Progressive pay plan
A progressive pay plan is a type of pay plan you can use to make changes to employee pay rates. You use progressive pay plans if you want to give raises to employees based on length of service rather than based on merit.
Within a pay plan you define:
-
Which employees are eligible for the plan
-
When employees are eligible for the plan
-
The points at which employees enter and leave the plan
-
The rates employees are paid
When you update the progressive pay plan, the Payroll application creates pending personnel actions for employee pay increases. To update employee pay, you run Action Update (PA100) before you enter time records for each payroll cycle.
Example
Two Rivers Company employs grounds keepers on a part-time basis. These grounds keepers make five dollars an hour for the first 90 days of their employment. After the 90 day probationary period, they increase to eight dollars an hour. For every 90 days employees work, the grounds keepers receive a pay increase of .25 per hour. After five years of service, the grounds keepers move to another pay plan.
Two Rivers Company creates a progressive pay plan for the grounds keepers. The plan creates pending personnel actions that automatically increase their pay rates every time they complete an additional 90 days of service. Two Rivers Company defines the plan so employees are removed after five years of service and placed in a new plan.