Bonus awards

Bonus awards are integrated with incentive compensation and compensation planning.

You can calculate bonus awards as incentive compensation awards (based on external metrics, for example) or as budgeted awards similar to other compensation planning merit awards.

  • To define bonus awards based on incentive compensation, you define a bonus award pay component in incentive compensation and link it to a planning rule and version in Compensation Planning.

    Note: 

    You can link multiple bonus award pay components to the same planning rule.

    The planning rule must be of type "Bonus" and cannot include any budget calculations.

    Bonus award payouts are calculated according to the pay component rules and tables that you defined and assigned to the employee’s compensation program based on metrics you load; for example, business unit scores.

    When the payouts are calculated and finalized, resource budget records are created.

    When budget calculations are performed on an awarding view that includes a planning rule of type "Bonus" that has no budget calculations defined, the system finds the bonus award pay component (or components) that the planning rule is associated with and uses the total of the finalized payout amounts as the calculated bonus amount.

  • To define bonus awards that do not use incentive compensation, you create a planning rule of type "Bonus" that has no association with any pay component. You define all the rules that govern the planning rule, including the budget calculations.

    When budget calculations are performed on an awarding view that includes a planning rule of type "Bonus", the system processes the bonus planning rule in the same manner as other planning rules, using the defined budget calculations to calculate the budgeted bonus amounts.

In either case, resource budget records are created. Managers can award either the bonus amount or a multiplier of the calculated (budgeted or payout) amount. Multiplier guidelines based on performance ratings can be defined on the planning rule for display to the manager.