Configure Compensation Guidelines

Before You Begin: If you’re configuring guidelines based on compa-ratio or range penetration, you must ensure that pay grade and salary range configuration is completed in the Pay Grades tab of Org Setup > Jobs and Job Assignments.

Role feature access: Compensation Setup > Guidelines

Compensation guidelines help managers determine the correct amount to reward employees based on specific criteria. Guidelines ensure that all employees are compensated fairly and consistently, according to configuration. You can define compensation guidelines for the following reward types:

• Salary Increase
• Bonus
• Equity

Flat amount guidelines can’t be used for bonus factors in compensation plans. If you plan to configure compensation plans for the compensation cycle, don't select the Amount option in the Guideline Type drop-down list when you create a bonus guideline.

To add a compensation guideline:

1. Go to Compensation Setup > Guidelines.
2. Click Add and select one of the following options:
   • Salary increase guideline: Defines guidelines for the salary increase reward type.
   • Bonus guideline: Defines guidelines for the bonus reward type.
   • Equity guideline: Defines guidelines for the equity reward type.
   • When you select an option, the guideline is added in the left-side panel with the reward type.
3. In the General section:
   • Name: Enter a name for the new guideline. Click outside of the field and Dayforce updates the name in the left-side panel.
   • Description: (Optional) Enter a description for the guideline.
   • Reward Type: The reward type shows by default.
   • Effective From: Click the calendar icon and select a date to define when the guideline will be available for compensation cycles.
   • Effective To: (Optional) Click the calendar icon and select a date to define when the guideline will no longer be available for compensation cycles.
   • Value Type: Select an option in the drop-down list to define guideline values as a range or as a single value.
   • Guideline Type: Select an option in the drop-down list to define guideline values as a percentage or as a flat amount. This field shows Percent by default.
     • If you select Amount for the Salary increase guideline, the following additional fields show:
       • Currency: This field is disabled, and the employee's local currency is used for the guideline.
       • Guideline Amount Type: Select an option in the drop-down list to define guideline amounts based on the annual salary or hourly rates.
       • Annual Hours: Define the annual hours that will be used to convert the defined guidelines amounts for salaried or hourly employees. For example, if you select Annual Salary in the Guideline Amount Type field, the guideline amounts that you enter in the Guideline Matrix section will be based on annual salary. If you have hourly employees in your organization, the defined salary guidelines are converted to an hourly rate guideline using the Annual Hours value. By default, Dayforce populates the Pay Grade - Annualized Hour value in this field if configured in the General section of the Properties tab in System Admin > Client Properties.
     • If you select Amount for the Bonus guideline, the following field shows:
       • Currency: This field is disabled, and the employee's local currency is used for the guideline.
     • If you select Amount for the Equity guideline, the following field shows:
       • Currency: Select the currency for the guideline in the drop-down list. This list shows system default currencies and exchange rates defined in System Admin > Exchange Rates.
4. In the Criteria section, define one or more criteria for which you can enter guideline values after generating the guideline matrix:
   1. Click Add in the Criteria section.
   2. Select an option in the Criteria 1 drop-down list. You can define one or more criteria for the guideline. After you select an option, it isn’t available in the list for selection when you add new criteria. This feature ensures that each option is added only once for the guideline. The options in the drop-down list are as follows:
      • Performance Rating: Select this option to configure the guideline values based on the employee’s performance rating. If you select this option, select the rating scale that is used for the performance rating. Rating scales are configured in the Rating Scale feature.
      • Compa Ratio: Select this option to configure the guideline values based on the employee’s compa-ratio value. When you select this option, the Range Penetration option doesn’t show for selection when you add new criteria.
      • Range Penetration: Select this option to configure the guideline values based on the employee’s salary range penetration. When you select this option, the Compa Ratio option doesn’t show for selection when you add new criteria.
      • Pay Group: Select this option to configure the guideline values based on the employee’s pay group.
      • Pay Grade: Select this option to configure the guideline values based on the employee’s pay grade.
      • If you select a combination of two criteria, for example, Performance Rating and Compa Ratio, you can configure guideline values based on both the employee’s performance rating and their compa-ratio value.
5. In the Guideline Matrix section, click Generate and define the guidelines values. See Configure the Guideline Matrix.
6. Enter a custom message in the Hard Stop Message field. This message shows as an error message to managers when they reward employees outside the defined guidelines and the guideline values were configured as No Override.
7. Enter a custom message in the Soft Stop Message field. This message shows as a warning message to managers when they reward employees outside the defined guidelines and the guideline values were configured as With Justification.
8. Click Save. A green icon shows next to the guideline in the left-side panel.

The guideline becomes available in the following areas of Dayforce only after you save the guideline and the green icon shows:

• In Compensation Setup > Compensation Plans when you configure effective date records.
• In the Pay Components tab of Compensation Setup > Compensation Cycles when you configure compensation cycles.

You can edit the following fields if a guideline is in use:

• Name
• Description
• Effective To (to the current or future date)
• Override settings
• Hard Stop Message
• Soft Stop Message

You can delete a guideline by selecting the name in the side-panel and clicking Delete in the toolstrip.

Note: You can’t delete a guideline that is already being used in a compensation cycle.