Fixed compensation plans (form)

Article
05/05/2014

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

Click Human resources > Periodic > Compensation > Fixed compensation plans.

Use this form to create fixed compensation plans of the Grade, Band, and Step types.

When you set up a compensation plan, you create a compensation matrix that is composed of a set of ranges and a set of levels, and then you add the appropriate pay rates to create a compensation structure.

You associate a compensation plan with a worker in the Employee fixed compensation form.

Workers are limited to a set of plans through eligibility rules, which are typically derived from criteria associated with a worker's position and job.

Example

In a Band type compensation plan, the compensation structure might look like the information displayed in the following table.

Levels:	Range 1	Range 2	Range 3
	Minimum pay range	Medium pay range	Maximum pay range
Level 1	200,000.00	275,000.00	350,000.00
Level 2	125,000.00	175,000.00	225,000.00
Level 3	72,500.00	107,500.00	142,500.00
Level 4	27,500.00	57,500.00	87,500.00

Task that uses this form

Key tasks: Compensation plans

Navigating the form

The following tables provide descriptions for the controls in this form.

Tabs

Tab	Description
General	Modify or view details about a compensation plan.
Range utilization matrix	Create or view the steps in a range utilization matrix. The steps in the matrix impact the amount of a pay increase, depending on where workers’ fixed pay is within their compensation ranges. This matrix is used as an option when calculating increases during a process event.

Buttons

Button	Description
Set up compensation	Open the Set up compensation form, where you can set up the compensation grid for the selected fixed compensation plan. Note If you are creating a new record, you must save the record before this button is available. If you have already set up a compensation grid for the selected fixed compensation plan, this button is not available.
Compensation grid	View or maintain the compensation structure or pay rate ranges for a fixed compensation plan. Note This button is available after you set up a compensation grid for the fixed compensation plan.

Fields

Field	Description
Plan	Enter a unique name for a fixed compensation plan.
Effective date	Enter the earliest date and time when the compensation plan is effective.
Expiration date	Enter the date and time when the compensation plan is no longer effective.
Type	Select a plan type. The plan type determines how to calculate pay that is relative to the compensation structure. Grade – Use this plan type for a broad range of pay rates. Typically, this compensation plan type has the least number of levels in it. Band – Use this plan type for a plan that contains many levels. Step – Use this plan type for only the most graduated plans. For example, you might use a step compensation plan for jobs that have hourly pay rates.
Market price indicator	Select this check box to use the market price ranges entered for each individual job, in addition to the broad compensation ranges entered for this compensation plan. This option is available only for Band type plans.
Enable recommendation	Select this check box to allow overrides of the calculated guideline results of the automatic event process. If you allow process overrides, you will allow pay recommendations outside of the guideline amounts, based on a manager’s input.
Out of range tolerance	Select a tolerance to determine how to calculate pay rate changes for workers associated with the selected plan. None – No restrictions. Soft – No restrictions, but a message is displayed if the pay rate is below the minimum or above the maximum of the compensation range. Hard – Forces you to stay between the compensation range minimum and maximum amounts and automatically adjusts low or high amounts to comply with the range.
Hire rule	Select the basis of the merit increase. None – A worker receives a full merit increase, regardless of the hire period within the cycle period. The calculation is based on the full year. Percent – A worker receives a merit increase based on the period from the hire date and up to the ending date used in the cycle setup for the calculation.
Currency	Select a currency for the plan.
Pay frequency	Select the pay frequency for the fixed compensation plan.
Compensation structure	The compensation structure that applies to the plan. The compensation structure is based on the reference point setup and the levels that you select for the plan.
Control point	Select a reference point as a control point. You must set up a compensation structure for the fixed compensation plan before this field becomes available. The control point indicates the target pay rate for a job covered by the current plan. Note The range "midpoint" is most frequently used, but any reference point is allowed.
Utilization percent	Enter the level of the range utilization. The lower a worker is in their range, the larger the resulting pay increase; the higher they are in their range, the lower the resulting pay increase. You can select a different level each time you run a compensation process event for workers to move them toward the middle of their range.
Increase modifier percent	A factor applied to a budgeted increase amount, as modified by performance and other criteria during a process event, to move employees toward the middle of their range over time.