Variable compensation plans (form) [AX 2012]

Updated: January 24, 2012

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 > Variable compensation plans.

Use this form to set up variable compensation plans.

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

Button

Description

Levels

Open the Levels form, where you can maintain the levels that apply only to this particular variable compensation plan. To do this, you must select the Enable levels, check box.

Field

Description

Plan

Enter the plan name.

Description

Enter a description of the plan.

Effective date

Enter a starting date for the plan.

Expiration date

Enter an ending date for the plan.

Variable compensation type

Select the variable compensation plan type. The variable compensation plan type determines whether the plan awards non-cash or cash awards.

Enable enrollment

Select this check box to enable the plan for employee enrollment.

Variable award basis

Select one of the following options:

  • Percent of basis – Determine the variable award based on a percentage of the base pay.

  • Number of units – Specify a variable award amount.

Number of units

If the award is to be a set number of units for every participant in the plan, enter the number of units to award. This field is not available if the Enable levels check box is selected.

NoteNote

If this is a cash award, select the 1:1 relationship check box.

1:1 relationship

Select this check box to indicate that one award unit is equal to the value of one unit of the currency that you use to pay the employee. If the unit value is 1.00, the currency will be the same as the employee's fixed pay rate.

NoteNote

When you select Number of units for a cash plan, this check box is automatically selected and you cannot modify it.

Unit value

If the value of the award is more or less than 1.00 of an employee’s fixed pay rate, enter the value here. For example, if this is a stock award, enter the value of the stock. If this is a cash award, select the 1:1 relationship check box.

Unit currency

Enter the currency in which the unit is valued. This is required for stock awards.

NoteNote

Cash awards are based on the currency in which fixed compensation is paid.

Vesting rule

If this is a stock award, or another type of long-term award, select the vesting rule that controls the portion, also and the timing when a stock award will vest.

NoteNote

The information in this field is for reporting only.

Annualize the basis

Select this check box to calculate the award amount based on pay for a full year, regardless if an employee is paid daily, weekly, semi-monthly, or monthly.

Percent of basis

Enter a percentage of a base award to grant only if all plan participants receive the same percentage of their fixed pay.

If plan participants at different compensation levels are awarded different percentages, select the Enable levels check box and then click the Levels button to enter the percentages.

NoteNote

You can also use the Employee variable compensation enrollment form to enter the percentage of basis for an employee.

Recommendation

Select this check box to enable recommendations to be applied to this plan. This enables managers or a compensation administrator to suggest a pay amount that differs from the calculated amount that is specified by the plan.

Hire rule

Select the hire rule to control whether to award the full or a prorated amount for employees hired who are during the compensation cycle.

Enable levels

Select this check box to create a level progression that includes either a specific amount to award or a percentage amount (but not both), specifically for this plan. If you do this, the plan does not use the default levels that are defined for variable compensation plans.

Variable award basis

Indicate whether to use the standard fixed pay rate or the control point of the employee’s fixed compensation plan when determining the amount of an award.

Calculation

Select the calculation method to use:

  • Composite – Prorates all changes in compensation for the employee for the compensation cycle when calculating an award amount.

  • Point-in-time – Uses compensation information that is active at a specific point in time only.

Lowest allowable payout

Enter the lowest percentage of target to award.

This field value, the Tolerance level field value, and the guideline amount determine the amount of the bonus.

NoteNote

For information about how the tolerance levels affect this amount, see the description for the Tolerance level fields.

Per 1% under objective

Specify the percentage of the target award to deduct for each percent that the department is below the objective.

Payout at 100%

Specify the percentage of target award to pay if the department reaches 100 percent of the objective.

Per 1% over objective

Specify the percentage of target award to pay for each percent that the department achieves that is above the objective.

Highest allowable payout

Specify the highest percentage of target award to pay in the plan.

Tolerance level (Lowest allowable payout field)

Select the tolerance level to apply to the value in the Lowest allowable payout field.

For example, a tolerance level that is applied to the lowest allowable payout amount functions as follows:

  • None – Guideline awards are calculated without reference to the lowest and highest allowable payout amounts.

  • Soft – If the amount is less than the lowest allowable amount, a message is displayed if The guideline awards are set to 0 if they are less than the lowest allowable payout. Recommendations that are between 0 and the lowest allowable payout are allowed.

  • Hard – Recommendation amounts that are less than the lowest allowable payout are not allowed. Guideline awards that are less than the lowest allowable payout are set to 0.

Tolerance level (Highest allowable payout field)

Select the tolerance level to apply to the value in the Highest allowable payout field.

For example, a tolerance level applied to the highest allowable payout amount functions as follows:

  • None –Guideline awards are calculated without reference to the highest allowable payout amount.

  • Soft – If an amount is more than the highest allowable amount, a message is displayed. Guideline awards must be less than the highest allowable payout (and greater than 0). Recommendations that are more than the highest allowable payout are allowed.

  • Hard – Guideline awards must be less than the highest allowable payout. Recommendation amounts that are more than the highest allowable payout are not allowed.


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