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Administrator Guide
Last Updated: 2025-03-14
Setup Considerations: Compensation Eligibility Rules

Setup Considerations: Compensation Eligibility Rules

You can use this topic to help make decisions when planning your configuration and use of compensation eligibility rules. It explains:
  • Why to set them up.
  • How they fit into the rest of Workday.
  • Downstream impacts and cross-product interactions.
  • Security requirements and business process configurations.
  • Questions and limitations to consider before implementation.
Refer to detailed task instructions for full configuration details.

What It Is

Eligibility rules define dynamic lists that group employees based on their attributes, such as location, management level, position, or job profile. Worker attributes change as they progress through their career and receive promotions, transfer departments, or change locations. You create eligibility rules with attributes and condition rules and logical relations between them.
Example: Sam works in the Portland office and is eligible for an allowance plan based on an eligibility rule that uses the Portland location. Sam then transfers to Amsterdam. The Portland-based eligibility rule no longer applies, but eligibility rules based on the Amsterdam location that do.

Business Benefits

Eligibility rules:
  • Save time and increase consistency by automatically populating compensation values in business processes like
    Offer
    ,
    Hire
    , and in compensation reviews.
  • Eliminate time-consuming and error-prone manual maintenance of static employee lists. Static lists are often based on employee attributes, so targeting the attributes is more direct and flexible.
  • Make it easier to meet regulatory or business requirements.

Use Cases

  • Roll out (assign) or remove compensation plans to employee populations. Example: Roll out the same compensation plan to all nonmanagement employees, except employees in selected departments.
  • Assign salary plans based on management level, location, or both.
  • Propose compensation during the
    Offer
    ,
    Employment Agreement
    , and other business processes.
  • Assign severance plans based on number of years of service.
  • Define the compensation plans or plan profiles that apply to job requisitions.

Questions to Consider

Question
Considerations
Do you configure default compensation on positions?
Workday uses default compensation, if configured on the position, to populate compensation values in business processes such as
Hire
. If you don't configure default compensation on positions, Workday uses eligibility rules.
You can assign compensation components (plans, grades, and packages) to eligibility rules on the
Assign Compensation Components to Rule
 task. Doing so enables Workday to populate compensation values during business processes under certain conditions.
Example: During the
Hire
 process, Workday searches for compensation values from previous employment,
Offer
, the job requisition, and the position. If unsuccessful, Workday derives compensation values from the eligibility rules associated with compensation components.
What criteria do you use to assign compensation plans to employees?
Design your eligibility rules around these criteria.
You can then roll out (assign) plans to specified populations.
What employee populations do you target for periodic merit, bonus, and stock awards?
Compensation reviews require that you specify merit, bonus, or stock plans. Workday includes employees assigned to those plans in the compensation review process and doesn't use eligibility rules directly.
When configuring compensation eligibility rules, consider your periodic compensation reviews and their target populations.
Do you assign grade profiles manually?
You can create eligibility rules for grade profiles and compensation plan profiles to ensure automatic and accurate updates on positions and employees.
How should Workday assign eligibility rules to compensation plan profiles?
You can access the
Edit Tenant Setup - HCM
 task and in the Compensation section, select the
Enable Eligibility Rule Performance Enhancement for Compensation Plan Profiles
 option.
  • If selected, Workday stops evaluating compensation plan profiles when it finds the first profile the employee is eligible for. If an employee isn't eligible for any plan profiles, Workday uses the default plan target.
    Selecting this option is permanent. You can't clear or undo your selection after you submit.
  • If not selected, Workday evaluates all plan profiles. If an employee is eligible for only 1 plan profile, Workday uses it. If an employee isn't eligible for any plan profiles or is eligible for more than 1, Workday uses the default plan target.
Workday recommends that you plan and create eligibility rules to be mutually exclusive and don't target overlapping populations of employees.
How do you want Workday to handle eligibility rules based on Guidelines fields when you change a Guidelines field manually?
You can configure Workday to apply compensation defaulting to compensation plan assignments on the business processes when you both:
  • Base eligibility rules on Guidelines fields.
  • Change any field in the Guidelines section that the eligibility rules are based on.
Access the
Edit Tenant Setup - HCM
 task and, in the
Compensation
 section, configure the
Enable Defaulting Based on Changes to Guidelines
 option for relevant business processes. See Reference: Edit Tenant Setup - HCM.

Recommendations

Workday recommends that you design, create, and maintain eligibility rules like a software development project:
Recommendation
Description
Organize and Plan
  • Build a team to design, plan, and manage the development, deployment, and use of your eligibility rules.
  • Develop procedures for creating, testing, approving, and managing eligibility rules.
  • Document your work. Doing so makes it easier to identify problems if they arise and also helps Workday Support to diagnose issues.
Design
  • Develop a list of the employee groups based on your needs. Example: Assess your needs for assigning compensation plans, packages, and components.
  • Compile the list of attributes that you need for configuring eligibility rules, such as location or management level.
  • As a best practice, build mutually exclusive eligibility rules that don't overlap each other. Too many eligibility rules might make maintenance difficult and affect performance.
  • Ensure that your rules are exhaustive so that all employees fall into at least 1 eligibility rule.
Develop
  • Create enough eligibility rules to meet your needs, but not so many that managing them is burdensome or performance suffers. When you run eligibility rules for business processes like
    Hire
    , the more rules, the more processing time.
  • Use Workday-delivered fields.
  • Name eligibility rules so that the intended target population is evident.  Example: Create an eligibility rule with MBT in the name specifically for use as part of a compensation basis with the
    Manage Basis Total
     check box selected. Or, add Amsterdam for a location-based eligibility rule used for employees located there.
Test
  • Test each eligibility rule upon initial creation and whenever you change them.
  • If you discover issues with eligibility rules, record the exact conditions under which they occur. Update your documentation and testing procedures accordingly.
Iterate
When your needs change along with changes to your operations, return to the organization and planning phase to determine how eligibility rules can address your needs.
Even the best testing procedures can sometimes miss issues that only occur with a specific configuration. When issues arise during production operations, determine if the issue resulted from design or implementation. Update your testing procedures accordingly.

Requirements

Workday requires compensation eligibility rules for compensation defaulting and to ensure that employees get assigned the appropriate compensation components.

Limitations

No impacts.

Tenant Setup

No impacts.

Security

Set Up: Compensation Rule
 domain in the Core Compensation functional area.

Business Processes

No impacts.

Reporting

Access the
Compensation Eligibility Rules
 report to list the conditions, compensation components, and job profiles for selected eligibility rules.

Integrations

No impacts.

Connections and Touchpoints

Compensation eligibility rules interact with Workday Recruiting.
Features
Considerations
Positions and job requisitions.
If you've configured default compensation on positions, Workday populates compensation values from the position. Otherwise, Workday uses eligibility rules.
Design eligibility rules to fill in for positions or job requisitions where there's no default compensation.
Workday Recruiting.
Workday derives compensation values on the
Offer
 or
Employment Agreement
 from the job requisition. However, if Workday can't find compensation values, it uses eligibility rules.
Workday offers a Touchpoints Kit with resources to help you understand configuration relationships in your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.