Set Up a Compensation Cycle

Finalize the set up of your compensation cycle, including defining your pay philosophy and assigning tasks to managers.

Prerequisites

Before you can set up your compensation cycle, you must Create a Compensation Cycle.

Overview

After you've created your new compensation cycle, you'll be in the Setup stage. This is where you'll finalize all the details and prepare the cycle before launching it to managers. Here’s a breakdown of what you can do:

Review and edit cycle details

The first step is to review the core details you just entered. You can go back and edit the cycle's name, description, and key dates. This is also where you'll find the eligibility and budget settings you configured.

This is also the first time you can set up pay letters. These are the communications that will be sent to employees to inform them of their final pay changes. You can customize the look and content of these letters here. For more information, see Configure Pay Letters.

Review cycle data

Next, it's crucial to check your data. Smart Compensation will show you a summary of the employee data that's been loaded into the system. You should confirm that all the necessary data—like employee information, job titles, and pay bands—is correct and up to date. If you're missing any required data, you'll need to upload it before you can move on.

Set your cycle timeline

Once your data is ready, you can create a timeline for your cycle. This sets the key dates for each stage, such as when managers can begin their tasks and when approvals are due. A clear timeline helps keep everyone on track and ensures the cycle is completed on time.

Configure your pay philosophy

This is where you bring your company's pay strategy to life. The pay philosophy you set up here will guide the recommendations for pay increases. You'll define the rules for merit matrices, promotions, and other adjustments. This is a critical step that ensures the cycle's recommendations align with your business goals. For more information, see Set a Pay Philosophy.

Assign compensation tasks

Finally, you'll assign tasks to your managers. This makes the compensation tasks visible in their dashboards and kicks off the process. You can choose to assign tasks based on your organization's hierarchy, ensuring each manager can see and act on the compensation data for their direct reports. Once tasks are assigned, you're ready to launch the cycle. For more information, see Assign Compensation Tasks.