Compensation Management Lifecycle | HCM Simplified

Compensation management is the process of managing, analyzing, and determining the salary, incentives, and benefits each employee receives. Compensation managers aim to attract, retain, and engage employees by offering broad and competitive compensation plans within the company budget.
The compensation management is part of Talent Management suite in HCM.
There are three types of compensations managements based on what compensation elements are targeted:
Base Compensation
Variable Compensation
Total Compensation

Base compensation only administers period salary revisions or increments and it affects only the base pay or salary. Few instances such as salary increments based on performance appraisal once or twice a year come under this category.

Variable Compensation administers following compensation elements:
Bonus
Awards
Gifts
Variable pay is the portion of sales compensation determined by employee performance. When employees hit their goals (aka quota), variable pay is provided as a type of bonus, incentive pay, or commission. Base salary, on the other hand, is fixed and paid out regardless of employees meeting their goals

Total compensation administers all these compensation elements:
Base Pay
Insurance
Benefits

The compensation management lifecycle consists of these steps:
Setting budget
Creating Worksheet
Proposal and sending for approval
Approving the proposal
Applying changes

The compensation management module takes input from Performance Management module to calculate the proposed increment based on the appraisal ratings and rating matrix defined.

Chapters:
0:00 Overview
2:47 Types of Compensations
5:00 Compensation Process Lifecycle
5:50 Setting Budget
9:36 Creating Worksheet
11:56 Proposal
17:47 Approval
19:42 Applying Changes

If you are interested in HCM training videos across modules such as Core HR, Payroll, TLM, Benefits, Performance Management, Compensation Management, Recruitment then visit https://peoplesoftconcept.blogspot.com/

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