Individual Compensation Plan
Oracle Fusion Compensation is currently one of the highly demanded modules in the market, especially in the US. Therefore, I have decided to write a couple of articles on this subject. Conceptually, Oracle Fusion Compensation is divided into two parts: Individual Compensation Plan and Workforce Compensation Plan.
If you come from an Ebiz background, you will agree that the Fusion Individual Compensation Plan is exactly the same as the Individual Compensation Distribution (ICD) in Ebiz. It involves rewarding individual employees outside of their regular compensation cycle, such as providing spot bonuses, education reimbursement, or car allowances. On the other hand, the Workforce Compensation Plan is designed for a larger group of employees and often includes the annual salary revision as part of the workforce compensation process.
In this article, our focus will be on the Individual Compensation Plan, and we will try to understand it through a few examples. If you are interested in learning about Fusion Workforce Compensation, please refer to the article titled » Learn Fusion Workforce Compensation Step By Step – Part1
Learn Oracle Fusion Individual compensation with examples
To understand the concept in a better way lets have following two hypothetical requirements
Requirement 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 they 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.
Steps to configure Individual Compensation Plan
Now we have got the requirement in place, lets proceed step by step and see how it is configured. First step would be to create required payroll elements.
1 Create payroll elements for the compensation plans
The very first step would be to create payroll elements for these compensation plans to work. The Fusion compensation plan will only help employees enroll in the plan (voluntary deduction) or managers enroll/reward employees (Bonus, etc.), but the payment will happen through payroll only. The payroll element is the linkage between the compensation plan and actual payment (Payroll).
For this requirement we will be creating following two elements
- Training Reward – For the first requirement
- Bharat Ke Veer Deduction – For the second requirement
To create elements follow below navigation or search for the task Elements
Navigation : My Client Groups » Compensation » Common Configuration » Elements
1.1. Create Training Reward – For the first requirement
You are now on Elements window to create a new element, please follow below steps
- On the Search Results section toolbar, click the Create button to open the Create Element dialog box.
- In the Legislative Data Group field, select your Legislative Data Group, for example US Legislative Data Group
- In the Primary Classification field, select Supplemental Earnings (or any other value related to your legislations)
- In the Secondary Classification field, select Award and Prizes (You can even leave it blank)
- Category : Standard
Click Continue to open the Create Element: Basic Information page.
This will take you to Create Element: Basic Information page, Enter following information on this page for element Training Reward. Accept default values for any other fields not mentioned here.
| Name | AVI Training Reward |
| Reporting Name | AVI Training Reward |
| Effective Date | 1/1/51 |
| What is the earliest entry date for this element? | First Standard Earning Date |
| What is the latest entry date for this element? | Last Standard Process Date |
| Does this element recur each payroll period, or does it require explicit entry? | Nonrecurring |
Click on Next button, which will take you to Create Element: Additional Details page. On this page enter details as follows and click on the next button
| What is the calculation rule? | Flat Amount |
| What is the default periodicity of this element? | Calendar Month |
| Periodicity Conversion Rule | Standard Rate Annualized |
| Is this element subject to retroactive changes? | No |
| Should this element be included in the earnings calculation of the overtime base rate? | No |
| Should this element be included in the hours calculation of the overtime base rate? | No |
Once done, click Next button, which will take you to Create Element: Review page.
Review your selected options against the rule and default options to ensure everything is as you require. Click on Submit button.
As soon as you click on Submit button system will run some process to create element, do not click on OK button, let the process complete its own. Once the process is over, it will take you to 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 created element with default input values, which we need to update to cater our requirement. Our requirement says that if manager tries to give more than $200 to employee, it should throw an error. To achieve this follow below steps
1. In the Element Overview section, under Input Values select Amount.
2. On the Input Values: Amount section click on Edit menu and then select Correct option.
3. In the Default Entry Values and Validation section Maximum field, enter 200.00.
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 employees, we will keep it open for all. To do this, please follow below steps.
1. Under the Element Overview section, click on Element Eligibility link
2. Now click on the Action menu and select value Create Element Eligibility.
3. In the Element Eligibility section General Information subsection Element Eligibility Name field, enter Avi Training Reward Open.
4. Click Submit.
At this point of time, you have created 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:-
1.2. Create Bharat Ke Veer Deduction element for second requirement
Navigation : My Client Groups » Compensation » Common Configuration » Elements
On the Search Results section, click the Create button to open the Create Element dialog box. Enter details as follows
| Legislative Data Group | US Legislative Data Group |
| Primary Classification | Voluntary Deductions |
Click on Continue button. On Create Element: Basic Information page enter details as follows.
| Name | AVI Bharat Ke Veer Deduction |
| Reporting Name | AVI Bharat Ke Veer Deduction |
| Effective Date | 1/1/51 |
| What is the earliest entry date for this element? | First Standard Earning Date |
| What is the latest entry date for this element? | Last Standard Process Date |
| Does this element recur each payroll period, or does it require explicit entry? | Nonrecurring |
To accept the remaining default values, click Next, which also opens the Create Element: Additional Details page. 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. Click Submit to open the Element Summary: AVI Bharat Ke Veer Deduction.
Define Element Eligibility for Bharat Ke Veer
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.
At this point, you have created and saved the AVI Bharat Ke Veer Deduction element and its eligibility.
2. Create Compensation plan for Training Reward
Navigation : My Client Groups » Compensation » Individual Compensation » Individual Compensation Plans
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 click on Individual Compensation Plans. From Search Results section, click on Create button to open the Create Individual Compensation Plan page.
1. In the Plan field, enter Avi Training Reward.
2. On the Options section toolbar, click Create to open the Create Option dialog box.
3. In the Option field, enter Avi Training Reward.
4. In the Payroll Element field, search for and select Avi Training Reward
5. Click Save and Close to return to the Create Individual Compensation Plan: Avi Training Reward page.
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 User chooses date.
Configure Eligibility
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 this actions: Manage Individual Compensation
Configure Plan Info
1. Select the Plan Info tab.
2. Enter the following instruction:
Enter an amount no greater than $200.
3. Click Save and Close to return to the Individual Compensation Plans page.
At this point, you should have created and saved the Avi Training Reward individual compensation plan.
3. Create Compensation plan Bharat Ke Veer Deduction
Navigation : My Client Groups » Compensation » Individual Compensation » Individual Compensation Plans
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. In the Option field, enter Avi Bharat Ke Veer Deduction.
4. In the Payroll Element field, search for and select Avi Bharat Ke Veer Deduction
5. 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 User chooses date.
Configure Plan Access
1. Select the Plan Access tab.
2. In the Restrict Plan Access field, select Yes.
Add the actions: Manage Contributions.
Configure Plan Info
1. Select the Plan Info tab.
2. Enter the following instruction: Please enter the amount you would like to contribute for Bharat Ke Veer. Your deduction will happen in next month.
3. Click Save and Close to return to the Individual Compensation Plans page.
At this point, you should have created and saved the Avi Bharat Ke Veer Deduction individual compensation plan.
4. How to use Individual Compensation Plan
We have completed our configuration steps, and now it is time to test the same. First, we will see how a manager can reward an employee, and then we will also see how an employee can enroll in a contribution plan.
4.1. Manager to award Training Reward to employee
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 follow below navigation.
Navigation : My Team » My Team
Follow the above navigation and then click on the three dots (menu) against one employee, you will get option to initiate Individual Compensation, as shown in the image below.
Click on Individual Compensation link to open Individual Compensation page. In the When section enter new date or accept current date for the field
Award the Training Reward to employee
1. In the Additional Compensation section, click on + Add button
2. In the Plan field, select Avi Training Reward.
3. In the Option field, select Avi Training Reward.
3. In the Start Date field, select today’s date.
4. In the Amount field, enter 500
5. Click OK. An Error dialog box appears with the error message that we have configured earlier, as the amount cannot be more than $200.
6. Click OK to return to the Award Compensation dialog box.
8. Change amount to 200.
9. Click OK
10. Click on Submit Button (available at top right hand corner)
4.1.1. 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 Configure and Customize Approval Rules in Oracle Fusion for more information.
4.2. Employee to select Bharat Ke Veer Deduction
In the 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.
Login as employee and follow below navigation.
Navigation : Me » Personal Information » My Compensation » Click on Action menu and select value Manage Personal Contributions
When you click on Manage Personal Contribution, you will be navigated to Manage Contributions page. This page is same what manager saw. Follow below steps to enroll for Bharat Ke Veer
1. Click on the Continue button in the When section to accept default award start date
2. Click on the Add button, in the Personal Contribution section.
3. In the Plan field, select Avi Bharat Ke Veer Deduction.
4. In the Option field, select Avi Bharat Ke Veer Deduction.
4. In the Amount field, enter 100.
5. Click OK
7. Click Submit.
5. Validate employees are enrolled to the compensation plans
Navigation : My Client Groups » Payroll » Element Entries
To check employee is enrolled correctly to plans we need to verify that elements are attached to employee. To verify the same login to instance and navigate to Element Entries page. Search the employee who got reward as shown in the image below and you will notice both the elements are attached to employee. Source for these elements is Variable Compensation.
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 🙂
Individual Compensation Plan Questions and Clarifications
In this article, we have provided a demonstration of the configuration steps for an individual compensation plan by using two real-time business cases. We hope that you have enjoyed reading through this article and have gained valuable insights into the topic of individual compensation.
If you have any further questions or need clarification on any aspect covered in this article, we encourage you to post them on the forum hcmfolks.com. This platform serves as an open community for all Oracle HCM professionals, where you can engage with fellow experts, share knowledge, and seek assistance related to Oracle HCM topics.
We believe that active participation in such communities can enrich your learning experience and provide valuable networking opportunities. Don’t hesitate to take advantage of this resource to deepen your understanding of individual compensation and other aspects of Oracle HCM. Happy learning!
