Create a Compensation Cycle

Create a compensation cycle by providing cycle essentials.

Prerequisites

• Load employee data. For more information, see Smart Compensation Data Requirements.
• Optional: Configure cycle settings. For more information, see Cycle Settings.

Create a new compensation cycle

1. Click New cycle.

   

2. Provide cycle essentials. For more information, see Provide cycle essentials.
3. Click Create.

Provide cycle essentials

Cycle essentials includes all of the key details necessary to create your cycle.

Step One: Cycle details

Provide key details about the cycle.

• Name: Give the cycle a name. The title of your compensation cycle should be clear and descriptive. This name will appear for managers and their respective managers who will participate in the cycle.
• Pay types: Select any combination of pay types to be included in the compensation cycle.
• Mark as test project: Select this if the cycle is for testing purposes, it won't affect regular compensation activities and reporting. This means that emails and invitations are deactivated, ensuring that it isn't accessible to managers and supporting users.
• Description (Optional): Add a description about the purpose of the compensation cycle. This will be visible to any collaborators you may add to the cycle.
• Pay effective dates: This is the date on which the new pay rates become effective, time worked after this date is paid at the new rate.
• Collaborators (Optional): Share the compensation cycle with other administrators by adding collaborators. Collaborators have the same level of capabilities to start, stop, and move the cycle along. For example, they can edit all tasks in the cycle regardless of submission.

Step Two: Eligibility

Select the eligible employees that will participate in the cycle.

• Snapshot date: This date represents the specific point in time that compensation data is captured for the cycle.

  Tip: Select this date first to shape your organizational hierarchy and determine participant numbers. For example, choosing May 13, 2023, will update the Eligible headcount based on that date’s data, allowing you to adjust eligibility criteria and see the number of employees who can participate.

• Configure eligibility: Choose criteria to determine employee eligibility for the cycle, with options to set different criteria for each pay type.
  • Same for all pay types: Eligibility criteria apply to all pay types, so you only need to set them once.
  • Different for each pay type: Eligibility criteria can vary by pay type, so you'll set them individually for each type.

You can configure the following eligibility criteria:

• Locations: Select the locations to include within the employee population. For example, United States.
• Organization hierarchy: Select the departments to include within the employee population. For example, HR.
• Limit cycle to specific employees: Limit the compensation cycle to a specific group of employees. For example, full-time employees.

  Note: Limitations on particular sets of employees can be configured during onboarding. If you want to adjust limitations, contact Visier Technical Support.

• Include employees who started on or before: Choose a date to include employees who started on or before it. This date must be on or before the snapshot date and defaults to the snapshot date.

Step Three: Budget

Provide the details of your budget.

• Currency: Select a currency to calculate and manage all task budgets in the compensation cycle. Employee data will be displayed in their own local currencies in a task. You can also view the currency conversion rates by clicking View currency conversion rates. If these need to be updated, you can upload a new data file.
• Budgeting method: Select a method to determine how manager budgets are calculated.
  • Uniform: Each manager’s budget is determined independently of the pay philosophy recommendations. Budgets are calculated on the employee’s base pay, which can diverge from the pay philosophy recommendations. Therefore, managers can have recommendations that put them over or under budget. For example, let's say a manager has two employees on their team. Employee A's base pay is $50K and Employee B's is $100K. If the merit increase is 10%, the budget would be $15K.
  • Flexible: Each manager’s budget is calculated according to the pay philosophy recommendations. Budgets may vary based on factors such as performance evaluation, so a team with many high performers may consume a larger portion of the total budget.

Step Four: Base pay

Set a budget and define a holdback for base pay.

• Total budget: Select the base pay budget, which is a percentage of your total spend on employee base pay.
• Holdback amount: Choose a percentage of the base pay budget to withhold from manager allocations. It will be available to apply later on in situations where there’s an overrun of the budget.

Step Five: Bonus

Set the bonus period and define a holdback for bonuses.

• Bonus period: Set the bonus period to adjust the budget from annual to your organization's specific bonus frequency. This defines the frequency and start date, and adjusts the budget accordingly.

• Create bonus period: Create bonus periods for different plans to configure them separately for various populations. The recommendation calculator adjusts based on these periods, such as giving semi-annual employees half their annual target. To do this, click Create bonus period.

  

• Modify the budget based on Start Date (Optional): Turn this toggle on to adjust the bonus budget for employees who started after the bonus cycle start date. For instance, if 47 employees joined after the cycle began, their bonus targets and the total budget will be reduced based on their time in the role.
• Modify the budget based on FTE Factor (Optional): Turn this toggle on if you want to modify the bonus budget to account for full-time equivalents.
• Include company performance (Optional): Turn this toggle on if you want to modify the bonus budget based on how successful your company performance was in the selected year. For example, if you estimate that your company will achieve 95% of its target by the end of the year, the budget will be reduced by the remaining 5% that was not achieved.

• Holdback amount (Optional): Choose a percentage of the bonus budget to withhold from manager allocations by understating your company performance. It will be available to apply later on in situations where there’s an overrun of the budget.

Step Six: Long-term incentives

Set the price per share and define a holdback for long-term incentives (LTI).

• Set price per share: Define a price per share to calculate an employee's LTI value allocation as a number of shares.
• Define the LTI period: Set the LTI period to adjust the budget from annual to your organization's specific LTI frequency. This defines the frequency and start date, and adjusts the budget accordingly.

• Modify the budget based on Start Date (Optional): Turn this toggle on to adjust the LTI budget for employees who started after the LTI cycle start date. For instance, if 47 employees joined after the cycle began, their LTI targets and the total budget will be reduced based on their time in the role.
• Include company performance (Optional): Turn this toggle on if you want to modify the LTI budget based on how successful your company performance was in the selected year. For example, if you estimate that your company will achieve 95% of its target by the end of the year, the budget will be reduced by the remaining 5% that was not achieved.

• Holdback amount (Optional): Choose a percentage of the LTI budget to withhold from manager allocations by understating your company performance. It will be available to apply later on in situations where there’s an overrun of the budget.