligibility profile. You can, however, associate multiple eligibility profiles with benefits offerings and compensation objects. Efficiency and PerformanceFor optimum performance and efficiency, you should usually attach profiles at the highest possible level in the benefits object hierarchy and avoid duplicating criteria at lower levels. Plan types in program, plans in program, plans, and options in plans inherit the eligibility criteria associated with the program. For example, to be eligible for a benefits plan type, a person must satisfy eligibility profiles defined at the program level and at the plan type in program level. However, it is sometimes faster to create more than one profile and attach the profiles at various levels in the hierarchy. For example, you might exclude employees from eligibility at the program level who do not have an active assignment. At the level of plan type in program, you might exclude employees who do not have a full-time assignment. Finally, at the plan level, you might exclude employees whose primary address is not within a service area you define. Note Eligibility criteria can be used to include or exclude persons from eligibility. Sequencing of criteria is more complicated when you mix included and excluded criteria in the same profile. For ease of implementation, try to keep all excluded criteria in a separate eligibility profile. Creating a Participant Eligibility Profile: Worked ExampleThis example demonstrates how to create a participant eligibility profile used to determine eligibility for variable life insurance rates. The profile includes two eligibility criteria: age and tobacco. Once the eligibility profile is complete, you can associate it with a variable rate profile. The following table summarizes key decisions for this scenario.
The following figure shows the tasks to complete in this example: Note In this example, you create one eligibility profile that defines the requirements for a single variable rate. Typically, you create a set of eligibility profiles, one for each variable rate. When you have completed all steps described in this example, you can repeat them, varying the age and tobacco use criteria, to create a separate profile for each additional rate. Prerequisites
Creating the Eligibility Profile
Adding the Derived Factor for Age
Adding the Criteria for Tobacco Use
Associating the Eligibility Profile with a Variable Rate Profile
Eligibility Profiles: ExamplesThe following examples illustrate scenarios where eligibility profiles are needed and briefly describe the setup required for each scenario. 401(k) EligibilityA 401(k) savings plan is restricted to full-time employees under 65 years of age. To restrict eligibility for the plan, you must first create a derived factor for the age band of 65 and older, if one does not already exist. Then create an eligibility profile. Set the Profile Usage to Benefits and the Profile Type to Participant. Add the following criteria:
Associate the eligibility profile with the 401(k) plan. Bonus EligibilityA bonus is offered to all employees who received the highest possible performance rating in all rating categories. To restrict eligibility for the bonus, create an eligibility profile. Set the Profile Usage to Compensation and the Profile Type to Participant. Add the following criteria for each rating category:
Associate the eligibility profile with the bonus compensation object. Checklist Task EligibilityA new hire checklist contains tasks that do not apply to employees who work in India. To restrict eligibility for the tasks, create a participant eligibility profile. Set the Profile Usage to Checklist and the Profile Type to Participant. Add the following criteria:
Associate the eligibility profile with each checklist task that does not apply to workers in India. FAQs for Define Eligibility ProfilesWhat happens if I include multiple criteria in an eligibility profile?If you define multiple values for the same criteria type, such as two postal code ranges, a person needs to satisfy at least one of the criteria to be considered eligible. For example, a person who resides in either postal range is eligible. If you include multiple criteria of different types, such as gender and age, a person must meet at least one criterion defined for each criteria type. What happens if I do not select the Required option when I add an eligibility profile to an object?If you add only one eligibility profile to an object, then the criteria in that profile must be satisfied, even if the Required option is not selected. If you add multiple eligibility profiles, the following rules apply:
Which of the following refers to the learning plans and problem solving approaches used to achieve successful performance?The correct answer is E.
Task strategies refer to the plans and methods used while performing certain activities to deliver desired, expected, or anticipated outcomes.
Which type of belief prompt people to think that they have the capabilities needed to carry out the behaviors needed for a task?Self-efficacy refers to an individual's belief in having the required skills to perform a given task (Cassidy and Eachus, 1997). Noted social psychologist Albert Bandura defined it as 'a belief in one's own capabilities to organize and execute the course of action required to attain a goal' (Bandura, 1998).
Which theory suggests that employees create a mental ledger?Equity theory is a theory of motivation that suggests that employee motivation at work is driven largely by their sense of fairness. Employees create a mental ledger of the inputs and outcomes of their job and then use this ledger to compare the ratio of their inputs and outputs to others.
Is the set of energetic forces that originates both within and outside an employee initiates work related effort and determines its direction intensity and persistence?Work motivation "is a set of energetic forces that originate both within as well as beyond an individual's being, to initiate work-related behavior, and to determine its form, direction, intensity, and duration." Understanding what motivates an organization's employees is central to the study of I–O psychology.
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