Interview Questions: Compensation

Compensation Question and Answers

Compensation eligibility rules use a framework that is completely unique to compensation and is unlike anything else in workday (T/F)?
False

Compensation can be populated during staffing activities using defaults form the position/organization through edibility rules (T/F)
True

Compensation grades indicate the employees exact salary(T/F)
False

Compensation grade profiles allow localized salary ranges, currencies, and frequencies (T/F)
True

Compensation Elements tie compensation plans to payroll earnings(T/F)
True

Frequency is a required field on an allowance plan(T/F)
False

Which is not a field in the compensation grade (Currency and frequency, referenced by compensation package, eligibility rules, apply FTE%)
Apply FTE%

Which of the fields below are not part of the salary plan setup(Apply FTE%, Exclude from Merit, Reimbursable, none of the above)
Reimbursable

What is an available value for the number of Compensation Grade segments?
3, 4, 5

Which of the following should be included when setting up a compensation package?(Grades, plans, eligibility rules, all of the above)
all of the above

The system will still let you enter a base pay amount that is outside the compensation grade pay range (T/F)
True

What groups compensation plans and grades?
Compensation Packages

Determines an employee's eligibility for a compensation component during staffing events?
compensation eligibility rules

What is a component for which an employee is paid and for what purpose (salary, hourly, allowance)?
Compensation Plan

What is a required component to link compensation in HCM with Payroll to ensure accurate payroll earnings?
Compensation Element

Which comp element allows localization of pay range guidelines?
Compensation Grade Profile

Compensation eligibility rules use a framework that is completely unique to compensation and is unlike anything else in the workday system (T/F)
False

The system will allow you to enter a base pay amount that is less than or greater than the grade range for which the employee was eligible(T/F)
True

What will happen if an employee is eligible for three allowance plans but the plans are not in the compensation package for which they are eligible?
The plans will not default in but you can manually select the plans during the compensation step of a transaction

When configuring compensation you can specify different eligibility rules on the compensation plan and the compensation package(T/F)
True

Which of the following is not specified on a Compensation Package - Compensation Plans, Compensation Grades, Compensation Grade Profiles, or Eligibility Rules
Compensation Grade Profiles

Name two types of compensation plans
allowance plan, salary plan, hourly plan, one time payment plan

Which three compensation components are required for employees
A Comp Package, grade, and a plan

What are used to localize grades / define different ranges for the same grade based on locations
Grade Profiles

What is the purpose of a compensation eligibility rule
To determine an employee's eligibility for each compensation component to default in during staffing and compensation business process

If a worker is eligible for a compensation package are they also automatically eligible for the grades and plans within that package
no - the grades and plans do not assume the same eligibility as the package they are within. The worker must be also eligible for a specific compensation grade and plans within the package

which setting on a compensation allowance plan restricts users from changing the configured amount while proposing compensation during staffing events
the No Override checkbox

what are two ways that you can configure a compensation grade to a default during staffing transactions
assign the compensation grade directly to a job profile or attach an eligibility rule to the grade

T / F: Contingent workers have no compensation within Workday
True - only pay rate for reporting purposes, labeled with a (C) behind their name

What are the key components of compensation?
Grade (profiles)
Plan(s)
Package
Eligibility rules for each

What is used to allow for comp to default in during a staffing event?
comp eligibility rules

If I place an eligibility rule on a compensation package, will it default into grades and plans?
No

What is the purpose of compensation basis?
groups together comp components to find estimated earnings

What's the purpose of a compensation rule?
to determine who is eligible for each compensation component

T / F: The comp rules used at the package level flow through to the components
False - no inheritance

If a client wants one package for all employees, but has a unique grade and plan in the UK, what would your rule be and where would you apply it?
-Rule: All employees
-Apply it to Eligibility Rule for Grade and Eligibility Rule for Plan
*Wrong? Wouldn't the rule be Location: UK?*

If your comp did not default in during the staffing event, what would you check?
-Comp package: plans and grades are attached
-Eligibility rule for comp plan
-Eligibility rule for comp grade
-Make sure they aren't eligible for more than one grade, salary plan, or comp package

How many packages should an employee be eligible for to make sure it defaults?
one

What happens if an employee is eligible for plans, but not included in a package?
won't default, must go to pick-list

Where can you find the no override check box?
Allowance Plans

If compensation is given to a worker during a hiring event but is assigned a job profile with pre-assigned compensation, which one wins?
the compensation attached to the job profile

If an employee is eligible for a package that has 3 bonus plans, and they are eligible for 3 bonus plans, which will default in?
all 3

T / F: You can default compensation for position mgmt, headcount group, or job mgmt
True

True or False: Compensation eligibility rules use a framework that is completely unique to compensation and is unlike anything else in the Workday system.
False

True or False: The system will allow you to enter a base pay amount that is less than or greater than the grade range for which the employee was eligible.
True

What will happen if an employee is eligible for three allowance plans but the plans are not in the compensation package for which they are eligible?
The plans will not default in, but you can manually select the plan(s) during the compensation step of a transaction.

Related Terms and Glossary - Compensation

Compensation
Ability to offer competitive compensation packages, ability to handle global regulations and global employee and uses a single system for compensation

Compensation Grades
Provides pay range guidelines as references

Compensation Package
A grouping of compensation guidelines (grades, grade profiles, and their associated steps) and plans that you can assign to workers as a set. Packages provide a quick view of eligible plans for a particular job or group of employees.

Compensation Eligibility Rules
Determines an employees eligibility for a compensation component during staffing events

Compensation Plan
A component for which an employee is paid and for what purpose (ex. salary, hourly, allowance)

Compensation Element
Required component to link compensation in HCM with Payroll to ensure accurate payroll earnings

Compensation Grade Profile
allows localization of pay range guidelines

Compensation Element
Required component to link compensation in HCM with Payroll to ensure accurate payroll earnings

Supplemental Earning
Any compensation paid in addition to an employee's regular wages that includes, but is not limited to, severance or dismissal pay, vacation pay, back pay, bonuses, moving expenses, overtime, taxable fringe benefits, and commissions. In Workday, only supplemental earnings can be grossed-up.

Base pay element
The compensation components that are included in the calculation of base pay for the purposes of determining the compa-ration and target penetration. Example: include both this and bonuses in the base pay calculation for compa-ratio.

Compensation basis
A grouping of compensation components, such as salary, commission and allowance plans, that define estimated earnings for an employee population.

Compensation component
An umbrella term for compensation packages, grade, grade profiles, and plans that can be associated with compensation eligibility rules.

Compensation defaulting rule
A rule that establishes the criteria for how compensation components default worker compensation during staffing transactions (such as a hire or job change)

Compensation element
These link Compensation to Payroll. When this is attached to a plan that is assigned to an employee, Workday can determine which earnings to use to pay the employee.

Compensation rule
Guidelines for determining which workers are eligible for which components of compensation.

Compensation Target rule
A rule used to segment your employee population for assignment of compensation plans.

Compensation Step
A specific monetary amount within a grade or grade profile.

Reference Pay Range
A range of pay deemed appropriate for a compensation grade or grade profile. During compensation transactions, if proposed compensation for an employee extends beyond the limits of the range for the employee's grade or grade profile, Workday issues a warning yet still permits submission of the proposed compensation.

Compensation Terms

Terms and Definitions

Compensation Element

The smallest unit of compensation for a worker in a specific position. Workday uses compensation elements to determine the amount, currency, frequency, and other attributes of a worker’s compensation. Compensation elements are linked to compensation plans. For example, Base Pay, Car Allowance, and Commission can be mapped to any compensation plan, but not to merit plans. Payroll earning codes linked to a compensation element allow Workday Payroll and Payroll Interface to include the applicable compensation in payroll. A Compensation Element Group is a collection of compensation elements. For example, the group Standard Base Pay can be comprised of multiple compensation elements. Compensation elements do not need to be grouped, and groups are optional.

Compensation Plan
A component of pay that you use to assign monetary amounts to a worker's pay. For example, a salary, an allowance, or a bonus plan.

Some compensation plans, for example, a commission, are discretionary. You are not paid from these compensation plans in every paycheck. By contrast, other plans, like a salary plan, are included in every paycheck.

Grade Profile
A breakdown of a compensation grade by functional task, geographical region, or other categorization your business requires. A profile allows you to assign more granular compensation ranges to workers.

Compensation Rule
Guidelines for determining which workers are eligible for which components of compensation.

Compensation Step
A specific monetary amount within a grade or grade profile. Steps defined on a grade profile override any steps defined on the grade.

Reference Pay Range
A range of pay deemed appropriate for a compensation grade or grade profile. During compensation transactions, if proposed compensation for an employee extends beyond the limits of the range for the employee's grade or grade profile, Workday issues a warning yet still permits submission of the proposed compensation.

Compensation Package
A grouping of compensation guidelines (grades, grade profiles, and their associated steps) and plans that you can assign to workers as a set. Packages provide a quick view the eligible plans for a particular job or group of employees.

Compensation Defaulting Rule
Establishes the criteria for how compensation components default to worker compensation during staffing transactions (hire, promote, demote, transfer). Compensation defaulting rules ease data entry by automatically defaulting compensation components (packages, grades, grade profiles, and plans) to worker compensation for employees who meet the rule's eligibility requirements.

Compensation Basis
A user-defined grouping of compensation components; such as the sum of salary, allowance, commission, bonus, future payment, stock and retirement savings plans. Workday enables you to specify which compensation plans should be included in the compensation basis calculation. This calculation can be used to view employee compensation in Workday and in the bonus process to provide target pools and individual target amounts.

Compensation Matrix
Defines the bonus,merit and stock increase range based on employees' overall performance rating, retention rating, eligibility rule, or their salary range quartile. You can use a compensation matrix to generate a bonus,merit or stock pool, giving you the basic cost forecasting necessary to pay for performance (bottom-up budgeting), or you can use the compensation matrix as reference guidelines only but have a separate pools (top-down budgeting)

Compensation Structure
The arrangement of compensation grades, grade profiles, plans, and packages you create to best fit your company's compensation needs. Administrators, partners, and managers can use these compensation components and compensation eligibility rules to assign and update a worker's compensation plans.

Frequency

Used in compensation and payroll to help calculate worker compensation and pay.

Accrual

Defines how much time off employees can accrue, the timing of the accrual, and other rules. Can define eligibility rules, a frequency, and limits that differ from the time off plan.

Annualization Factor
The multiplier, which you set, used to calculate an annual amount of compensation for compensation plans. Each compensation plan has a frequency of payment, and each frequency has an annualization factor.

Base Pay Element
The compensation components that will be included in the calculation of base pay for the purposes of determining the compa-ratio and target penetration.For example, you can choose to include both base pay and bonuses in the base pay for purposes of determining the compa-ratio.

Merit Process
A sequence of one or more tasks related to defining, targeting, and awarding merit pay to employees. In this process, a compensation administrator creates the merit plan definition. The administrator or manager assigns the merit plan to employees through one of various means. Assignment of the plan determines eligibility for the merit compensation event. The administrator sets up the merit process, which funds the merit pool, and then launches the process on the specified event date. Workday creates merit compensation events for employees based on their organization. Managers review the target merit increases for their employees and submit merit increase proposals for review. Once approved, the employees receive their merit increases.

Bonus Process
A sequence of one or more tasks related to defining, targeting, and awarding a bonus to employees. In this process, a compensation administrator creates the bonus plan definition. The administrator or manager assigns the bonus plan to employees through one of various means. Assignment of the plan determines eligibility for the bonus event. The administrator sets up the bonus process, which funds the bonus pool, and then launches the process on the specified event date. Workday creates bonus events for employees based on their organization. Managers review the target bonus for their employees and submit bonus proposals for review. Once approved, the employees receive their bonus.