compensation planning theory · 2020-01-01 · compensation planning theory february 2018 •...

Compensation Planning Theory

Compensation Planning Theory February 2018

• Define Compensation planning and goals

• Identify the key components & concepts of Compensation Planning

• Define Human Capital Planning (HCP) & HCPRptg tools

• Review the flow and timing of data in and out of HCP

• Identify where to go for additional information and support

Learning Objectives


Handouts

Training Material Overview

On-Line• CalPlanning Job Aids and Materials• Training Evaluation

• Compensation Planning Theory Slide Presentation

• Sample Reports• Compensation Planning To Do

List


Compensation Planning Key Components

Human Capital Planning (HCP) and HCPRptg Tools

Human Capital Management (HCM) Data in HCP

Employees & To Be Hired Employees

Pooled Positions

DeptID Adjustments

Post Training Support

Agenda

6

7

1

2

3

5

4


Compensation Planning

Based on your unit’s strategic plan what is the workforce needed to achieve your goals and how you will fund in the context of budget targets?

Compensation expenses can represent up to 85% of a unit’s total budget making compensation planning a critical part of your budget.

Planners create a compensation plan to reflect all of the planned earnings and benefit expenses for their unit’s employees.

Level of complexity increases as # of employees and mix of employee types and funding sources increases.

Current workforce details dependent on timing and accuracy of data in HR’s Human Capital Management (HCM) employee record source system.


UC Berkeley Employees

Who are our employees?

• Faculty• Staff• Student Workers


To be HiredEmployees Pooled Position

• Employees – the current roster of employees who are funded from your DeptIDs• To Be Hired Employees – placeholders for employees you plan to hire in the

future who will be funded from your DeptIDs• Pooled Position – groups of highly variable employees in job codes with seasonal

fluctuation who are funded from your DeptIDs

How do we categorize our employees for compensation planning?


• Composite Benefits Rate (CBR)• Fee Remission

• Graduate students who hold academic appointments may be eligible for an award for tuition &/or fees awarded by the university.

• The amount of the fee remission students may be eligible for depends on the type of appointment that is held during the current semester.

• General Auto & Employee Liability Insurance (GAEL)• Covers earthquake, cyber, and premium

liability coverage mandated by the UC Office of the President

• Charged and budgeted as a percentage of salary

Employee Benefits

• Monthly Pay Rate represents the amount of money employees are paid for a full-time month of work.

• Earnings Distribution defines the planned salary funding distribution by Entity, Account, Fund and CF1 in HCP. The Distribution % serves as the ~proxy FTE in HCP.

• Full Time Equivalent (FTE) unit indicates the workload of an employee in a way that makes workloads comparable across various contexts. An FTE of 1.0 is equivalent to a full-time employee, while an FTE of 0.5 signals half of a full work week.

• Salary Expense auto calculated product of the Monthly Pay Rate * the Earnings Distribution % or ~proxy FTE in HCP.

Compensation Planning Key ConceptsEmployee Salary

https://riskservices.berkeley.edu/insurance-programs/liability

https://en.wikipedia.org/wiki/Workload


CBR• Charged and budgeted as a percentage of salary • Rates include most, but not all, costs traditionally known as fringe benefits• Excluded costs are

• Graduate Student Health and Fee Remissions• GAEL• Vacation Accrual• All other costs in account series 52XXX

Composite Benefits Rate (CBR)


$

Compensation Planning

• Faculty• Staff• Student Workers$

2. Create Employee Salary & Benefit Plans• Salary Expenses• Benefits

To be HiredEmployees Pooled Position

1. Manage our Workforce

$ $

$

$$


Compensation Planning To Do List

Create a Compensation Planning To Do List

Make a Fidelity Appointment

Complete Recharge Form

Enroll in Navigating HCP class

1. How many employees do I have in my entity by type • Faculty • Staff • Student Workers






Pooled Positions

DeptID Adjustments


Agenda

6

7

1

2

3

5

4

13Compensation Planning Theory February 2018

Human Capital Planning (HCP)

Human Capital Planning allows planners to• Create next year’s Operating Budget for Compensation Expenses using

Employee data from our HR system, Human Capital Management (HCM)• Revise your current year Compensation Forecast by reviewing Actuals-to-date

and impacts of strategy changes, allowing us to align our resources in year.

HCP(Human Capital

Planning)

• Plan for future changes to calculate impact to employee budget data

• Plan for future hires plus additional compensation expense by DeptID

• Manage distributed expenses at the employee and DeptID level

• Review auto-calculated expenses based on accurate Fringe, GAEL, and Fee Remission rates


HCPRptg Tool HCPRptg

HCPRptg provides pre-defined or canned reporting module with Point of View (POV) member selection options to create user defined reports.• Use to view Human Capital Planning (HCP) compensation plan

data for future year Operating Budgets, in year Forecasts and Actuals

• Provides visibility to both employee level and summarized data • Source Systems: Personnel Payroll System (PPS) for monthly

actuals, EDW for saved Plan data


• HCP001 – Employee Salary by Fund and Job CodeUse to review plans by one compensation account at a time created in HCP after the simplification of HCP (FY18 Forecast Working and later)where we planned by employee and job code. The report displays the Job Code # and description along with the employee name and employee ID.

• HCP001 – Prior Feb 2018 sHCP –Employee Salary by Fund and Position Run to view plans by one compensation account at a time created in HCP prior to the simplification when we planned by employee and position. The report displays the Position number along with the employee name and employee ID.

• HCP002 – Comp and Non-Comp Expense Variance –Scenario vs Actual displays detailed salaries and non-comp expenses planned vs. actuals

• HCP002- Prior Feb 2018 sHCP Comp and Non-Comp Expense Variance –Scenario vs Actual

• HCP003- Job Code Trend by Actual Payroll $ and FTE presents actual payroll FTE for one compensation account for 5 prior fiscal years by Job Codes

HCPRptg Reports Prior and Post Feb 2018


Reporting Only Planners

Tool • CalRptg • HCPRptg • CalPlan• CalRptg

• HCP• HCPRptg

Actions

•RunCalRptg reports

•Analyze reports

•Run HCPRptg reports

•Analyze reports

• Input financial plans

• Run & analyze CalRptg and CalPlan reports

•Input employee plans

•Run & analyze HCPRptg reports

Security• Global

Read Only• Entity

Read Only• Entity Read &

Write Access• Entity Read &

Write Access

Who Uses HCP?

17Compensation Planning Theory February 2018 17

Dimensions define how data is organized within the CalPlanning tools. Here are the dimension members available to work with in HCP. The members in grey font are read only in HCP and the black font are editable.

HCP Dimension Members

VersionWorking

Entity1_26301

AccountA40XXX

YearFY18

ScenarioForecast

Chart1C1_SUMPLN

Fund5 Plan Only Fund Members

PeriodYearTotal

2018

2019

Forecast*

Operating

Budget*

Working* YearTotal

Jul to Jun

(closed months)

(open months)

Examples

Compensation &

fringe accounts

Total Compensation

Expenses

A50211

A50212

53070

Current Funds

Unrestricted-Plan

Designated-Plan

Restricted Gifts-Plan

Restricted Endowments

and FFEs – Plan

Contracts andGrants – Plan

Examples

C1_SUMPLN*

C1_3S0XXX

C1_3S00MC

C1_3BEARS

Read OnlyEditable

Examples

1_EVCP3

1_10135

1_HAAS3

1_10372

1_COCHM

1_10965

EmployeeE12345678

Job Code0213

Examples

Carol Christ

Saul Perlmutter

Examples

1100_Professor-Acad Yr

4722 _Assistant III

7709_Financial Analyst 3*Dimension label not displayed on forms


HCP Employee & Job Code Dimensions

• Existing employees were fed from HCM along with their Employee ID, Job Code and Earnings Distribution(s)

• Member name for existing employees

= E + Employee ID

• Plans for new or To-Be-Hired (TBH) employees can be created in HCP to capture their compensation expenses in your budget

EmployeeE12345678

Job Code0213 Financial Analysis

Manager 2

• Job Code – the alpha suffix + job code description

• Fed from HCM

• Determines Salary Account in the Earnings Distribution






Pooled Positions

DeptID Adjustments


Agenda

6

7

1

2

3

5

4


`

BFS/BAIRS/Cal Answers Financials CALPLANNING HR

Planning

Reporting

HCPRptg

HCM Human Capital Management

Position Management

Actuals &Encumbrances

Actuals

OperatingBudget &Forecast Plan Data

Summarized Actuals

Summarized CompensationPlans

DetailedEmployee

Compensation Plans

BAIRSCalPlan

Detailed Employee

Payroll & FTE Actuals

Detailed Employee

DataHCP

Human Capital Planning

5xDaily *Monthly

FY2019Annual

Snapshot5xDaily *

HCM snapshot on 2/06/2018 of

active data from 7/01/2017 and

forward.

5xDaily*

Flow and Timing In Our Financial Landscape

Nightly

PPSPayroll Personnel

System

Monthly

Nightly

Smart View

Detailed Employee

Data

CalRptg

BFS

* Data pushes every three hours between 9:00am and 9:00pm. Check http://budget.berkeley.edu/systems/calplanning for more on the data push schedule and updates to CalPlanning system availability.

Berkeley Financial System

Berkeley Administrative Initiative Reporting System

Nightly

Cal Answers Financials

Actualized Forecast

EBC** Live 12.19.17

**compensation includes fee remission

Actualized Forecast Live Feb

2018

http://budget.berkeley.edu/systems/calplanning


HCM Employee Data Refreshed in HCPA snapshot of Human Capital Management (HCM) data was taken on 2/06/18 EOB and includes all active employee data on and after 7/01/17. This data will be available in HCP when we re-open CalPlanning on 2.21.18.

HCM(Actual Employee and Job Code

data)

HCM SnapshotAs of 2.07.18

HCPPlanned Employee & Job Code

Compensation Expenses

Employee Data (excluding those in the 12 Pooled Position Job Codes)• Name• Employee ID• Job Code• Monthly Pay Rate• Earnings Distributions

Employee Data refreshed on the Manage Existing Employees & Job Codes forms

Employee Data for Employees in the 12 Pooled Types – (e.g. GSR/GSI, Summer Salary) (Not Refreshed)

Pooled Positions – Planner created and manage ongoing

Additional Compensation DeptID Compensation Adjustments – Planner created

Loaded

$


• Only REG earnings distribution lines are loaded into HCP from HCM• To plan for other earnings codes (BYA, etc.) not loaded from HCM,

planners can manually enter them into HCP via• Adjusting the employee’s monthly pay rate if additional earning

funded from the same earnings distribution, IF material • If funded from a different earnings distribution, planners can use

DeptID Compensation Adjustment in account 520XX-Other Employee Compensation – Plan or any other available compensation account

HCM Data Flows to HCP


Planners can view their FY18 Forecast values prior to the February 2018 HCM refresh in HCP via the read-only Jan18HCP.

Jan18HCP

Jan18HCP

Jan18HCP application design reflects the pre-simplified HCP look which will be unfamiliar to new planners.


Deleted from HCP• To Be Hired Positions• DeptID Adjustments

Added • Job Code & Descriptions• Pooled Position Type

FY18 Forecast Working HCP001 ReportDisplays list of employees and Pooled Position funded by Entity selected in POVReflects plan data post February 2018 HCM to HCP refresh and simplification of HCP

Job Codes & Descriptions

Pooled Position Type


HCP001, Employee Salary by Fund and Job Code Report

Report Account PromptsReport POV

Check the Edit Member Names box to type directly into Account Prompt

Click on the Go to Member Selection magnifying glass to choose from the list of available Compensation Accounts .

While the Member Selection box will allow for multiple accounts in the Selected section, do not include more than one.

Use the left and right arrows to move members from the Selected to the Available sections


Exercise 1: Review HCP001 Report







2. Is there anything you know about your employees’ data that was not captured in HCM as of 2.06.18?

3. With the refresh of HCM data (as of 2.6.18)into HCP, how many of my employees’ compensation plans need review?






Pooled Positions

DeptID Adjustments


Agenda

6

7

1

2

3

5

4


To be HiredEmployees

What do we need to plan for our Employees and To Be Hired employees?

• Monthly Reg Salary• Earnings Distribution by

• Entity• Salary Account (Job Code)• Fund• CF1

• Distribution % ~ proxy FTE

• Benefits (Salary Account)

• Same as Employees • + Start & End Month


Calculating Planned Salary & Compensation Expenses in HCPTo calculate an employee’s Salary Expense you need a Pay Rate + Earnings Distribution

On the General Ledger Compensation Expense are dispersed to Entity, Account, Fund, Chart1, Chart2 and Program Code using actual distributions (detailed) and do NOT include actual benefits at the employee level. Employee Benefits are consolidated by chartstring.

Salary Expense X =

Earnings Distribution Employee

Planned Pay Rate in Month

• Planned in Month• Employees can have multiple

distributions

Salary Expense X (1 + CBR% + GAEL%)

Total Compensation

Expense=In HCP Compensation Expenses (including benefits) are planned to Entity, Account, Fund, and Chart1 using planned distributions (simplified) by employee.


Exercise 2: You Do the Math! Calculate Employee Salary Expense

Dept ID Fund Chart1Monthly Reg

Rate DistrYear Total

Salary

31650 Restricted-Plan AXF001 $1,000 .25

31650 Designated-Plan AXF001 $1,200 .5

Year Total Salary Expense


Exercise 2: You Do the Math! Calculate Employee Salary Expense

Dept ID Fund Chart1Monthly Reg

Rate DistrYear Total

Salary

31650 Restricted-Plan AXF001 $1,000 .25

31650 Designated-Plan AXF001 $1,200 .5

Year Total Salary Expense

$3,000

$10,200

$7,200


Benefit Rates in HCP for Employees

BenefitCalculation

Basis Employee TypeFY18 Forecast &FY19 Op Budget

CBR Salary Expense

AcademicStaff Limited Students (Graduate and Undergraduate)

40%48%16%

0%

GAEL PayrollExpense All 1.15%


Exercise 3: You Do the Math! Calculate Total Compensation Expense

Dept ID

Salary Account Fund Chart1

Monthly Reg Rate Distr

Year Total Salary CBR GAEL

TotalCompensation

Expense

31650 Academic Restricted-Plan AXF001 $1,000 .25 $3,000 40% 1.15%

31650 Academic Designated-Plan AXF001 $1,200 .50 $7,200 40% 1.15%

Year Total $10,200


Exercise 3: You Do the Math! Calculate Total Compensation Expense

Dept ID

Salary Account Fund Chart1

Monthly Reg Rate Distr

Year Total Salary CBR GAEL

TotalCompensation

Expense

31650 Academic Restricted-Plan AXF001 $1,000 .25 $3,000 40% 1.15%

31650 Academic Designated-Plan AXF001 $1,200 .50 $7,200 40% 1.15%

Year Total $10,200

$4,234.50

$14,300.00

$10,162.00







4. Are there any To Be Hired employees that I need to plan and when are we planning for them to start?






Pooled Positions

DeptID Adjustments


Agenda

6

7

1

2

3

5

4


Pooled Positions

• HCP supports one Pooled Position per DeptID and Earnings Distribution intersection

• Once created Pooled Positions can be managed by adjusting• Average Monthly Pay Rate• FTE• Headcount* (valid for fee remission positions only)

GSI* DeptID

Earnings Distribution

Summer SalaryDeptID


Visiting Prof

DeptIDEarnings

Distribution

Per DiemDeptID


Teacher UNEXDeptID


GSR*DeptID


LecturerDeptID


HCP Pooled Positions allow Planners to budget compensation expenses for fluctuating populations of employees using a single position.

Student Titles(Undergrad)

DeptIDEarnings

Distribution


HCP Pooled Position Types

12 Pooled TypesVisiting Professors

Adjunct Professors

GSR – Resident*

GSR - Non-Resident*GSI*

Reader/Tutor – Student*

Reader/Tutor - Non-student

Student Titles (Undergrad)

Summer Salary

Teacher – UNEXPer Diem

Lecturer

HCM employee data for employees with job codes mapped to these 12 Pooled types are not loaded into HCP during the annual refresh.

• HCP Planners create Pooled Positions using the Pooled Types on the left

• Pooled Positions do not have individual employee detail

• Total FTE, NOT Headcount is used for calculating Total Salary Expense for the position.

• Headcount is only needed for calculating Fee Remission where applicable*

• Lecturer Pooled Position type does not include those employees with Security of Employment. They will appear in your employee list.

Link to Pooled_Position_Job_Code_Mapping Job Aid

https://drive.google.com/file/d/0B0od6H6fYL-AeW9ha1VfTXBreHc/view


What do we need to plan for our Pooled Positions in HCP?

• Average Monthly Reg Salary • Earnings Distribution

• Entity• Salary Account (Job Code)• Fund• CF1

• Distribution %*• Benefits • FTE • Headcount (Fee Remission Eligible Job Codes)

Component Source• Planner Calculation• Planner input

• Planner input must = 1• Calc from Planner selected Salary Account• Planner input• Planner input


HCP Pooled Position Comp Accounts, CBR & Fee Remission FY18 & Planned FY19

HCP Pooled PositionComp

Account* Comp Acct DescCBR/Fringe Account** CBR/ Fringe Acct Desc

CBR RateFY18

Fee Remission

FY18

CBR Rate

FY19^Fee Remission

FY19^Adjunct Professors A50240 Acad Teach-Regular (Default)-Pct A53060 Benefit Assess-Academic Regular 40% 40%GSI A50241 Acad Teach-Exempt from CBR-Pct A530XX_Stat 0 $8,546.00 0 $8,884.00 GSR - Non-Resident A50211 Acad Nonteach-Exempt from CBR (A50211) A530XX_Stat 0 $16,867.00 0 $17,215.00 GSR - Resident A50211 Acad Nonteach-Exempt from CBR-Pct A530XX_Stat 0 $9,316.00 0 $9,664.00 Lecturer A50240 Acad Teach-Regular (Default) (A50240) A53060 Benefit Assess-Academic Regular 40% 40%Per Diem A51231 Staff-Exempt from CBR (A51231) A530XX_Stat 0 0Reader/Tutor - Non-student A50241 Acad Teach-Exempt from CBR (A50241) A530XX_Stat 0 0Reader/Tutor - Student A50241 Acad Teach-Exempt from CBR (A50241) A530XX_Stat 0 $8,546.00 0 $8,884.00 Student Titles (Undergrad) A51231 Staff-Exempt from CBR (A51231) A530XX_Stat 0 0Summer A50212 Acad Nonteach-Limited Benefits (A50212) A53080 Benefit Assess-Limited 16% 16%Teacher - UNEX A50211 Acad Nonteach-Exempt from CBR (A50211) A530XX_Stat 0 0Visiting Professors A50242 Acad Teach-Limited Benefits-Pct A53080 Benefit Assess-Limited 16% 16%

*FY2018-19 Planners are now free to choose which Comp Account they would like for their PP **Mapped to the Comp Account ^ Planned







5. With the conversion to the simplified HCP design, if you have more than one planned Pooled Position type with the same earnings distribution intersection, they were consolidated into one. Planners MUST review the average monthly salary and earnings distribution FTE and edit as needed.






Pooled Positions

DeptID Adjustments


Agenda

6

7

1

2

3

5

4


DeptID Compensation Adjustments

• DeptID Adjustments allow for planning of +/-compensation expenses in HCP to capture material monthly $ amounts not reflected in employee and pooled positions plans

• Examples include stipends, vacancies and budget reductions

• Planned against compensation accounts at the DeptID (L7) vs. employee level

• Not to be used to plan for To Be Hired employees• Monthly $ Amount • Earnings Distribution by

• Entity• Account • Fund

• CF1



6. What are total Compensation Expenses for my unit in FY18: • Forecast Working • Forecast Q2 Planner Submission• Operating Budget Final

7. What are total Compensation Expenses in FY19: • Operating Budget Working (vs. Operating Budget 18)






Converging ProcessesHCM -> HCP

(load of active employee data in HCM as of 2.6.18 )

simplified HCPthis year only

FY18 Forecast copied to

FY19 Operating Budget

Active Employees’ data loaded and extended through FY19.

Monthly pay rate and earnings distribution & % (proxy ~FTE) at the month level now editable.

No Vacant Position information loaded.

No more Vacant Positions

Create To Be Hired employees as needed.

All planned To Be Hired employees in FY18 Forecast Working prior to 2.7.18 were deleted.No planned To Be Hired employees to copy to FY19.

No employee data loaded for the active employees in one of the 12 Pooled types.

Pooled Positions now limited to one type per intersection.If more than one per intersection existed in prior HCP they were consolidated and need Planner review.

Copied consolidated Pooled Positions to FY19 and need Planner review.

No additional compensation information loaded.

Annualized DeptID Adjustment $ in the FY18 Forecast Working prior to 2.6.18 were loaded into the open months of FY18.Closed months actualized with zero.

FY18 DeptID Adjustment $s NOT copied to FY19.

$

Employees

Pooled Employees

To Be Hired

DeptID $ Adjustments

Annual process

Active Employees’ data relevant to FY19 loaded with 3% increase to Monthly Pay Rate.


Thank you!

compensation planning theory · 2020-01-01 · compensation planning theory february 2018 •...

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