The Salary review plan is generated based on the inputs provided during the New Salary Review Plan assistant or during the group salary planning. The information provided during these stages are global, which means the proposed increment Values are for the entire organization.
Example
A company will have 300 employees with the
current salary budget of 10,000 USD. And the company is planning to increase
this by a 2.5% this year. Which means the increment budget is 250 USD.
But this is for the company, and it is very unlikely that all employees in
the organization will get a 2.5% increment, some can get 1% increase while
some can get 2.5 or 3% increase. It is the HCM Professionals responsibility
to balance the increments among employees and make sure the overall budget
does not exceed 2.5%.
This activity is where the HCM Professional proposes employee level increments/changes.
The Proposed increment of an employee can change via two areas of salary review plan.
Organization List
In the Organization list the Proposed Increment and Proposed Increment Amount are editable. These columns indicate (when visited for the first time) what was proposed as a common increment during the generation of the salary review plan. (Based on above example it is 2.5% of current salary).
If an HCM Professional changes the Increment % the Proposed Increment Amount will automatically change. If this change was saved, the HCM Solution will update all the employees of the selected Organization with the new increment %.
Note - This will not happen to any employee whose Proposal Locked column in employee list is Marked as “Yes”, in this case the solution will omit this employee record and distribute the increments in a manner where the final output returns the increment % entered in the Organization list.
Example
There are 5 employees in the HR Department. Each Employees current Salary
in 1000 USD. Which means the Total Salary is 5000. The Proposed Increment
for the HR Department is 2%.
This Means Each Employee will get an
Increment of 20 USD.
Scenario 01
No Employees are
locked, HR Decides to make the Increment percentage 1% in the organization
list against the HR department which means the total increment amount is
simply 50USD.
In this case All 5 employees proposed increment amount
becomes 10USD.
Scenario 02
One Employee is
locked, HR Decides to make the Increment percentage 1% in the organization
list against the HR department which means the total increment amount is
simply 50USD.
In this case the locked employees 2% increase, the 20 USD
remains the same and the remaining amount gets distributed among 4 employees
as 7.5 USD each. This way the HR departments overall increment remains at
1%.
Employee List
In the employee list the Proposed Increment and Proposed Increment Amount
are editable. These columns indicate (when visited for the first time) what
was proposed as a common increment during the generation of the salary
review plan.
(Based on above example it is 2.5% of current salary).
An HCM Professional is given several fields to compare what is been
proposed to the employee. This includes information such as Range
Penetration, Compa Ratio which is calculated against the employees current
Job and the attached salary grades.
The HCM Professional can make
changes to the proposed increment amount or the Increment % provided the
employee record is not locked. If a change is made such as increase the
increment % or the Amount the solution will then calculate the new salary
proposed to the employee. The change made here will also reflect in the
employee’s Organization in the Organization list.
If the Organization has a positive balance, the respective amounts will be deducted from the balance and added to the proposed increment budget. If the Organization has no balance, the HCM Professional will need to compensate this from another employee’s salary proposal (by reducing other employees increment) or transfer some budget from a different organization to the employee’s organization.
There are a number of support activities present in both Organization and Employee Lists such as, Lock Employee, fix increment, Set Minimum Increment, Transfer Balance, View Employee Analytics kindly refer to the relevant activity documentations to learn on the same.
A Salary Plan is Updated.
N/A