Distribution of salary and bonus awards is controlled by formulas. Formulas are defined and stored on the Employment Record object, then linked to Compensation Planning to make them available for selection when defining a Plan.
You can define the following types of formula:
- Projection formulas define how an award is calculated. Calculation can be a simple flat rate for all employees or it can use a more complex formula depending on a combination of values held in Sage People including:
- Current salary
- Performance rating
- Competency or skill assessment
- Time in grade or employment
- Eligibility formulas define who can receive an award.
- Exclusion formulas define who is to be excluded from a Compensation Plan.
- Bonusable Salary formulas define a base salary for requested bonus payments.
You define formulas as fields on the HCM Employment Record, add them to the Compensation Planning Configure page, and then select the formulas you require when setting up each Plan. You can define multiple formulas of each type and add them all to the Configure page - formulas included on the Configure page are listed for selection when creating a Plan. If a formula is not included on the Configure page you cannot select it for a Plan.
Some formula types are required, such as the Projection formulas - you cannot define a Plan without one - while others are optional. Each Compensation Plan can use the following formula fields:
Bonus planning:
- Required: a Bonus Projection formula, defining how suggested bonus awards are calculated. Each formula must return a number or currency. A Bonus Projection formula can reference a Bonusable Salary formula as part of the definition.
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Optional: a Bonus Eligibility Formula to filter Team Members who are eligible for a bonus award. By default all Team Members are deemed eligible, so an eligibility formula enables you to define a subset for an award. The formula must be of type checkbox and return True or False.
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Team Members who return True are eligible, included in the Plan, and can be edited.
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Team Members who return False are not eligible and are grayed out on the Plan.
Example: a formula to include all Team Member assigned to a specific Policy, or Department.
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Optional: a Bonus Exclusion formula to filter Team Members who are not eligible for a bonus award. By default all Team Members are deemed eligible, so an exclusion formula enables you to exclude a subset from an award. The formula must be of type checkbox and return True or False.
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Team Members who return True are completely excluded from the Plan.
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Team Members who return False are included in the Plan and can be edited.
Example: a formula to exclude Team Members with a start date in the last six months.
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Optional: a Bonusable Salary formula to use for requested Bonus calculation, specifying the salary amount to use when calculating a bonus. You can use non-formula data type fields to supply the calculation, such as a roll-up summary field, a currency field, or an average salary field populated by a Payroll system. If defined as a formula data type the formula must return a number or currency. If you do not define a Bonusable Salary formula Sage Peopleuses the Team Member's current Annual Salary as the base for Bonus calculation. Using Annual Salary can produce unwanted results:
For example, a Team Member who received a promotion and a significant salary increase a month before the bonus calculation is made would have their bonus entitlement based on the new Annual Salary. Many organizations prefer to assess bonus amounts on the average salary paid over the previous 12 months. The Bonusable Salary feature enables you to calculate bonus amount based on values other than current annual salary.
You can reference a Bonusable Salary formula as part of your definition of a Bonus Projection formula.
Salary planning:
- Required: a Salary Projection formulas defining how suggested salaries are calculated. Each formula must return a number or currency.
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Optional: a Salary Eligibility formula to filter Team Members who are eligible for salary awards. The formula must return True or False.
- Team Members who return True are eligible, included in the Plan, and can be edited.
- Team Members who return False are not eligible and are grayed out on the Plan. The salaries of non-eligible Team Members are still included in total budget figures.
Example: a formula to include all Team Members assigned to a specific Country, or Manager.
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Optional: a Salary Exclusion formula to filter Team Members who are not eligible for salary awards. The formula must return True or False.
- Team Members who return True are completely excluded from the Plan.
- Team Members who return False are included in the Plan and can be edited.
Example: a formula to exclude Team Members who are paid more than the maximum for their grades.
If a Compensation Plan is used for both Bonus and Salary planning, you need both Bonus planning and Salary planning formula fields.