Skip to main content
Documentation
Documentation
Administrator Guide
Last Updated: 2024-05-03
FAQ: Manage Basis Total (MBT)

FAQ: Manage Basis Total (MBT)

What is Manage by Basis Total (MBT)?
Managing employees by a compensation basis total (MBT) simplifies the management of diverse, interrelated compensation components common for companies that operate globally. MBT is a method to manage total cash compensation through 1 overall value rather than multiple values at the plan level. Example: During a compensation transaction, you update the employee MBT value and Workday allocates the changed value to all the compensation plans that comprise the compensation basis.
What's the difference between MBT and non-MBT compensation?
It's an entirely different method of managing compensation. Whether to use MBT is as important a decision as selecting a staffing model. While MBT enables you to update 1 value, non-MBT compensation requires that you individually update the value of every compensation plan that makes up the compensation basis.
MBT
Update 1 value. Workday allocates the change from the top down to all compensation plans that comprise the basis.
Non-MBT Compensation
Update the value of the compensation plans that comprise the basis from the bottom up.
Why should I use MBT?
It’s much easier to manage a single value than to manage a diverse and complicated set of compensation components and their interdependencies. This is especially true for multinational corporations with multiple compensation components and dependencies on country-specific regulations, employment agreements or union contracts, and company policies.
Implementing MBT:
  • Enables you to enter a single total compensation amount.
  • Configures Workday to allocate the total among the compensation plans that comprise the basis.
  • Enables managers to use a single point of entry to manage complex compensation events.
  • Workday persists an assignment amount and currency for every plan type for each assignment. A compensation event must take place to update the assigned amounts.
Why should I use non-MBT compensation instead of MBT?
We don't recommend using MBT if you have employees with fixed compensation components or have assigned compensation plans that must be managed directly.
With non-MBT compensation:
  • You must enter amounts for each individual compensation plan that comprise the basis, or let Workday automatically populate values based on the plan configuration.
  • You must understand the details and the dependencies of complex compensation configurations.
  • Workday calculates individual assignment amounts dynamically every time you view or report on an employee's compensation, based on the current state of compensation.
How difficult is it to switch from MBT back to non-MBT compensation?
You must run a
Mass Operation Management
 task that converts stored data for workers that have a Primary Compensation Basis (PCB) with MBT. However, after the conversion, workers may have different total compensation amounts due to the difference in how Workday calculates amount-based and percent-based compensation plans. Workday recommends that you carefully analyze when deciding to switch back to non-MBT compensation from MBT.
How does Workday calculate MBT?
Rather than updating several individual plans, MBT enables you to update a single value. Workday then allocates the total across the individual plans, using this this sequential calculation:
Group
Description
1
Fixed amount plans.
2
Percentage plans, based on the PCB.
3
Percentage plans based on Groups 1 and 2, and any of their dependent plans.
4
Salary plans.
5
Percentage plans based on Groups 1 through 4, and any plans dependent upon the salary plans.
6
Remainder plans, which include amount plans that allow individual overrides.
The resulting changes to individual compensation amounts comprise a single compensation event.
During a compensation review process, you can change an employee's total compensation by changing their PCB. Workday automatically allocates that amount to the compensation plans that make up the PCB, provided it:
  • Has the
    Manage Basis Total
     section completed.
  • Is associated with the employee's compensation package.
  • Is the PCB for the employee. Example:
    • You have CompBasis A with a ranking of 1, CompBasis B with a ranking of 2, and CompBasis C with a ranking of 3.
    • Based on the eligibility rules associated with each compensation basis, an employee qualifies for CompBasis B and CompBasis C.
    • Because the ranking for CompBasis B is higher than CompBasis C, the employee's PCB is CompBasis B.
What happens when a grade step changes for an MBT worker?
For employees with grade steps managed by a compensation basis total, Workday treats salary plans differently depending on whether they allow overrides. When a grade step changes:
  • If the
    Allow Override
     option isn't selected on the salary plan step, Workday treats the salary increase associated with a step change as a fixed amount and doesn't alter it.
  • If the salary plan does allow overrides, Workday allocates the plan as necessary.
In both cases, Workday performs a partial calculation for any plans that depend on the salary plan and adjusts the PCB.
When does Workday calculate MBT?
Workday runs the MBT calculation during these business processes, even when used as a step in another process:
  • Propose Compensation Hire
  • Propose Compensation Offer/Employee Agreement
  • Propose Compensation Change
  • Request Compensation Change
  • Request Compensation Change for Leave of Absence
  • Initiate Compensation Review Process
How does Workday calculate non-MBT compensation?
You update individual plans and Workday sums the change into the compensation basis. However, each update to individual plans may require managers to understand minute details and dependencies to determine compensation plan allocations.
What is a partial calculation and when is it used?
Workday performs partial calculations in cases where you update an individual compensation component during a business process such as
Change Job
. Workday then recalculates plans in the same sequence as a normal MBT calculation but begins at the step associated with the updated component, and skips previous steps.
Example: The compensation administrator updates the salary plan amount assigned during a
Change Job
 business process. With this change in salary plan, Workday performs a partial calculation beginning with the salary plan and continuing downward.
Can I use MBT if I must provide a guaranteed amount?
Yes. You can configure a calculation compensation basis and select Guaranteed Basis for the type. A guaranteed basis consists of plans, the sum of which is guaranteed for the worker. Workday can only decrease the guaranteed amount when the worker's PCB amount decreases. See: Create Calculation Compensation Basis and Manage by Basis Total - Advanced.
Does Workday persist updated compensation basis values when using MBT?
Yes. With MBT, Workday persists an assignment amount, currency, and frequency for every plan type for each assignment. A compensation event must take place to update the assigned amounts.
For non-MBT compensation, Workday doesn’t store plan assignment amounts for certain plan types at the assignment level. Workday recalculates these amounts dynamically each time they display, taking into account the current state of compensation data. Workday also calculates percent-based plans differently and this often results in very different assignment amounts compared to MBT.
If I use MBT, does it apply to all workers?
No. An MBT worker must:
  • Meet the conditions of the eligibility rule associated with the MBT compensation basis.
  • Be eligible a PCB compensation basis that has:
    • An associated eligibility rule the worker qualifies for.
    • The
      Manage Basis Total
       option selected.
    • Compensation included in the
      Functional Areas
       field.
    • The
      Use to View Compensation
       option selected.
    • The
      Ranking
       must be set to 1.
What are some best practices for implementing MBT?
Workday recommends that you follow these best practices when configuring a compensation basis with MBT:
  • Use the same frequency and currency for all pay components. Doing so ensures consistency when Workday recalculates individual pay assignments based on the PCB.
  • Add MBT to the name of any compensation basis you create with the
    Manage Basis Total
     option selected. Consider doing the same if you use eligibility rules specifically for MBT.