Setting up compensation plans in Oracle Fusion involves configuring various components like plan types, eligibility profiles, performance ratings, budget pools, etc. Here’s an outline of how to configure these components in Oracle Fusion HCM:
1. Navigate to Compensation Work Area
- Go to Navigator > Compensation > Manage Compensation Plans.
2. Create a Compensation Plan
- In the compensation work area, click on Create Compensation Plan.
- Define the Basic Information of the plan, including:
- Plan Name
- Plan Type (Salary, Bonus, Stock, etc.)
- Plan Period
- Default Currency
3. Set Up Eligibility Profiles
- Define Eligibility Profiles to determine which employees qualify for the compensation plan.
- Go to Eligibility > Manage Eligibility Profiles.
- Set criteria like job roles, grade, location, employment type, etc.
- You can assign this eligibility profile to your plan to filter the employees eligible for the plan.
4. Configure Plan Components
Plan components include the compensation items like merit increases, bonuses, stock options, etc. You can create different components for different compensation types.
- Go to Manage Plan Components:
- Define Salary Components, Bonus Components, or other relevant components.
- Each component will require specific details like:
- Budgeting rules (Percentage-based, fixed, etc.)
- Funding source (Department, company, etc.)
- Formulas to calculate the compensation for employees.
5. Set Up Budget Pools
- In Manage Compensation Budgets, create budget pools for the compensation plan.
- Assign a budget pool to control the amount of money allocated to each department, business unit, or organization for compensation.
- Define how budgets will be distributed among managers, and assign limits.
6. Define Performance Ratings
- To link compensation to performance, configure performance ratings.
- Navigate to Performance Ratings and create a set of ratings (e.g., Outstanding, Exceeds Expectations, Meets Expectations).
- These ratings can later be used in formulas to drive compensation decisions.
7. Configure Worksheets
- Managers will use Compensation Worksheets to view eligible employees and make compensation decisions.
- Go to Manage Compensation Plan Worksheets and design the layout for managers to input compensation amounts for employees.
- Define the columns such as salary, performance rating, proposed increase, and final compensation.
8. Review and Approve the Plan
- Once the plan is fully set up, review it for any errors.
- Submit the plan for Approval if needed by stakeholders before rolling it out.
9. Test the Plan
- It’s a good practice to run a test of the compensation plan to ensure everything is configured correctly.
- Use sample employees to simulate compensation changes and verify results.
10. Launch the Plan
- Once approved, launch the plan for managers to use.
- Managers will receive notifications to log into Oracle Fusion and complete compensation for their teams.
Key Plan Components to Configure:
- Eligibility Profiles – Define who qualifies for the plan.
- Compensation Components – Define merit increases, bonus payouts, etc.
- Budget Pools – Set funding for different departments or business units.
- Performance Ratings – Link compensation to performance evaluations.
- Worksheets – Create templates for managers to use.
This approach allows organizations to create tailored and flexible compensation plans within Oracle Fusion HCM to fit their compensation strategy.
Comp Plan Setups- Configure Plan Components