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Create a compensation cycle

Setup a new compensation cycle for your organisation.

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Written by Onyema Onyejekwe
Updated this week

To create a new compensation cycle for your organisation watch the video or follow the steps below:

Create a compensation cycle

  1. Open Pay Planner and click the Cycles tab.

  2. Click New cycle.

  3. This will open a new cycle wizard, see the table below for actions to take within each steps:

Step

Actions

Details

  • Fill in the cycle’s name and description.

  • Select the pay types to include in the cycle.

  • Enter pay effective dates.

  • Add collaborators, if required.

Setup

  • Enter a Snapshot date.

  • Select your cycle currency.

  • Select whether you want the budgeting method to be uniform or flexible.

Eligibility

  • Set up rules to filter the employees included in the cycle, using eligibility rules and/or manual overrides.

Base pay

  • Fill in your base pay budget and set a holdback amount to cover budget overruns, if required.

Bonus

  • Select the Bonus period start date.

  • Set your company's target achievement percentage.

  • Set a holdback amount if required.

  1. Once each step is complete, click Create.

Complete Set up

Once you've created your cycle it will open for you to review the criteria set up and make updates, add collaborators, and check cycle data before adding your Timeline, Pay Philosophy and creating manager Assignments.

This can be completed using the following screens:

  • The Essentials tab to where you can review the cycle details, amend settings and set up pay letters.

  • The Cycle Data tab to where you can review the employees included in your cycle and check the data health.

  • The Eligibility tab to make changes to your rules and exclusions.

  • The Budget tab to make amendments to the budget settings.

Create a Timeline

Once you are happy with your compensation cycle set up and data you can create a visual roadmap for your compensation cycle with key milestones and deadlines.

To do this, follow the steps below.

  1. Click the Timeline tab, then click Add milestones.

  2. Enter the Cycle end date.

  3. The stage durations and end dates will automatically populate; adjust them as required

  4. Click Save.

Set your pay philosophy

You can create your pay philosophy using two approaches. Select a preset, use a proven framework based on your data or Start from scratch where you can build a completely custom approach.

To configure your pay philosophy, follow the steps below.

  1. Click the Pay philosophy tab then click Set up pay philosophy.

  2. For your chosen option click Use preset or Start from scratch.

  3. Customise your pay elements using the tabs on the lefthand side. For example, to reward employees based on performance ratings. Click the Merit tab.

  4. Click Customize merit matrix.

  5. Adjust the percentage increases for the different performance and range position combinations.

  6. Click Close.

  7. Add a Summary of your approach, if required.

  8. Review the generated recommendations.

  9. Click Save.

Set assignments

Assign managers to oversee compensation decisions for their teams. Once you release tasks, assigned managers receive notifications to begin their allocation work.

To set up assignments, follow the steps below.

  1. Click the Assignment tab then click Set assignments.

  2. Tasks are automatically assigned based on your organisation and supervisory hierarchies.

  3. This can be customised for example, you may need to reassign a task or add supporting users to ensure coverage.

  4. Click Assignee and select the appropriate manager for each level.

  5. Click Save.

  6. You are now ready to move your compensation cycle to the Allocation stage.

  7. Click Start allocation to send manager notifications and start the Manager Review.

Related Articles
Set up budget segmentation
Configure your pay philosophy
Monitor and review compensation decisions
Complete compensation allocation tasks
Close a compensation cycle
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