Compensation Plan

Definition

An organization’s compensation policy is defined by a number of compensation plans. A compensation plan identifies the means of employee compensation, that is, the payment or remuneration.

Structure

A compensation plan includes the following attributes:

Attribute

Definition

Plan types

Identify the plan type to which the plan is grouped

Validity period

Determines the period for which the plan is valid

Effective date

Determines the date the plan becomes effective

Calculation data

Determines how the compensation plan amount is calculated

Guidelines

Provide guidelines on how compensation is awarded

Eligibility rules

Determine whether an employee is eligible

 

Integration

When the manager has approved the awards and released the plan, the system updates data stored and processed by the Personnel Administration component.