Oracle Compensation and Benefits

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 Agenda

General Compensation Structures Overview

Elements: Define - Administer Process

Compensation Objects

Eligibility Profile

Activity Rates

Reports

Key Concepts

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 Compensation Policy Changes

It is inevitable that the business rules for compensation and benefits will
change over time. We can create new elements and disable existing ones at any
time. We can also make certain changes to existing elements and links, as
outlined below.

Element definitions, link definitions, and element entries are all date tracked.
This lets us track the changes to your compensation and benefit policies
without losing any of our historical employee information. The history of our
definitions remains in place for validation and reporting, and for future
calculations of back pay.

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 Maintaining Elements

After we have defined and used an element, we can make the following changes:

Change a required input value to be not required.

Alter the sequence in which input values appear in the Element Entries window.

Change the input value validation rules for minimum, maximum, lookup, or
formula.

Change the specification of which input values create Database Items.

However, we cannot remove Database Items if they are used in any formulas or
Quick Paint reports.

We cannot remove existing input values or add new ones if we have created any
entries for the element. To add an input value to an element before we create any
entries, ensure that we set the effective date to the element's start date.

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 Maintaining Links

Link rules always control the entry of element values at the time of entry.
Changes to link rules affect existing entries in different ways, depending on the
use of standard links and hot defaults. After we have used an element we can
make the following changes to the link rules:
Change the input value defaults and validation.
These changes affect all new entries. Changes to hot defaults affect existing
entries. The system also uses the new validation rules to check any updates you
make to existing entries.
Date-effectively end all of the rules that apply to an element and define a new
set of rules, which are effective from a later date. For example, suppose we
have defined eligibility for a company car based on grade. Following a change
of policy we must now define eligibility based on job.
We will not be allowed to end the link if any nonrecurring entries exist at the
date we want to end the rule. We must delete existing entries before we end
the link.
We can end the link if recurring entries exist. Any existing entries will be
ended automatically when we end the link.
Change the qualifying conditions of age and length of service that employees
must meet to be eligible for the element.
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 Policy Development

With Date Track we can also make future-dated changes to the information
safe in the knowledge that these changes will not become effective in the
system until the correct date.

In this way we can use our compensation and benefit information to plan
changes ahead of time; analyze the impact of these changes; adjust these
changes and generally smooth out the workload that is often associated with
major changes in compensation and benefits policy.

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 Compensation Objects

A description of the four compensation objects follows:

Program: A package of benefits offerings. Programs are important because

they set the boundaries for the benefits you offer. You define many
administrative procedures and rules at the program level.

Plan Type: A grouping of similar benefits offerings to facilitate their

management.
Example plan types include medical, dental, employee group life insurance,
and savings

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 Compensation Objects

Plan: A formally defined benefits offering that a participant can elect, such as a
medical plan.

Option: A level of coverage for a participant's election, such as Employee

only for a medical plan, or 2x Salary for a life insurance plan.

Attributes set at the program level are inherited by each level of the
compensation object hierarchy. However, if these same attributes are set at a
lower level in the hierarchy, the compensation object inherits those attributes
set at the lowest level at or above its level. A compensation object never
inherits attributes set at a lower level in the compensation object hierarchy.

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 HR/Payroll Extracts

The HR/Payroll Extracts feature enables you to extract employee and payroll
data, such as the details of earnings, deductions, and information elements for
reporting purposes.

You can use the extract reports for internal reporting, such as listing all
employees in receipt of a bonus, or for transfer to third-party providers, such as
pension providers.

For example, you can send details of new hires and terminations to a provider
on a weekly basis.

You can also make copies of the seeded extracts and modify their layout or add
different data elements to suit your reporting requirements. You can view and
correct the extracted information before writing the data to a file.

The extracts support both XML and ASCII formats, you can generate postscript
reports and you can export a file to Excel for reporting.

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 Pre Defined System Extracts

Oracle HRMS supplies the following predefined system extract definitions:

Global HR/Payroll Extract - (full-profile extract) extract the payroll data of

your employees. This extract contains identification and demographic
information of your employees and reports on payroll data such as earnings,
deductions, and other information elements.

Global HR/Payroll Information Changes (Single Record) - (extract for

changes) report on changes to employee personal and plan details, such as the
name change of an employee. You can also report on new hires and terminated
employees using this extract. This extract does not include payroll data. It
includes only employees whose records have changed, and you can configure
which changes trigger the
extract. It displays all the changes for each employee as part of a single record,
in the same row.

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 Compensation Objectives :Plan Design

Your plan design defines, categorizes, and helps you to manage the benefits
that you offer to your employees and other eligible participants. The plan
design is the domain of the benefits practitioner who uses the product to define
the structure and elements of the benefits offering and the rules that administer
these benefits.

At its core, the plan design determines the benefits that eligible participants
may receive. Examples of such benefits include health and welfare plans,
savings plans, and group term life insurance.

You structure your benefits offerings according to a hierarchy so that the rules
and definitions that are set at the top level (the program) cascade to the benefits
at the bottom level (the options in the program).

Your plan design also includes eligibility definitions and enrollment

requirements, and the activity rates calculations that determine the
contributions and distributions associated with a plan..

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 Compensation Objectives :Plan Design

Central to benefits administration are the compensation objects that you use to
define, categorize, and manage the benefits that you offer to eligible
participants. The four compensation object types that you use to structure your
benefits offerings are programs, plan types, plans, and options.

Defining compensation objects is a key part of your overall plan design that
includes defining eligibility and enrollment requirements, plan year periods,
activity rates, and other elements of benefits management.

The hierarchical structure of compensation objects

Viewing a program structure that you have defined

Hierarchical Structure of Compensation Objects

Compensation objects are designed hierarchically so benefits that share similar

features can be defined in similar ways. You build this hierarchical structure by
defining attributes of the different compensation objects and then linking the
components into a hierarchy.
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 Compensation and Awards Management Overview

In an enterprise, you need to compensate and award benefits to eligible

employees. The enterprise determines who is eligible for compensation and
awards, and who can allocate them. Most compensation cycles include or
exclude certain employees, based on enterprise requirements.
Compensation could include salary, bonus, allowances, vehicle
mileage payments, and stock options. Allocation of compensation may depend
on factors such as current salary, grade, position, time since last pay raise, and
other factors. You also need to convey this compensation information to your
employees easily.

We can set up compensation and awards programs for managers to use to

evaluate and make compensation decisions. Well-designed programs help you
achieve your goals, retain qualified employees, and reward performance.
Oracle HRMS helps us design a successful compensation program and convey
compensation information to the employees.

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 Using Oracle SSHR to Manage Compensation and Awards

As a manager, we can use Oracle SSHR to effectively manage compensation,

make informed decisions and create and allocate budgets.

Using Individual Compensation Distribution (ICD), we can:

Assign one-time or recurring awards, bonuses, and allowances to qualified
employees.
Navigate a self-service flow that creates a proposal for a spot bonus. You can
use the same process to award a car allowance or relocation package to an
eligible employee.
Define recommended amounts by using the plan and a common eligibility
engine.
Enroll and set contribution levels in discretionary contribution plans such as a
charitable contribution plan, or a savings bond plan.

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 Compensation Workbench

Compensation Workbench is a flexible tool enabling line managers to publish

compensation budgets, and allocate compensation awards and salary increases
to their teams.
Using Compensation Workbench for Administrators, compensation
administrators can also monitor the progress of compensation cycles and
perform overrides and exception processing, as required.

Super Administrators can control or grant access of compensation workbench

plans to administrators.

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 Individual Compensation Distribution

Self-Service Individual Compensation Distribution.

Managers and other employees responsible for distributing compensation use

Self-Service ICD to assign one-time or recurring awards, bonuses, and
allowances to qualified employees such as housing allowances, spot bonuses,
and company cars.

Employees use Self-Service ICD to enter voluntary contributions, such as

savings plans, charitable organizations, and company perquisites.

Using Oracle HRMS, you can give managers throughout your enterprise the
authority and ability to assign one-time or recurring awards, bonuses, and
allowances to qualified employees and other individuals using Oracle Self-
Service Human Resources.

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 Individual Compensation Distribution

Components
Compensation Managers use the Oracle HRMS professional user interface to
define components of the award or allowance. They also configure employee
self-service ICD for use by non-manager employees. The manager or the
employee uses Oracle SSHR to assign the award. Compensation Managers set
up the following:

Plan Design - plan types, plans and options

Enrollment Requirements for the Plan - coverage/rates start and end dates,
action items and certifications
Activity Rates and Coverage Calculations for the Plan

We can also configure employee self-service ICD for use by non-manager

employees. For example, if the enterprise offers a charitable contribution plan
or a savings bond plan to which employees contribute at their own discretion,
we can enable the contribution through the self-service interface.
Using elements, we can process the distributions through Oracle Payroll. For
recurring distributions, we can define the distribution end date, or, using Fast
Formula, enforce the total maximum distribution you allow in a period.
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 Total Compensation Statement

You can create Total Compensation Statements to communicate

compensations, rewards, and benefits to your employees and contingent
workers. They can use this statement to view their total compensation for a
specified period, often one year through an easy-to-use self-service interface.

Total Compensation Statement enables you to add graphs and links to

additional information. Using a rich text editor, you can compose a welcome
message that greets employees when they view their statements. Employees
can print a PDF of the statement and view it at their convenience.

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 Leave and Absence Management

Employees take paid or unpaid time off from work for a variety of purposes,
such as illness or injury, vacation, labor or trade union representation and
professional activities. Maintaining information on employee absences for
reporting and analysis is an important aspect of human resource management.

Oracle HRMS provides a convenient way to maintain information about the

various absence types your enterprise recognizes.

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 Benefit Plans

Benefit Plans supported by Oracle HRMS.

Medical plans
Dental plans
Vision plans
Prescription drug plans
Short term and long term disability plans
Group term life insurance
Dependent life insurance
Group legal services
Savings plans (such as 401(k) and money purchase)
Vacation Buy/Sell plans
Continuing benefits (such as COBRA and HIPAA)

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 Self-Service Benefits Enrollments

Self-Service Benefits supports a variety of enrollment types, including open,

unrestricted, and life event enrollments for one or more flex or non-flex
programs.

The enrollment choices, price tags, and other information in Self-Service

Benefits web pages are derived from Oracle Applications database tables using
the rules of your plan design. Updated information is stored in the Oracle
Applications database tables using standard Application Programmable
Interfaces (APIs).

Self-Service Benefits supports enrollment for plans and options in a program.

Use vertical plan types, which can have multiple rates, to enable plan level
enrollments and horizontal plans types to enable enrollments in options inside a
plan level with single rate. Use Oracle's professional forms interface or the
self-service Individual Compensation Distribution web pages to enroll
participants in all plans not in a program such as savings plans, Employee
Stock Purchase Plans (ESPP), or 401(k) plans..

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 Self Service Benefits : What-If

Self-Service Benefits What-if enables you to model electability for benefits

based on proposed changes to a person's HR record, before you make the
actual change. When you model electability, the database does not save
changes, so you can view different electability scenarios without having to
manually save data.

The Self-Service Benefits What-if page is available from Manager and

Employee Self-Service Responsibilities.

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 Life Events

You define a life event reason as any change to a person that impacts benefits
participation. The system creates a life event when it detects a change in a
person's HR record that you have defined as a life event reason.

You can define these types of life event reason:

Compensation--Use this type to set up one life event reason for each
Compensation Workbench plan

Absence--Use this type to set up three life event reasons (Absence Started,
Absence Ended, and Absence Deleted) to detect creation of, and changes to,
absence records.

Checklist--Use this type to assign an HR administrator a series of tasks based

on a common event, such as a new hire or termination.

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 As an Advanced Benefits customer, you can use the Plan Design Wizard to:

Configure your plan design.

Set up default enrollments.
Define participant and dependent eligibility requirements.
Set up activity rates, including variable rates and coverage calculations.
Define life event reasons.
Set up scheduled enrollment periods.
Define enrollment requirements based on life events.

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 After you complete your plan design in the Wizard, use the professional user
interface to:
Update plan design components not available in the Wizard.
Define flex credit calculations and benefit pools.
Set up premium calculations.
Define colliding life event logic.
Set up action item details.
Define any combination plan types.
Set up distribution rules if you offer reimbursement plans.
Define communication types.
Set up What-If eligibility modeling.
Set up the Benefits Service Center for centralized administration.
Attach any FastFormulas you have written to the appropriate form.
Define system extracts to transfer enrollment data to third party administrators.

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 Advantages of Advanced Benefits

As an Advanced Benefits customer, you can take advantage of a full range of

features, including:

Automated Life Event Management.

What-If Eligibility Determination.
Mass Enrollment Processing.
Oracle strongly recommends that you implement the Life Event processing
model to automate benefits administration. This model enables you to configure
enrollment restrictions based on specific life events that you define. Life event
processing manages complex situations; for example, when a participant reports
a life event that occurred in the past and other elections are already in place, or
when the elections and rates for a life event must become effective in the past.
Consider the following questions that illustrate the advantages of the Life Event
processing model:

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 Do you want to process mid-year election changes automatically for a single
participant? Would you like to perform mass enrollment updates or corrections?
Do you need to automatically assign certain benefits to employees or family
members?
Do you anticipate automating your administration practices in the future? Do
you need to enforce business rules, such as requiring or reminding a participant
to designate dependents or requiring a participant to provide Evidence of
Insurability?
Do you restrict an employee s benefit choices based on life events, such as a
marriage or the addition of a child?
Would you like to operate in a Self-Service environment where employees
record their own elections through a web browser? Would you like to allow
employees to use Self-Service for mid-year election changes and to restrict the
allowable updates based on the reason for the change?
Answering Yes to any of the above questions-in conjunction with planning the
components of your benefits program-should justify implementing the life event
model. The Plan Design Wizard assists you with this configuration.

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 Using the Plan Design Wizard

Read this section for helpful hints about using the Plan Design Wizard in
conjunction with the professional user interface.

Create HR data first. Use the professional user interface to define your
common HR data, such as organizations, locations, and jobs that you may use
for eligibility determination. You also define distribution-related data, including
elements, input values, and open links. If you use Oracle Payroll, or if you
export payroll or administrative data to third parties, you should create
elements, input values and links. You will attach elements and input values to
the activity rates you define for your plans in the Wizard. You can define HR
data at anytime, then search for the data using the Wizard.

Map out re-usability. If you define multiple programs, determine which

programs share plans and what plan design data is unique to each program.

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 Test as you go. For a complex implementation, you should not expect to enter
your complete plan design into the database in one session. Many customers
find it helpful to define all the plans and standard rates in a single plan type,
then upload the plans to a sandbox business group for testing. Make sure that
rates, coverages, and elements entries return correct results before continuing.

Use Plan Design Copy. You can create one plan and copy the plan as many
times as you need within a business group, or move your entire plan design
setup to a new business group or database instance. You can then use the Wizard
to group the components into your final program.

Create a Final Program. After you complete testing, use the Wizard to create a
final program. Attach the finalized plans and options to the program. Add any
program specific setup, such as eligibility profiles, activity rates, or default
enrollments that are unique to the program

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 Questions

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PLEASE GIVE YOUR FEEDBACK TO:
Venkataramana_Kolla
Srikant_Ganesan

You can contact me at:

Kameswara_Ayalaomayajula@satyam.com

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