Create Merit Plans

Set up compensation components and grades.

Security: Set Up: Merit and Bonus
domain in the Advanced Compensation functional area.

Access the

Create Merit Plan

task.

In the

Award Calculation

section, consider:

オプション	説明
Manage Basis Total	Select if you want to apply merit increases to the total Primary Compensation Basis (PCB) for an employee, instead of to total base pay. During a compensation review process, Workday automatically allocates amounts to the individual plans that make up the employee's PCB.
Allow Target Override	This makes the Individual Target field available for entry on the Request Compensation Change task and in compensation assignments for staffing events that include this plan.
Hide Target from Security Groups	Select 1 or more security groups from which to hide funded plan targets. Workday hides the funded plan target beginning on the effective date of the plan. Reports that display plan assignments hide plan targets only when the plan is in effect. Workday doesn't hide funded plan targets during the Initiate Compensation Review Process or during the Offer or Employment Agreement business processes in the Task Consolidation context.
Target %	Enter the recommended increase percentage. You can enter up to 4 decimal places. Available for percentage-based plans only. Required for all merit plans that use a compensation matrix or multiple targets. Workday uses this value if it can find no other target increase percent for the employee. This can happen when employees: Have no individual target. Aren't eligible for any of the multiple plan profile targets. Are eligible for multiple plan profile targets. Have no target pulled from a compensation matrix. You can use a Target % for single-target merit plans. Doing so gives you the option to create a merit plan without using it to budget for merit increases. Always run the Employees without Unique Targets audit report before launching the compensation review process to identify the employees without a unique target.
Target Amount	Available for amount-based plans only. Enter the recommended positive or negative amount with up to 4 decimal places. Use the Target Amount to assign employees identical merit increases (or decreases). You can select amount-based merit plans when creating a compensation matrix.
Reference Currency	This enables you to manage a merit plan in a single currency, but still accommodate employees who use a variety of currencies.
Reference Frequency	Workday uses this frequency to calculate the actual cost of the award, plus or minus any currency fluctuations.
Subject to Statutory Minimum	Applies to percentage-based plans only. Select to indicate that the plan is subject to statutory increases. If selected as of the Process Period End Date , Workday lists plans subject to a statutory minimum when you initiate a compensation review process. Workday uses the statutory minimum percentage you enter to calculate the merit pool if greater than the merit plan target percentage.
Compensation Matrix	Select to base merit increases on factors such as employee's performance reviews and potential ratings.
Use as Reference Only	Available if you select a compensation matrix. Select if you don't want Workday to calculate the individual target or pool amount using the selected compensation matrix. Workday displays only the percentage when proposing the employee award.
Time Proration Rule	Select a rule to prorate employees' target compensation in a compensation event for this plan according to time-based criteria such as leave of absence or time since hire.

(Optional) In the

Plan Eligibility

section, select a

Waiting Period

You can also access the

Create Eligibility Waiting Period

task.

A waiting period restricts eligibility until after the employee satisfies the waiting period criteria. By using a waiting period, you can assign the plan at any time and rely on the waiting period to control eligibility.

If the waiting period is still in effect as of the

Process Period End Date

configured on the compensation review process, Workday:

Includes the employee as an exception.

Sets the suggested target percent (and prorated target increase percent, if applicable) to zero.

The pool doesn't reflect the employee target and managers can override the zero target value.

In the

Process Eligibility

section, consider:

オプション	説明
Include Active Employees Assigned Plan During Process Period	If selected, employees assigned to the plan during the process period, but not currently assigned to the plan, are eligible for an award.
Include Active Employees in Waiting Period	Select if you want to include employees assigned to the plan but are in a waiting period included in a compensation review process. Workday doesn't calculate the employee target amounts, which display as zero.

In the

Merit Plan Profiles

section, enter a

Target %

and select an

Eligibility Rule

This enables you to create a single budget for what are effectively multiple plans.

You can set up 1 profile with a target for individual contributors at 3 percent and a target for directors at 6 percent.

When the merit plan has multiple targets (plan profiles), Workday calculates the merit pool based on the appropriate target for each employee. Workday uses the

Eligibility Rule

on the plan profiles. The appropriate target percentage displays on the employee compensation. If Workday doesn't find a unique target using eligibility rules, it uses the target percentage from the plan defaults.

When the compensation review process generates the merit pool, it accounts for the rules, profiles, and other settings in the plan. This enables you to make sound budgeting decisions. The combined use of a compensation matrix and a performance management review type enables you to pay employees for performance based on completed review results.

You can:

Assign (roll out) the plan to employees on the

Rollout Compensation Plans to Employees

task.

Add the plan to a compensation package on the

Create Compensation Package

task.

Access the

Merit Plan

and

Merit Plans

reports.

Access the

Edit Merit Plan

task.

Hide the compensation plan type from specified groups of workers using the Worker Data: Compensation Plan Type
domain in the Core Compensation functional area.