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Oracle Fusion Individual Compensation Plan Explained With Examples

⚡ Must Read Fusion Article : Document of Record or Document Types in Fusion HCM

Oracle Fusion Compensation

Fusion CompensationOracle fusion compensation is currently one of the highly demanded module in the market, specially in the US. So I thought to write couple of articles on this subject. Oracle fusion is conceptually divided in two parts one is called Individual compensation plan and other is Workforce compensation plan.

If you are coming from Ebiz background, you will agree that Fusion Individual Compensation plan is exactly same as Individual Compensation Distribution (ICD) in Ebiz, where you reward individual employees outside of their regular compensation cycle, such as a spot bonus, education reimbursement, or car allowance. On the other hand Workforce compensation plan is for larger group of employees, mostly our annual salary revision is part of workforce compensation.

In this article we will concentrate on Individual compensation plan and will try to understand this with few examples. If you are looking for Fusion Workforce Compensation, please read » Learn Fusion Workforce Compensation Step By Step – Part1

Note : If you are looking for training on fusion compensation or any other modules of Fusion HCM, please contact us today. We are offering online training and also offline training in Hyderabad for discounted price.

Learn Oracle Fusion Individual compensation with examples

To understand the concept in a better way lets have following two hypothetical requirements

Learn Fusion CompensationRequirement 1 : Your organization wants to reward employees who conduct internal training as a faculty and talk about new technologies. When a manager identifies such employee from his team he can reward maximum of $200 for each training.

Requirement 2 : Your organization also allows employees to voluntary contribute amount from their regular monthly salary for any social causes or make contribution for martyred soldiers families through BharatKeVeer.

Now since you have got the requirements it would be easier for you to understand the setup steps we will go through now.

Create payroll elements for the compensation plans

The very first step would be to create payroll elements for these compensation plans to work.  Fusion compensation plan will only help employees to enroll for the plan (voluntary deduction) or managers to enroll/reward employees (Bonus etc.) but the payment will only happen through payroll so the payroll element is the linkage between compensation plan and actual payment (Payroll)

Navigation : Compensation » Task Panel » Common Configuration » Manage Elements Task Panel » Manage Payroll Process Configuration » Manage Elements

For this requirement we will be creating following two elements

  1. Training Reward – For the first requirement
  2. Bharat Ke Veer Deduction – For the second requirement

To create these elements login to application and click on Compensation to open the Compensation work area. You will see task panel right hand side, click on that tab. Now you click on “Manage Elements” available under Common Configuration. This will open Payroll Administration work area in a separate browser. Again In the Tasks panel tab under Manage Payroll Process Configuration, click Manage Elements to open the Manage Elements page.

Fusion Compensation plan

Create Training Reward – For the first requirement

You are now on Manage Elements window to create a new element, please follow below steps

1. On the Search Results section toolbar, click the Create button to open the Create Element dialog box.
2. In the Legislative Data Group field, select your Legislative Data Group
3. In the Primary Classification field, select Supplemental Earnings.
4. In the Secondary Classification field, select Award and Prizes.
5. Click Continue to open the Create Element: Basic Information page.

Oracle Fusion element for compensation

Enter Basic Information and Review Selections for element Training Reward

You are on Create Element : Basic Information window. In this window enter details of the element as follows

1. In the Name field, enter AVI Training Reward
2. In the Reporting Name field, enter Avi Training Reward
3. In the Effective Date field, enter 1/1/1951
4. For the question What is the earliest entry date for this element?, select First Standard Earning Date.
5. For the question What is the latest entry date for this element?, select Last Standard Process Date.
6. For the question Does this element recur each payroll period, or does it require explicit entry?, select Nonrecurring.
7. To accept the remaining default values, click Next, which also opens the Create Element: Additional Details page.
8. To accept the default values, click Next, which also opens the Create Element: Review page.
Review your selected options against the rule and default options to ensure everything is as you require.
9. Click Submit to open the Element Summary: AVI Training Reward page.

Manage Input Values and Allow User Entry

Currently we are on Element Summary: AVI Training Reward page. system has create element with default input values, which we need to manage to suit our requirement and also as per the requirement we need to restrict the maximum allowed value to $200. If manager tries to give more than &200 to employee, it should throw an error.

1. In the Element Overview section, select Amount.
2. On the Input Values: Amount section Edit menu, select Correct.
3. In the Default Entry Values and Validation section Maximum field, enter 10,000.
4. In the Warning or Error field, select Error.
5. Click Submit.

Define Element Eligibility for Training Reward

Using the element eligibility you can restrict who all will be eligible for this element it is same as element link in Ebiz. As we do not have specific requirement to restrict this element for a specific set of element, we will keep it open for all. To do this, please follow below steps.

1. On the toolbar Actions menu, select Create Element Eligibility.
2. In the Element Eligibility section General Information subsection Element Eligibility Name field, enter Avi Training Reward Open.
9. Click Submit.
10. Click Done to return to the Manage Elements page.

Fusion Compensation

At this point of time you can create an element Training Reward for the first requirement now we also need to create one deduction element Bharat Ke Veer Deduction for the second requirement. For the same, please follow below steps

Create Bharat Ke Veer Deduction element for second requirement

Navigation : Compensation » Task Panel » Common Configuration » Manage Elements Task Panel » Manage Payroll Process Configuration » Manage Elements

1. On the Search Results section toolbar, click the Create button to open the Create Element dialog box.
2. In the Legislative Data Group field, select your Legislative Data Group.
3. In the Primary Classification field, select Voluntary Deductions.
4. Click Continue to open the Create Element: Basic Information page.

Enter Basic Information and Review

1. In the Name field, enter AVI Bharat Ke Veer Deduction
2. In the Reporting Name field, enter XX International Red Cross.
3. In the Effective Date field, enter 1/1/1951
4. For the question What is the earliest entry date for this element?, select First Standard Earning Date.
5. For the question What is the latest entry date for this element?, select Last Standard Process Date.
6. For the question Does this element recur each payroll period, or does it require explicit entry?, select non-recurring
7. To accept the remaining default values, click Next, which also opens the Create Element: Additional Details page.
8. To accept the default values, click Next, which also opens the Create Element: Review page.
Review your selected options against the rule and default options to ensure everything is as you require.
9. Click Submit to open the Element Summary: AVI Bharat Ke Veer Deduction.

Open Element Eligibility

1. To set up this element for eligibility without any criteria, in the Element Overview section, select Element Eligibility.
2. On the toolbar Actions menu, select Create Element Eligibility.
3. In the Element Eligibility section General Information subsection, Element Eligibility Name field, enter AVI Bharat Ke Veer Deduction Open.
4. Click Submit.
5. Click Done to return to the Manage Elements page.

At this point, you have created and saved the AVI Bharat Ke Veer Deduction.

Create Compensation plan for Training Reward

Navigation : Compensation » Task Panel » Individual Compensation » Manage Plan » Create

Now using the element “Avi Training Reward” we will configure a plan so manager can use this plan to reward employees.  To create the plan login to instance and click on Compensation after than from the task panel click on “Manage Plan”, which is available under Individual compensation. Now you are on Create Individual Compensation Plan. Follow the below steps

1. On the Search Results section toolbar, click Create to open the Create Individual Compensation Plan page.
2. In the Plan field, enter Avi Training Reward.
3. On the Options section toolbar, click Create to open the Create Option dialog box.
4. In the Option field, enter Avi Training Reward.
5. In the Payroll Element field, search for and select Avi Training Reward.
6. Click Save and Close to return to the Create Individual Compensation Plan: Avi Training Reward page.

Fusion individual Compensation plan

Remember that each plan will have at least one option.

Configure Dates
1. Select the Dates tab.
2. In the Payment Start Date field, select Approval Date.

Configure Eligibility

Configure eligibility section helps to restrict the plan to certain employee groups. For example if the requirement is to award Training Reward only to those employees who have completed 5 years in the organization or reward only full time employees. In such scenario you will first create the eligibility profile and then add that over here. Since we do not have any such requirement we do not need to do to anything here.

Configure Plan Access

1. Select the Plan Access tab.
2. In the Restrict Plan Access field, select Yes.
Add these actions:
– Add Employee Work Relationship
– Manage Individual Compensation

Configure Instruction Text

1. Select the Instruction Text tab.
2. Enter the following instruction:
Enter an amount no greater than $200.
3. Click Save and Close to return to the Manage Individual Compensation Plans page.

At this point, you should have created and saved the Avi Training Reward individual compensation plan.

Fusion individual Compensation plan

Create Compensation plan Bharat Ke Veer Deduction

Navigation : Compensation » Task Panel » Individual Compensation » Manage Plan » Create

Please follow the below similar steps to create this plan.

1. On the Search Results section toolbar, click Create to open the Create Individual Compensation Plan page.
2. In the Plan field, enter Avi Bharat Ke Veer Deduction
3. On the Options section toolbar, click Create to open the Create Option dialog box.
4. In the Option field, enter Avi Bharat Ke Veer Deduction.
5. In the Payroll Element field, search for and select Avi Bharat Ke Veer Deduction.
6. Click Save and Close to return to the Create Individual Compensation Plan page.

Configure Dates
1. Select the Dates tab.
2. In the Payment Start Date field, select First of next month.

Configure Plan Access
1. Select the Plan Access tab.
2. In the Restrict Plan Access field, select Yes.
Add the actions: Manage Contributions action.

Configure Instruction Text
1. Select the Instruction Text tab.
2. Enter the following instruction:
Please enter the amount you would to contribute for Bharat Ke Veer. Your deduction will happen in next month.
3. Click Save and Close to return to the Manage Individual Compensation Plans page.

Fusion individual Compensation plan

At this point, you should have created and saved the Avi Bharat Ke Veer Deduction individual compensation plan.

Manager to award Training Reward to employee

Navigation : Login As manager » Compensation » Tasks panel » Manage Compensation » Search employee to reward

Now all our required configurations are done and its time for the manager to reward Training Award to one employee. We will see how this is done. To complete this exercise you must have employee manager hierarchy ready so that manager can select employee from his team and reward.

Login as a manager and click on Compensation icon from there click on the task panel and you will see “Manager Compensation” under individual compensation. Click on that to open Manage Compensation Page.

Now search the employee you want to reward and from the open his/her record.

Award the Training Reward to employee

1. On the Other Compensation section toolbar, click Award Compensation to open the Award Compensation dialog box.
2. In the Plan and Option section Plan field, select Avi Training Reward.
3. In the Option field, select Avi Training Reward.
4. In the Start Date field, select today’s date.
5. In the Details section Amount field, enter 500 to over award and test whether the error message appears..
6. Click OK.
An Error dialog box appears with the error message that you chose to display if an amount exceeds the maximum.
7. Click OK to return to the Award Compensation dialog box.
8. Award an acceptable amount of 200.
9. Click OK to return to the Manage Compensation: <Employee Name>.

Submit the Awards

1. Click Continue to open the Review Compensation.
2. Click Submit, which causes the Warning dialog box to open.
3. Click Yes, which causes the Confirmation dialog box to open.
4. Click OK to return to the Person Management work area.

Approving the awarded Training Reward

In this example we have not setup any approval so the reward will be auto approved and the element associated with the compensation plan will be attached to employee for payroll processing. But if you want to configure any approval you can also do that. You can read article onfigure and Customize Approval Rules in Oracle Fusion for more information.

Employee to select Bharat Ke Veer Deduction

Navigation : Login as employee » About Me » Performance » Click on More Details icon to the left of the worker’s name » Compensation » Manage Personal Contributions

In this previous example we saw that manager rewarded Training Reward to employee but in this example we will see how employee can enroll himself for any compensation plan. Later we will also verify that all the required elements are attached to employee so it would be better if you log out and log in as the same employee who was awarded Training Reward.

Fusion individual Compensation plan

Login as an employee and click on About me them Performance. You are on My evaluations page. Beside your name you will see “More” option, click on that and you will see an image shown above. Now click on compensation and then “Manage Personal Contribution”.

Now you are on Manage Compensation : <Employee Name> page, this page is same what manager saw. Follow the below steps to enroll for Bharat Ke Veer

1. On the My Contributions toolbar, click Manage Contributions to open the Award Compensation dialog box.
2. In the Plan field, select Avi Bharat Ke Veer Deduction.
3. In the Option field, select Avi Bharat Ke Veer Deduction.
4. In the Amount field, enter 100.
5. Click OK to open the Manage Personal Contributions: <Employee Name>.
6. Click Continue, to open the Review Contributions: <Employee Name>.
7. Click Submit, which causes the Warning dialog box to open.
8. Click Yes, which causes the Confirmation dialog box to open.
9. Click OK to return to the My Portrait page.

Validate employees are enrolled to the compensation plans

Navigation : Compensation » Task Panel » Manage Elements » Task Panel » Manage Element Entries

To check employee is enrolled correctly to plan we need to verify that elements are attached to employee. To verify the same login to instance and click on compensation. From the task panel click on “Manage Elements” available under “Common Configuration”. You are now on Payroll Administration Page. Now click on the Task Panel again and you will see “Manage Element Entries” under “Person”, click on that. Now search the employee you want to validate element entries.

Interview questions on Fusion Individual Compensation Plans

Question : Is it possible to set up the approvals based on the amount entered for the individual compensation plan?

Answer :  To set up your approval rule please use Setup and Maintenance > Manage Approval Transactions for Human Capital Management. This is the simplified approvals page for HCM. The process name to search for is “Manage Individual Compensation”. The payload attribute is called Amount. Please check the oracle note 2167934.1 for more info.

Question : You have setup Individual Compensation Plan how would you bulk enrollment large employees?

Answer : Depending on Business Requirements and number of employees, there are several ways to upload salary/compensation changes (Check note id 1993106.1)

1. Managing Salary Using the HCM Spreadsheet Loader (Doc ID 1630798.1)

2. Export/Import of Compensation plan from FSM (Doc ID 1964381.1)

3. Loading Salary and Salary Basis Using File-Based Loaders (Doc ID 1566590.1)

Question : How to add Validation for Individual Compensation, for example an employee can be granted special bonus only once in a lifetime.

Answer : There is no way to add the validation. Workaround to make the person ineligible for the reward. You could use a fast formula to see if the workers have the element (it will be limited by assignment) and if they do, they are not eligible.

Question : What is the difference between workforce compensation and Individual compensation

Answer : This answer is left for you so go and find out 🙂

Over to you

Hope you have enjoyed going through this article and gained some knowledge on Individual compensation. Please do let me know how did you find it by visiting my facebook page. And if you have any question, please visit our forum to ask any question.

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