Oracle Human Resources Management SystemsCompensation and Benefits Management Guide Release 12Part No. B31613-02

December 2006

Oracle Human Resources Management Systems Compensation and Benefits Management Guide, Release 12 Part No. B31613-02 Copyright 2000, 2006, Oracle. All rights reserved. Primary Author: Juliette Fleming Contributing Author: Jeffrey Erickson, Keith Ekiss, Pragya Nair, Vijaygopal Mungamuru, Samuel Thomas, Manish Agrawal, Michele Chung, Ty Hayden, Maya Morishita, Denise Wollenberg The Programs (which include both the software and documentation) contain proprietary information; they are provided under a license agreement containing restrictions on use and disclosure and are also protected by copyright, patent, and other intellectual and industrial property laws. Reverse engineering, disassembly, or decompilation of the Programs, except to the extent required to obtain interoperability with other independently created software or as specified by law, is prohibited. The information contained in this document is subject to change without notice. If you find any problems in the documentation, please report them to us in writing. This document is not warranted to be error-free. Except as may be expressly permitted in your license agreement for these Programs, no part of these Programs may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose. If the Programs are delivered to the United States Government or anyone licensing or using the Programs on behalf of the United States Government, the following notice is applicable: U.S. GOVERNMENT RIGHTS Programs, software, databases, and related documentation and technical data delivered to U.S. Government customers are "commercial computer software" or "commercial technical data" pursuant to the applicable Federal Acquisition Regulation and agency-specific supplemental regulations. As such, use, duplication, disclosure, modification, and adaptation of the Programs, including documentation and technical data, shall be subject to the licensing restrictions set forth in the applicable Oracle license agreement, and, to the extent applicable, the additional rights set forth in FAR 52.227-19, Commercial Computer Software--Restricted Rights (June 1987). Oracle Corporation, 500 Oracle Parkway, Redwood City, CA 94065. The Programs are not intended for use in any nuclear, aviation, mass transit, medical, or other inherently dangerous applications. It shall be the licensee's responsibility to take all appropriate fail-safe, backup, redundancy and other measures to ensure the safe use of such applications if the Programs are used for such purposes, and we disclaim liability for any damages caused by such use of the Programs. The Programs may provide links to Web sites and access to content, products, and services from third parties. Oracle is not responsible for the availability of, or any content provided on, third-party Web sites. You bear all risks associated with the use of such content. If you choose to purchase any products or services from a third party, the relationship is directly between you and the third party. Oracle is not responsible for: (a) the quality of third-party products or services; or (b) fulfilling any of the terms of the agreement with the third party, including delivery of products or services and warranty obligations related to purchased products or services. Oracle is not responsible for any loss or damage of any sort that you may incur from dealing with any third party. Oracle, JD Edwards, PeopleSoft, and Siebel are registered trademarks of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.

Contents

Send Us Your Comments Preface 1 General Compensation StructuresGeneral Compensation Structures Overview........................................................................... 1-1 General Compensation Structures............................................................................................ 1-4 Elements.................................................................................................................................... 1-8 Elements: Building Blocks of Pay and Benefits.................................................................... 1-8 Input Values: Flexible Description of Compensation.........................................................1-11 Rules for Allocating Compensation................................................................................... 1-11 Compensation Entry: Making It Fast and Reliable.............................................................1-13 Element Classifications and Processing Sequence............................................................. 1-17 Compensation Policy Changes.......................................................................................... 1-19 Setting Up Total Compensation Elements......................................................................... 1-20 Defining an Element.......................................................................................................... 1-22 Defining an Element's Input Values...................................................................................1-29 Defining and Linking an Element for Standard and Advanced Benefits........................... 1-31 Deleting an Element........................................................................................................... 1-33 Defining Element Links..................................................................................................... 1-34 Running the Element Link Details Report......................................................................... 1-36 Defining an Element or Distribution Set............................................................................ 1-37 Compensation Entry and Reporting....................................................................................... 1-40 Compensation Entry.......................................................................................................... 1-40 Compensation Reporting................................................................................................... 1-41 HR/Payroll Extracts............................................................................................................1-42 Making Manual Element Entries....................................................................................... 1-46

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Adjusting a Pay Value....................................................................................................... 1-49 Deleting Element Entries................................................................................................... 1-50 Listing Employees by Element........................................................................................... 1-51 Viewing Element Entry History......................................................................................... 1-52 Configuring the HR/Payroll Extracts................................................................................. 1-52 Running the HR/Payroll Extracts....................................................................................... 1-55 Compensation Objects............................................................................................................ 1-58 Plan Design........................................................................................................................ 1-58 Reimbursement Plans.................................................................................................. 1-65 Plan Design Copy.............................................................................................................. 1-65 Special Requirements for Plan Design............................................................................... 1-70 Reporting Groups.............................................................................................................. 1-72 Defining a Benefits Program.............................................................................................. 1-73 Associating Plans and Plan Types with a Program............................................................ 1-75 Defining Waive Reasons for Plan Types in a Program (Advanced Benefits)..................... 1-77 Defining Participation Eligibility Criteria for a Compensation Object...............................1-78 Associating a Life Event Reason with a Compensation Object (Advanced Benefits).........1-80 Associating an Organization with a Benefits Program...................................................... 1-82 Associating Reporting Groups with a Program................................................................. 1-83 Associating Program or Plan Year Periods with a Program.............................................. 1-83 Defining Plan Types........................................................................................................... 1-84 Setting Up Spending Account Plans for Forfeitures (Advanced Benefits)......................... 1-85 Defining a Benefits Plan..................................................................................................... 1-86 Defining Eligibility and Activity Rate Requirements for a Plan.........................................1-89 Defining Plan Restrictions..................................................................................................1-90 Defining a Maximum Waiting Period Requirement for a Plan.......................................... 1-91 Defining a Plan Not in Program.........................................................................................1-92 Associating Options with a Plan........................................................................................ 1-93 Maintaining Plan Related Details.......................................................................................1-95 Defining Combinations of Plans and Plan Types............................................................... 1-98 Defining Waive Reasons for a Plan (Advanced Benefits)...................................................1-98 Maintaining Primary Care Providers for a Plan.................................................................1-99 Defining Options............................................................................................................. 1-102 Navigating the Program Structure Hierarchy.................................................................. 1-103 Defining a Program or Plan Year Period..........................................................................1-104 Defining a Reimbursement Plan (Advanced Benefits)..................................................... 1-105 Defining Reimbursable Goods and Service Types........................................................... 1-108 Copying a Program or Plan............................................................................................. 1-108 Exporting a Plan Design to a File..................................................................................... 1-112 Importing a Plan Design From a File............................................................................... 1-112 Purging Plan Design Copy Data...................................................................................... 1-113

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Defining a Reporting Group............................................................................................ 1-114 Defining Regulatory Bodies for a Plan............................................................................. 1-115 Defining Regulations for a Plan....................................................................................... 1-116 Benefits Eligibility................................................................................................................ 1-117 Eligibility Requirements for Total Compensation............................................................1-117 Waiting Periods............................................................................................................... 1-120 Continuing Eligibility: Benefits Assignments.................................................................. 1-122 Eligibility Profile Criteria................................................................................................. 1-124 User-defined Eligibility Criteria....................................................................................... 1-127 Derived Factors................................................................................................................ 1-128 Defining an Eligibility Profile.......................................................................................... 1-129 Defining Your Own Eligibility Criteria............................................................................ 1-132 Defining Derived Factors: Compensation Level.............................................................. 1-133 Defining Derived Factors: Percent of Full Time Employment......................................... 1-135 Defining Derived Factors: Hours Worked In Period........................................................1-136 Defining Derived Factors: Age......................................................................................... 1-137 Defining Derived Factors: Length of Service................................................................... 1-138 Defining Derived Factors: Combination Age and Length of Service............................... 1-139 Defining a Dependent Coverage Eligibility Profile.......................................................... 1-140 Defining Benefits Groups................................................................................................. 1-141 Defining Regulations....................................................................................................... 1-141 Defining Postal Zip Ranges.............................................................................................. 1-142 Defining Service Areas..................................................................................................... 1-142

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Salary, Grades, and Pay AdministrationSalary, Grades, and Pay Administration Overview................................................................. 2-1 Salary, Grades, and Pay Administration.................................................................................. 2-4 Salary Administration Setup.................................................................................................... 2-7 Salary Earnings Elements.....................................................................................................2-7 Salary Basis.......................................................................................................................... 2-7 Salary Components.............................................................................................................. 2-8 Setting Up Salary Administration........................................................................................ 2-9 Creating a Salary Element.................................................................................................. 2-10 Linking the Salary Element................................................................................................ 2-11 Validating Salary Entries................................................................................................... 2-12 Creating Salary Components............................................................................................. 2-13 Defining a Salary Basis ...................................................................................................... 2-13 Salary Administration............................................................................................................. 2-15 Starting Salary and Salary Proposals................................................................................. 2-15 Salary Spreadsheets........................................................................................................... 2-16

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Using the Salary Management Folder................................................................................ 2-17 Reviewing Current Salaries............................................................................................... 2-20 Viewing Salary History...................................................................................................... 2-21 Running the Salary Review Report.................................................................................... 2-22 Compensation Surveys............................................................................................................ 2-23 Compensation Survey Identifiers...................................................................................... 2-23 Entering Compensation Surveys........................................................................................2-24 Mapping Compensation Survey Lines............................................................................... 2-26 Grades and Pay Setup............................................................................................................. 2-27 Grades and Grade Structures............................................................................................. 2-27 Recognizing Your Grade Implementation Model.............................................................. 2-28 Implementing Grade Related Pay...................................................................................... 2-32 Grade Rates to Relate Pay to Grades.................................................................................. 2-33 Pay Scales to Relate Pay to Grades..................................................................................... 2-35 Grade/Step Progression..................................................................................................... 2-36 Setting Up a Grade Ladder................................................................................................ 2-42 Defining a Grade................................................................................................................ 2-46 Deleting Grades................................................................................................................. 2-47 Defining a Grade Rate........................................................................................................ 2-47 Defining a Pay Scale........................................................................................................... 2-48 Defining Scale Rates........................................................................................................... 2-49 Relating Grades to Progression Points............................................................................... 2-49 Grades and Pay Administration..............................................................................................2-51 Grades and Pay Administration........................................................................................ 2-51 Increment Progression Points Process............................................................................... 2-56 Placing an Employee on a Grade Step............................................................................... 2-57 Viewing Grade Comparatios............................................................................................. 2-58 Running the Batch Enrollment - Grade/Step Progression Process..................................... 2-59 Running the Participation Process: Grade Step..................................................................2-60 Running the Rank Employees for Grade/Step Progression Process...................................2-61 Approving and Rejecting Grade/Step Progression (Manual).............................................2-62 Process Employees Progressed Manually.......................................................................... 2-63 Running the Recalculate Participant Values: Grade/Step Progression process ................. 2-64 Running the Purge GSP Transactions in Staging Table Process.........................................2-66 Incrementing Grade Step Placements (Without Using Grade Ladders).............................2-67 Running the Current and Projected Progression Point Values Report ..............................2-69 Running the Employee Increment Results Report ............................................................ 2-71 Criteria-Based Rates................................................................................................................ 2-72 Criteria-Based Rates for Variable Pay................................................................................ 2-72 Setting Up a Rate Matrix.................................................................................................... 2-74 Workforce Intelligence Key Concepts for Salary, Grades, and Pay Administration............ 2-76

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Key Concepts for Salary, Grades, and Pay Administration Intelligence............................ 2-76 Workforce Intelligence for Salary, Grades, and Pay Administration.................................... 2-78 Employee Primary Assignment with Salary and Grade Rate Detail Workbook................ 2-78 Employee Primary Assignment with Salary Detail Workbook.......................................... 2-80 Employee Salary Change Detail Workbook....................................................................... 2-82 Employee Salary Change Workbook................................................................................. 2-84 Employee with Tenure Detail Workbook.......................................................................... 2-87

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Compensation and Awards ManagementCompensation and Awards Management Overview............................................................... 3-1 Compensation Awards Management: Requirements.............................................................. 3-3 Compensation Workbench........................................................................................................3-8 Compensation Workbench Overview.................................................................................. 3-8 Key Decision Areas in Compensation Workbench.............................................................. 3-9 Compensation Workbench (SSHR Components)...............................................................3-12 Compensation Plan Design..................................................................................................... 3-18 Plan Design for Compensation Workbench....................................................................... 3-18 Budgeting in Compensation Workbench........................................................................... 3-21 Promotion and Rating in Compensation Workbench........................................................ 3-22 Standard Rates for Compensation Workbench.................................................................. 3-23 Setting Up a Basic Plan...................................................................................................... 3-30 Setting Up a Component Plan............................................................................................ 3-35 Setting Up a Combination Plan.......................................................................................... 3-41 Setting Up Compensation Workbench Plans..................................................................... 3-48 Defining a Compensation Workbench Plan....................................................................... 3-53 Defining Enrollment Requirements for Compensation Workbench Plans.........................3-55 Controlling Access, Eligibility, and Award Amounts............................................................ 3-61 Hierarchies for Award Allocations and Approvals........................................................... 3-61 Access Levels in Compensation Workbench......................................................................3-62 Switch Manager................................................................................................................. 3-63 Approval Modes................................................................................................................ 3-63 Eligibility, Award Limits and Targets................................................................................ 3-64 Worksheet and Budget Sheet Configuration.......................................................................... 3-65 Configure Worksheet and Budget Sheets.......................................................................... 3-65 Personalize By Plan............................................................................................................ 3-71 Configuring Descriptive Flexfields Within Compensation Workbench.............................3-72 Configuring Dynamic Columns Within Compensation Workbench................................. 3-73 Configuring Custom Columns Within Compensation Workbench................................... 3-75 Configuring Employee Statements For Use by Managers Within Compensation Workbench ........................................................................................................................................... 3-76 Capturing Grant Price With a Stock Option Element Entry...............................................3-78

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Reports and Notifications....................................................................................................... 3-80 Reports in Compensation Workbench............................................................................... 3-80 Notifications in Compensation Workbench....................................................................... 3-83 Compensation Detail Report.............................................................................................. 3-84 Combined Plan View Report............................................................................................. 3-85 Employee Stock Option History Report............................................................................. 3-85 Flexible Summary Report.................................................................................................. 3-86 Administration Progress Report........................................................................................ 3-86 Employee Compensation History Report.......................................................................... 3-87 Audit History Report......................................................................................................... 3-88 Manager Feedback Report................................................................................................. 3-89 Salary Statistics Report....................................................................................................... 3-89 Post Process Run Reports................................................................................................... 3-91 Plan Administration................................................................................................................ 3-93 Maintain Compensation Workbench Plans Mid-Cycle ..................................................... 3-93 Steps to Administer Compensation Workbench Plans...................................................... 3-95 Opening a Compensation Workbench Award Cycle......................................................... 3-97 Publishing a Budget........................................................................................................... 3-99 Backing out a Compensation Workbench Plan.................................................................. 3-99 Adding an Individual into a Started Compensation Workbench Cycle...........................3-101 Writing Allocated Amounts from the Compensation Workbench Cycle.........................3-102 Refreshing Compensation Workbench Data.................................................................... 3-103 Creating Mass Notifications for Compensation Workbench............................................3-105 Closing a Compensation Workbench Award Cycle......................................................... 3-106 Individual Compensation Distribution................................................................................ 3-109 Self-Service Individual Compensation Distribution........................................................ 3-109 Individual Compensation Distributions (SSHR Components)........................................ 3-110 Setting Up Individual Compensation Distributions for Employees and iRecruitment Applicants........................................................................................................................ 3-111 Compensation History.......................................................................................................... 3-123 Compensation History..................................................................................................... 3-123 Compensation History Views.......................................................................................... 3-124 Compensation History Menu and Function Names........................................................ 3-128 Setting Up Compensation History................................................................................... 3-130 Setting Up Compensation History for ICD Plans............................................................ 3-130 Setting Up Compensation History for Entries Created from Element Entries................. 3-130 Personalizing Sub-tabs for Compensation History ......................................................... 3-132 Total Compensation Statement............................................................................................. 3-134 Total Compensation Statement Overview....................................................................... 3-134 Key Decision Areas in Total Compensation Statement.................................................... 3-135 Total Compensation Statement (SSHR Components)...................................................... 3-137

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Setting Up Total Compensation Statement...................................................................... 3-138 Processing and Reporting for Total Compensation Statements....................................... 3-143 Generating Employee Statements.................................................................................... 3-144 Purging Employee Statements......................................................................................... 3-145 Reopening Welcome Pages.............................................................................................. 3-146 Total Compensation Statements Batch Process Run Reports........................................... 3-147 Vehicle and Mileage Processing........................................................................................... 3-149 Vehicle Repository........................................................................................................... 3-149 Vehicle Repository Menu and Function Names...............................................................3-150 Configuration Settings for Vehicle Repository and Mileage Claims................................ 3-151

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Leave and Absence ManagementLeave and Absence Management Overview............................................................................ 4-1 Leave and Absence Management..............................................................................................4-3 Absence Management Setup..................................................................................................... 4-5 Absence Categories and Types............................................................................................ 4-5 Absence Elements................................................................................................................ 4-7 Setting Up Absence Management...................................................................................... 4-10 Defining and Linking an Absence Element ....................................................................... 4-12 Defining an Absence Type................................................................................................. 4-14 Setting Up an Absence Benefit Plan................................................................................... 4-15 PTO Accruals Setup................................................................................................................ 4-23 Accrual Plan Structure....................................................................................................... 4-23 Accrual Elements............................................................................................................... 4-25 Accrual Formulas............................................................................................................... 4-27 Accrual Balances Maintained By the Payroll Run.............................................................. 4-28 Net Accrual Calculation..................................................................................................... 4-31 Seeded Accrual Type Formulas......................................................................................... 4-32 Accrual Start Date for New Hires...................................................................................... 4-39 Accrual Bands.................................................................................................................... 4-41 PTO Carry Over Process.................................................................................................... 4-42 Accrual Plan Example........................................................................................................ 4-44 Setting Up PTO Accrual Plans........................................................................................... 4-45 Defining a PTO Accrual Plan ............................................................................................ 4-48 Setting Up Length of Service Bands................................................................................... 4-50 Changing Net Accrual Calculations................................................................................... 4-51 Costing Liability For PTO Accruals................................................................................... 4-52 Absence and Accrual Plan Administration............................................................................ 4-54 Absence Recording............................................................................................................ 4-54 Accrual Plan Administration............................................................................................. 4-56

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Entering Absences..............................................................................................................4-58 Enrolling Employees in PTO Accrual Plans....................................................................... 4-62 Running the Participation Process: Absence...................................................................... 4-63 Running the PTO Carry Over Process............................................................................... 4-64 Reviewing Employees' PTO Accruals ............................................................................... 4-66 Viewing Absence History.................................................................................................. 4-67 Listing Employees by Absence Type................................................................................. 4-67 Running the Absences Report ........................................................................................... 4-67 Resetting a Stored Accrual Balance.................................................................................... 4-68 Workforce Intelligence Key Concepts for Leave and Absence Management .......................4-70 Workforce Intelligence Key Concepts for Leave and Absence Management..................... 4-70 Workforce Intelligence for Leave and Absence Management .............................................. 4-72 Employee on Leave Detail Workbook................................................................................4-72

5

Setup for Health and Welfare ManagementSetup for Health and Welfare Management Overview............................................................5-1 Advanced Benefits Setup: Overview..................................................................................5-3 Standard and Advanced Benefits Implementation.................................................................. 5-6 Self-Service Benefits Enrollments............................................................................................ 5-9 Self-Service Benefits Enrollments......................................................................................... 5-9 Benefits Enrollments.......................................................................................................... 5-17 Setting Up Self-Service Benefits Enrollments..................................................................... 5-35 Enabling Self-Service Benefits Enrollment Notifications....................................................5-37 Setting Up User Access to Self-Service Benefits................................................................. 5-38 Setting the Effective Date of a Scheduled Enrollment in Self-Service Benefits...................5-41 Configuring Unrestricted Program Enrollment Processing............................................... 5-42 Defining Self-Service Instruction Text................................................................................5-44 Configuring the Primary Care Provider Search Facility.................................................... 5-45 Generating Self-Service Benefits Trace Files...................................................................... 5-49 Life Events............................................................................................................................... 5-52 Life Event Reasons............................................................................................................. 5-52 Collapsing Life Events (Advanced Benefits)...................................................................... 5-57 Seeded Life Event Reasons.................................................................................................5-58 Life Event Definition (Advanced Benefits)........................................................................ 5-61 Defining General Characteristics of Life Event Reasons.................................................... 5-62 Defining Person Changes .................................................................................................. 5-65 Associating a Person Change with a Life Event ................................................................ 5-67 Defining a Collapsing Life Event (Advanced Benefits)...................................................... 5-67 Benefit Enrollment Requirements.......................................................................................... 5-69 Enrollment Requirements.................................................................................................. 5-69

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Enrollment Types............................................................................................................... 5-73 Enrollment Codes.............................................................................................................. 5-75 Enrollment Period Determination for Life Events............................................................. 5-77 Reinstatement of Elections for Reprocessed Life Events.................................................... 5-79 Dependent Coverage and Beneficiary Designation Requirements.................................... 5-79 Defining Enrollment Methods for a Program.................................................................... 5-80 Defining Coverage Requirements for a Program............................................................... 5-81 Defining an Action Item Due Date (Advanced Benefits)................................................... 5-82 Defining Activity Rate Enrollment Requirements for a Program...................................... 5-82 Defining Enrollment Requirements for Plan Types in a Program......................................5-83 Defining Enrollment Limitations for Plan Types in a Program..........................................5-84 Defining Enrollment Requirements for a Plan in a Program............................................. 5-85 Defining Coverage Requirements for a Plan in a Program................................................ 5-86 Defining Coverage Start and End Dates for a Plan Type in a Program..............................5-86 Defining Activity Rate Start and End Dates for a Plan in a Program................................. 5-87 Defining Activity Rate Start and End Dates for a Plan Type in a Program........................ 5-87 Defining a Scheduled Enrollment for a Program............................................................... 5-88 Defining Requirements for a Life Event Enrollment for a Program (Advanced Benefits) ........................................................................................................................................... 5-90 Defining Enrollment Periods for Life Event Enrollments for a Program (Advanced Benefits) ........................................................................................................................................... 5-91 Defining Coverage and Activity Rate Periods for a Plan in a Program..............................5-92 Associating an Enrollment Rule with a Program............................................................... 5-93 Defining Life Event Enrollment Requirements.................................................................. 5-93 Defining Dependent Coverage Enrollment Requirements for a Program or a Plan Type in Program............................................................................................................................. 5-94 Defining Dependent Coverage Certifications for a Program............................................. 5-96 Defining Dependent Coverage Eligibility Profiles for a Program...................................... 5-96 Defining Dependent Coverage Eligibility Profiles for a Plan Type in a Program.............. 5-97 Defining Dependent Coverage Change of Life Event Enrollment Requirements.............. 5-97 Defining Dependent Coverage Certifications for Change of Life Event Enrollment Requirements..................................................................................................................... 5-98 Defining an Enrollment Method for a Plan........................................................................ 5-99 Defining Enrollment Coverage Requirements for a Plan................................................. 5-100 Defining Activity Rates Requirements for a Plan.............................................................5-103 Defining Enrollment Limitations for a Plan..................................................................... 5-104 Defining Designation Enrollment Requirements for a Plan or Option in Plan................ 5-104 Defining Enrollment Requirements for Not in Program Plans........................................ 5-105 Defining Enrollment Requirements for Options in a Plan............................................... 5-106 Defining Enrollment Limitations for an Option in a Plan................................................ 5-107 Defining a Scheduled Enrollment for a Plan.................................................................... 5-108

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Associating Enrollment Rules with a Plan....................................................................... 5-110 Defining Requirements for a Life Event Enrollment for a Plan (Advanced Benefits)...... 5-110 Defining a Life Event Enrollment Period for a Plan (Advanced Benefits)....................... 5-111 Defining Life Event Enrollment Certifications for a Plan or Option in Plan (Advanced Benefits)........................................................................................................................... 5-112 Defining Life Event Enrollment Requirements for a Not in Program Plan...................... 5-113 Defining Life Event Enrollment Requirements for an Option in a Plan........................... 5-114 Defining Dependent Coverage Requirements for a Plan................................................. 5-115 Defining Dependent Coverage Eligibility Profiles for a Plan...........................................5-117 Defining Dependent Coverage Change of Life Event Enrollment Requirements for a Plan ......................................................................................................................................... 5-117 Defining Certifications for Enrollment in a Plan.............................................................. 5-118 Defining Beneficiary Designation Requirements for a Plan............................................. 5-119 Activity Rates and Coverage Calculations............................................................................ 5-122 Activity Rates................................................................................................................... 5-122 Coverage Calculations............................................................................................... 5-127 Interim Coverage (Advanced Benefits)..................................................................... 5-128 Unsuspended Enrollments (Advanced Benefits)....................................................... 5-130 Imputed Income Calculations (US only)................................................................... 5-131 Actual Premium Calculations....................................................................................5-131 Period-to-Date Limits................................................................................................ 5-134 Variable Rate Factors....................................................................................................... 5-135 Calculation Methods: Values, Increments, and Operations............................................. 5-138 Activity Rate Calculations................................................................................................5-139 Coverage Calculations..................................................................................................... 5-142 Actual Premium Calculations.......................................................................................... 5-144 Defining Activity Rates for a Standard Contribution/Distribution.................................. 5-145 Defining a Calculation Method for a Standard Contribution or Distribution.................. 5-147 Defining Proration for a Standard Contribution/Distribution Calculation...................... 5-147 Defining Characteristics of Annual Rates........................................................................ 5-149 Defining Processing Information for a Standard Contribution/Distribution................... 5-150 Defining Deduction and Payment Schedules for a Standard Contribution/Distribution ......................................................................................................................................... 5-152 Defining a Non-Oracle Payroll System to Process Benefit Earnings and Deductions...... 5-153 Associating a Variable Rate Profile with a Standard Contribution/Distribution Calculation ......................................................................................................................................... 5-153 Defining Matching Rates for a Standard Contribution Calculation................................. 5-154 Associating a Period-to-Date Limit with a Standard Contribution/Distribution Calculation ......................................................................................................................................... 5-155 Defining General Information for a Variable Rate Profile................................................5-155 Defining a Calculation Method for a Variable Rate Profile.............................................. 5-157 Defining the Criteria in a Variable Rate Profile................................................................5-157

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Defining Matching Rates for a Variable Rate Calculation................................................ 5-159 Defining a Coverage Calculation..................................................................................... 5-160 Defining a Coverage Calculation Method........................................................................ 5-161 Associating a Variable Rate Profile with a Coverage Calculation Method...................... 5-161 Defining a Coverage Limit Across Plan Types.................................................................5-162 Defining an Imputed Income Calculation........................................................................ 5-163 Defining an Actual Premium........................................................................................... 5-165 Defining Period-to-Date Limits........................................................................................ 5-166 Defining a Benefit Balance............................................................................................... 5-167 Flex Credits and Benefit Pools (Advanced Benefits)............................................................ 5-168 Flex Credit Calculations (Advanced Benefits)................................................................. 5-168 Defining Flex Credits (Advanced Benefits)...................................................................... 5-169 Defining Regular Processing for a Flex Credit Activity Rate (Advanced Benefits).......... 5-170 Defining Partial Month Processing for a Flex Credit Activity Rate (Advanced Benefits) ......................................................................................................................................... 5-172 Defining the General Characteristics of a Benefits Pool (Advanced Benefits)..................5-173 Applying a Benefit Pool to a Plan and Option (Advanced Benefits)................................ 5-174 Defining Rollover Rules for a Benefit Pool (Advanced Benefits)..................................... 5-175 Communications................................................................................................................... 5-177 Communications.............................................................................................................. 5-177 Defining Communication Types...................................................................................... 5-179 Defining When to Use a Benefits Communication........................................................... 5-180 Defining a Communication Trigger................................................................................. 5-181 Defining a Communication Delivery Method..................................................................5-182 Online Benefit Services (Advanced Benefits)...................................................................... 5-183 Online Benefits Administration (Advanced Benefits)...................................................... 5-183 Maintaining Online Activities (Advanced Benefits)........................................................ 5-184 Maintaining Pop Up Messages (Advanced Benefits)....................................................... 5-185

6

Administration for Health and Welfare ManagementAdministration for Health and Welfare Management Overview............................................ 6-1 Advanced Benefits Administration: Overview.................................................................. 6-3 Standard and Advanced Benefits Administration................................................................... 6-4 Participant Eligibility Management (Standard Benefits)......................................................... 6-7 Maintain Participant Eligibility (Standard Benefits)............................................................ 6-7 Running the Maintain Participant Eligibility Process (Standard Benefits)...........................6-7 Running the Eligibility and Enrollment List Report............................................................ 6-8 Participation Management (Advanced Benefits)....................................................................6-11 Participation Batch Processes (Advanced Benefits)........................................................... 6-11 Benefits Batch Processes (Advanced Benefits)................................................................... 6-15 Participation Management (Advanced Benefits)............................................................... 6-19

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Participation Information (Advanced Benefits)........................................................... 6-19 Life Events and Electable Choices (Advanced Benefits).............................................. 6-20 Manually Created Life Events and Voided Life Events (Advanced Benefits)............. 6-21 What-if Eligibility (Advanced Benefits)....................................................................... 6-21 Runtime Parameters for the Participation Batch Process (Advanced Benefits)..................6-21 Defining Batch Process Parameters (Advanced Benefits).................................................. 6-24 Running the Participation Batch Process (Advanced Benefits).......................................... 6-24 Monitoring Batch Processes (Advanced Benefits).............................................................. 6-25 Setting Up a Role Based on a Life Event Type................................................................... 6-25 Running the Life Events Summary Report........................................................................ 6-26 Running the Participation Audit Activity Purge Process (Advanced Benefits)................. 6-28 Purging Person Data for Backed-Out and Voided Life Events.......................................... 6-29 Viewing a Person's Participation Information (Advanced Benefits).................................. 6-31 Viewing a Person's Life Event Information........................................................................6-31 Viewing Electable Choices for a Person Based on a Life Event (Advanced Benefits).........6-33 Manually Creating a Potential Life Event for a Person (Advanced Benefits).....................6-34 Manually Voiding a Potential Life Event for a Person (Advanced Benefits)......................6-34 Re-opening a Processed Life Event for a Person (Advanced Benefits)...............................6-35 Setting Up What-if Modeling............................................................................................. 6-35 Modeling a Person's Benefits Eligibility (Advanced Benefits)........................................... 6-36 Online Benefits Services (Advanced Benefits)....................................................................... 6-38 Online Benefits Administration (Advanced Benefits)........................................................ 6-38 Processing a Request Using the Benefits Service Center (Advanced Benefits)...................6-39 Enrollment Management......................................................................................................... 6-41 Enrollment Management................................................................................................... 6-41 Enrolling a Person in a Flex Program (Advanced Benefits)............................................... 6-48 Manually Deleting an Enrollment...................................................................................... 6-52 Viewing a Person's Flex Credits (Advanced Benefits)....................................................... 6-53 Allocating Excess Credits for a Person Enrolling in a Flex Program (Advanced Benefits) ........................................................................................................................................... 6-53 Enrolling a Person in a Non-Flex Program........................................................................ 6-54 Enrolling a Person in a Savings Plan.................................................................................. 6-57 Enrolling a Person in a Miscellaneous Plan....................................................................... 6-62 Viewing Special Rates for a Plan or Option....................................................................... 6-65 Maintaining a Participant's Primary Care Provider........................................................... 6-65 Displaying Enrollment Results.......................................................................................... 6-66 Running the Benefits Enrollment and Confirmation Reports............................................ 6-67 Viewing Dependent Information....................................................................................... 6-68 Maintaining Dependent Designations............................................................................... 6-68 Maintaining Beneficiary Designation Information for a Participant.................................. 6-70 Recording Enrollment Actions Items for a Person (Advanced Benefits)............................6-71

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Recording Receipt of Enrollment Certifications (Advanced Benefits)............................... 6-73 Overriding Enrollment Results for a Plan (Advanced Benefits)........................................ 6-75 Overriding Participation Information for a Person............................................................ 6-77 Overriding Eligibility Participation Information for a Person........................................... 6-78 Overriding Waive Participation Information for a Person (Advanced Benefits)............... 6-79 Overriding Participation Information for a Person for an Option in a Plan (Advanced Benefits)............................................................................................................................. 6-80 Managing Eligible Person Waivers (Advanced Benefits)................................................... 6-81 Maintaining Court Orders for a Participant....................................................................... 6-82 Recording a Continuing Benefits Payment........................................................................ 6-83 Recording a Contribution or Distribution.......................................................................... 6-83 Continuing Benefits Eligibility...............................................................................................6-85 Continuing Benefits Eligibility........................................................................................... 6-85 Maintaining a Benefits Assignment................................................................................... 6-85 Rates, Premiums, Balances, and Reimbursements................................................................. 6-87 Recalculate Participant Values Overview (Standard Benefits)...........................................6-87 Updating Activity Rates from Year-to-Year....................................................................... 6-87 Running the Recalculate Participant Values Process (Standard Benefits).......................... 6-88 Running the Premium Reconciliation Report.................................................................... 6-89 Viewing and Adjusting Monthly Premiums for a Plan or Option in Plan......................... 6-91 Viewing and Adjusting Monthly Premiums for a Participant........................................... 6-92 Defining Person Benefit Balances....................................................................................... 6-94 Recording a Reimbursement Request (Advanced Benefits)............................................... 6-94 Running the Process Forfeitures Concurrent Request (Advanced Benefits)...................... 6-97 Communications..................................................................................................................... 6-99 Determine Communications Batch Process....................................................................... 6-99 Maintaining Person Communications............................................................................. 6-102 Running the Determine Communications Batch Process.................................................6-103 Workforce Intelligence for Health and Welfare Administration.........................................6-105 Action Items and Certifications Workbook...................................................................... 6-105 Dependents and Beneficiaries Workbook........................................................................ 6-106 Enrollment Rates and Premiums Workbook....................................................................6-108 Health Cost Report Workbook......................................................................................... 6-109 Life Event Summary Workbook.......................................................................................6-110 Person Life Event Details Workbook............................................................................... 6-111

7

Payroll Earnings and DeductionsPayroll Earnings and Deductions Overview............................................................................ 7-1 Payroll Earnings and Deductions............................................................................................. 7-2 Additional Element Setup for Payroll...................................................................................... 7-6

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Formulas and Payroll Run Results ...................................................................................... 7-6 Pay Values........................................................................................................................... 7-7 Proration.............................................................................................................................. 7-8 Net-to-Gross Processing of Earnings................................................................................... 7-9 Setting Up Total Compensation Elements for Payroll........................................................7-10 Defining Frequency Rules.................................................................................................. 7-14 Defining Formula Processing and Result Rules................................................................. 7-15 Setting Up Elements for Net-to-Gross Processing..............................................................7-17 Setting Up Proration or Retro-Notification........................................................................ 7-21 Defining Event Groups...................................................................................................... 7-23 Balances................................................................................................................................... 7-25 Payroll Balances................................................................................................................. 7-25 Defining Secondary Element Classifications ..................................................................... 7-26 Creating Balance Feeds for Individual Elements............................................................... 7-27 Creating Classes of Balance Feeds..................................................................................... 7-28 Defining User Balances...................................................................................................... 7-28 Uploading Initial Balances................................................................................................. 7-31 Third Party Payments.............................................................................................................. 7-33 Third Party Payments........................................................................................................ 7-33 Third Party Payments Overview....................................................................................... 7-33 Third Party Payment Deductions ......................................................................................7-37 Making Third Party Payments........................................................................................... 7-38 Entering Third Party Payment Information....................................................................... 7-39 Historic Rates........................................................................................................................... 7-42 Historic Rates..................................................................................................................... 7-42 Historic Rates Extra Information Types............................................................................. 7-48 Setting Up Historic Rates................................................................................................... 7-52

HRMS Glossary Index

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Send Us Your CommentsOracle Human Resources Management Systems Compensation and Benefits Management Guide, Release 12Part No. B31613-02

Oracle welcomes customers' comments and suggestions on the quality and usefulness of this document. Your feedback is important, and helps us to best meet your needs as a user of our products. For example: Are the implementation steps correct and complete? Did you understand the context of the procedures? Did you find any errors in the information? Does the structure of the information help you with your tasks? Do you need different information or graphics? If so, where, and in what format? Are the examples correct? Do you need more examples?

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Preface

Intended AudienceWelcome to Release 12 of the Oracle Human Resources Management Systems Compensation and Benefits Management Guide. This guide assumes you have a working knowledge of the following: The principles and customary practices of your business area. Oracle HRMS. If you have never used Oracle HRMS, Oracle suggests you attend one or more of the Oracle HRMS training classes available through Oracle University Oracle Self-Service Web Applications. The Oracle Applications graphical user interface. To learn more about the Oracle Applications graphical user interface, read the Oracle Applications User's Guide. See Related Information Sources on page xx for more Oracle Applications product information.

TTY Access to Oracle Support ServicesOracle provides dedicated Text Telephone (TTY) access to Oracle Support Services within the United States of America 24 hours a day, seven days a week. For TTY support, call 800.446.2398.

Documentation AccessibilityOur goal is to make Oracle products, services, and supporting documentation

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accessible, with good usability, to the disabled community. To that end, our documentation includes features that make information available to users of assistive technology. This documentation is available in HTML format, and contains markup to facilitate access by the disabled community. Accessibility standards will continue to evolve over time, and Oracle is actively engaged with other market-leading technology vendors to address technical obstacles so that our documentation can be accessible to all of our customers. For more information, visit the Oracle Accessibility Program Web site at http://www.oracle.com/accessibility/ .

Accessibility of Code Examples in DocumentationScreen readers may not always correctly read the code examples in this document. The conventions for writing code require that closing braces should appear on an otherwise empty line; however, some screen readers may not always read a line of text that consists solely of a bracket or brace.

Accessibility of Links to External Web Sites in DocumentationThis documentation may contain links to Web sites of other companies or organizations that Oracle does not own or control. Oracle neither evaluates nor makes any representations regarding the accessibility of these Web sites.

Structure1 General Compensation Structures 2 Salary, Grades, and Pay Administration 3 Compensation and Awards Management 4 Leave and Absence Management 5 Setup for Health and Welfare Management 6 Administration for Health and Welfare Management 7 Payroll Earnings and Deductions HRMS Glossary

Related Information SourcesOracle HRMS shares business and setup information with other Oracle Applications products. Therefore, you may want to refer to other user guides when you set up and use Oracle HRMS. You can read the guides online by choosing Library from the expandable menu on your HTML help window, by reading from the Oracle Applications Document Library CD included in your media pack, or by using a Web browser with a URL that your system administrator provides. If you require printed guides, you can purchase them from the Oracle store at http://oraclestore.oracle.com. Guides Related to All Products

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Oracle Applications User's Guide This guide explains how to enter data, query data, run reports, and navigate using the graphical user interface (GUI). This guide also includes information on setting user profiles, as well as running and reviewing reports and concurrent processes. You can access this user's guide online by choosing "Getting started with Oracle Applications" from any Oracle Applications help file. Guides Related to This Product Oracle Daily Business Intelligence for HRMS User Guide This guide describes the dashboards and reports available for HR Line Managers, Chief HR Officer, Budget Managers, and Benefits Managers using Daily Business Intelligence for HRMS. It includes information on using parameters, how DBI for HRMS derives values, and how to troubleshoot dashboards and reports. Oracle Daily Business Intelligence for HRMS Implementation Guide This guide provides basic setup procedures for implementing and maintaining HRMS-related dashboards. Oracle Daily Business Intelligence Implementation Guide This guide describes the common concepts for Daily Business Intelligence. It describes the product architecture and provides information on the common dimensions, security considerations, and data summarization flow. It includes a consolidated setup checklist by page and provides detailed information on how to set up, maintain, and troubleshoot Daily Business Intelligence pages and reports for the following functional areas: Financials, Interaction Center, iStore, Marketing, Product Lifecycle Management, Projects, Procurement, Sales, Service, Service Contracts, and Supply Chain. Oracle Daily Business Intelligence User Guide This guide describes the common concepts for Daily Business Intelligence. It describes the product architecture and provides information on the common dimensions, security considerations, and data summarization flow. It includes a consolidated setup checklist by page and provides detailed information on how to set up, maintain, and troubleshoot Daily Business Intelligence pages and reports for the following functional areas: Financials, Interaction Center, iStore, Marketing, Product Lifecycle Management, Projects, Procurement, Sales, Service, Service Contracts, and Supply Chain. Oracle Application Framework Personalization Guide Learn about the capabilities of the OA Framework technologies. Oracle Human Resources Management Systems Enterprise and Workforce Management Guide Learn how to use Oracle HRMS to represent your enterprise. This includes setting up your organization hierarchy, recording details about jobs and positions within your enterprise, defining person types to represent your workforce, and also how to manage your budgets and costs.

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Oracle Human Resources Management Systems Workforce Sourcing, Deployment, and Talent Management Guide Learn how to use Oracle HRMS to represent your workforce. This includes recruiting new workers, developing their careers, managing contingent workers, and reporting on your workforce. Oracle Human Resources Management Systems Payroll Processing Management Guide Learn about wage attachments, taxes and social insurance, the payroll run, and other processes. Oracle Human Resources Management Systems Compensation and Benefits Management Guide Learn how to use Oracle HRMS to manage your total compensation package. For example, read how to administer salaries and benefits, set up automated grade/step progression, and allocate salary budgets. You can also learn about setting up earnings and deductions for payroll processing, managing leave and absences, and reporting on compensation across your enterprise. Oracle Human Resources Management Systems Configuring, Reporting, and System Administration Guide Learn about extending and configuring Oracle HRMS, managing security, auditing, information access, and letter generation. Oracle Human Resources Management Systems Implementation Guide Learn about the setup procedures you need to carry out in order to implement Oracle HRMS successfully in your enterprise. Oracle Human Resources Management Systems FastFormula User Guide Learn about the different uses of Oracle FastFormula, and understand the rules and techniques you should employ when defining and amending formulas for use with Oracle applications. Oracle Self-Service Human Resources Deploy Self-Service Capability Guide Set up and use self-service human resources (SSHR) functions for managers, HR Professionals, and employees. Oracle Human Resources Management Systems Deploy Strategic Reporting (HRMSi) Implement and administer Oracle Human Resources Management Systems Intelligence (HRMSi) in your environment. Oracle Human Resources Management Systems Strategic Reporting (HRMSi) User Guide Learn about the workforce intelligence reports included in the HRMSi product, including Daily Business Intelligence reports, Discoverer workbooks, and Performance Management Framework reports. Oracle Human Resources Management Systems Approvals Management

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Implementation Guide Use Oracle Approvals Management (AME) to define the approval rules that determine the approval processes for Oracle applications. Oracle Human Resources Management Systems Window Navigation and Reports Guide This guide lists the default navigation paths for all windows and the default reports and processes as they are supplied in Oracle HRMS. Oracle iRecruitment Implementation and User Guide Set up and use Oracle iRecruitment to manage all of your enterprise's recruitment needs. Oracle Learning Management User Guide Use Oracle Learning Management to accomplish your online and offline learning goals. Oracle Learning Management Implementation Guide Implement Oracle Learning Management to accommodate your specific business practices. Oracle Time and Labor Implementation and User Guide Learn how to capture work patterns, such as shift hours, so that this information can be used by other applications, such as General Ledger. Installation and System Administration Oracle Applications Concepts This guide provides an introduction to the concepts, features, technology stack, architecture, and terminology for Oracle Applications Release 12. It provides a useful first book to read before an installation of Oracle Applications. This guide also introduces the concepts behind Applications-wide features such as Business Intelligence (BIS), languages and character sets, and Self-Service Web Applications. Oracle Applications Installation Guide: Using Rapid Install This guide provides instructions for managing the installation of Oracle Applications products. Oracle Rapid Install minimizes the time to install Oracle Applications and the Oracle technology stack by automating many of the required steps. This guide contains instructions for using Oracle Rapid Install and lists the tasks you need to perform to finish your installation. You should use this guide in conjunction with individual product user guides and implementation guides. Oracle Applications Upgrade Guide: Release 11i to Release 12 Refer to this guide if you are upgrading your Oracle Applications Release 11i products to Release 12. This guide describes the upgrade process and lists database and product-specific upgrade tasks. Oracle Applications Maintenance Procedures and Oracle Applications Maintenance Utilities

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Use these guides to help you run the various AD utilities (such as AutoUpgrade, AutoPatch, AD Administration, AD Controller, AD Relink, and License Manager) and maintain the Oracle applications file system and database. Oracle Applications System Administrator's Guides These guides (Configuration, Maintenance, and Security) provide planning and reference information for the Oracle Applications System Administrator. They describe how to define security, customize menus and online help, and manage concurrent processing. Oracle Alert User's Guide This guide explains how to define periodic and event alerts to monitor the status of your Oracle Applications data. Oracle Applications Developer's Guide This guide contains the coding standards followed by the Oracle Applications development staff and describes the Oracle Application Object Library components that are needed to implement the Oracle Applications user interface described in the Oracle Applications User Interface Standards for Forms-Based Products. This manual also provides information to help you build your custom Oracle Forms Developer forms so that the forms integrate with Oracle Applications. Oracle Applications User Interface Standards for Forms-Based Products This guide contains the user interface (UI) standards followed by the Oracle Applications development staff. It describes the UI for the Oracle Applications products and how to apply this UI to the design of an application built by using Oracle Forms. Other Implementation Documentation Oracle Workflow Administrator's Guide This guide explains how to complete the setup steps necessary for any Oracle Applications product that includes workflow-enabled processes, as well as how to monitor the progress of runtime workflow processes. Oracle Workflow Developer's Guide This guide explains how to define new workflow business processes and customize existing Oracle Applications-embedded workflow processes. It also describes how to define and customize business events and event subscriptions. Oracle Workflow User's Guide This guide describes how Oracle Applications users can view and respond to workflow notifications and monitor the progress of their workflow processes. Oracle Workflow API Reference This guide describes the APIs provided for developers and administrators to access Oracle Workflow. Oracle Applications Flexfields Guide

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This guide provides flexfields planning, setup, and reference information for the Oracle HRMS implementation team, as well as for users responsible for the ongoing maintenance of Oracle Applications product data. This guide also provides information on creating custom reports on flexfields data. Oracle eTechnical Reference Manuals Each eTechnical Reference Manual (eTRM) contains database diagrams and a detailed description of database tables, forms, reports, and programs for a specific Oracle Applications product. This information helps you convert data from your existing applications, integrate Oracle Applications data with non-Oracle applications, and write custom reports for Oracle Applications products. Oracle eTRM is available on Oracle MetaLink.

Integration RepositoryThe Oracle Integration Repository is a compilation of information about the service endpoints exposed by the Oracle E-Business Suite of applications. It provides a complete catalog of Oracle E-Business Suite's business service interfaces. The tool lets users easily discover and deploy the appropriate business service interface for integration with any system, application, or business partner. The Oracle Integration Repository is shipped as part of the E-Business Suite. As your instance is patched, the repository is automatically updated with content appropriate for the precise revisions of interfaces in your environment.

Do Not Use Database Tools to Modify Oracle Applications DataOracle STRONGLY RECOMMENDS that you never use SQL*Plus, Oracle Data Browser, database triggers, or any other tool to modify Oracle Applications data unless otherwise instructed. Oracle provides powerful tools you can use to create, store, change, retrieve, and maintain information in an Oracle database. But if you use Oracle tools such as SQL*Plus to modify Oracle Applications data, you risk destroying the integrity of your data and you lose the ability to audit changes to your data. Because Oracle Applications tables are interrelated, any change you make using an Oracle Applications form can update many tables at once. But when you modify Oracle Applications data using anything other than Oracle Applications, you may change a row in one table without making corresponding changes in related tables. If your tables get out of synchronization with each other, you risk retrieving erroneous information and you risk unpredictable results throughout Oracle Applications. When you use Oracle Applications to modify your data, Oracle Applications automatically checks that your changes are valid. Oracle Applications also keeps track of who changes information. If you enter information into database tables using database tools, you may store invalid information. You also lose the ability to track who has changed your information because SQL*Plus and other database tools do not keep a

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record of changes.

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1General Compensation Structures

General Compensation Structures OverviewUsing Oracle HRMS, you have all the flexibility you need to model your compensation and benefit packages. You decide exactly what information you want to hold for compensation management and, if you require it, for payroll processing. This overview outlines the generic concepts and procedures for setting up compensation. However, there are additional considerations for salaries, absences and PTO accruals, benefit plans, collective agreements, and setting up earnings and deductions for payroll processing. These are covered in other areas.

Elements: Define - Administer - ProcessElement is an Oracle HRMS term for the components of a compensation and benefits package, such as salary, PTO accrual plan, and health plan. By defining elements, you can structure information relating to employees' compensation and benefits in a highly flexible way. First, you define elements, then you administer and process them.

DefineDefinition includes rules about valid compensation values, who can receive the elements, and how they are processed. You define elements, and associated rules and formulas, as part of your Oracle HRMS implementation. You can define new elements and make certain changes to existing definitions at any time.

AdministerWhen definition is complete, you administer compensation and benefits by making element entries for your employees. You can quickly record earnings, deductions, time worked and other information by entering elements in batches.

General Compensation Structures 1-1

ProcessYou process earnings and deductions by running payrolls. The payroll run automatically uses the calculations you have written as formulas, and uses other rules (such as processing frequency) that you have defined.

Compensation ObjectsFor most benefits and some types of compensation, you define compensation objects as well as elements. You can define a hierarchy of compensation objects, optionally starting with programs at the highest level, to represent a package of benefits you offer, followed by plan types, plans, and options. A plan type is a category of plans, such as a medical plan type. A plan is a specific offering, such as a bonus or a dental plan, and an option is an electable choice within a plan, such as 1 x Salary. If you use SSHR, defining compensation objects enables you to delegate tasks such as the allocation of salary increases or bonuses to line managers, by issuing budgets. Employees can use self-service to enter voluntary contributions, such as savings plans, or charitable donations. They can also manage their own enrollments in benefit plans, while the back-office maintains control of the plan's administration. If you use iRecruitment, defining compensation objects enables your hiring or line managers to assign benefits components to eligible applicants when they create or update offers. For example, you can set up plans such as car and relocation. To speed up implementation, you can use Plan Design Copy to copy a plan or program and all its associated definitions, then you can configure these to create a new plan or program.

Eligibility ProfilesIf you have defined compensation objects, you manage participation by defining eligibility profiles and attaching them to the appropriate level of the hierarchy. You can define several profiles for each object, and each profile can contain both required and optional criteria. For example, the profile could specify that eligible employees must work full time, and either have been employed for at least two years, or be assigned to a manager grade.

Activity RatesYou can attach any number of activity rates to a plan or option to specify the contributions made by employee and employer, or the distributions, such as compensation awards. When you define an activity rate, you can associate it with an element. Activity rates support a variety of calculation methods to determine how much a person pays or receives: flat amount, multiple of premium, multiple of elected coverage, and so on. When a participant enrolls in a plan, the enrollment process runs the calculation and enters the result on an element entry for the employee.

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General Compensation Structures

Reporting On Compensation DataOracle HRMS includes a number of windows and reports for compensation data, such as the Salary Review Report, and the List Employees by Element window. In SSHR, you can use the Compensation History page to view employee information such as salary changes, bonuses, stock options, monetary compensation grouped by year, ranking, jobs, and non-monetary compensation. If you use Compensation Workbench, this feature supplies several reports for salary changes, bonuses, and stock options. Oracle HRMS also includes some Discoverer Workbooks to enable you to analyze salary information by organization, supervisor, and job, comparing with grade rate values where appropriate. See: General Compensation Structures -- Reports, Oracle HRMS Configuring, Reporting, and System Administration Guide

General Compensation Structures 1-3

Using System Extract, you can define interfaces to extract compensation data for reporting or transfer to third parties. Oracle HRMS supplies predefined extracts that you can use or configure. See: HR/Payroll Extracts, page 1-42.

Key ConceptsTo get the most out of the compensation and benefits functionality of Oracle HRMS, you need to understand the following key concepts: Elements Input values Element links Element classifications Element entries Plan design Eligibility profiles Activity rates

General Compensation StructuresWhat kinds of compensation information can you record?All kinds, depending on how much information you require. You decid