Introduction to Compensation

Introduction

Compensation in PerformYard lets you run a merit cycle without spreadsheets. You set a budget, managers propose increases for the people on their teams, and cycle owners and admins approve those proposals. Because your performance data is already in PerformYard, managers can pull up an employee's review history while they are making the decision.

You will work with Compensation in two places:

  • Compensation, in your navigation menu, is where the work happens. You create cycles here, managers make their decisions here, and cycle owners and admins approve here.
  • Company Settings > Compensation, under the Administration section of your navigation menu, is where you get ready. It tells you whether your employee data is complete enough to run a cycle, and it is where you assign your cycle owners.

How a compensation cycle works

A compensation cycle is a single round of pay decisions covering a set of employees over a defined window. Most organizations run one a year.

Within a cycle, each manager gets a team budget, which is the pool of money available for the employees reporting to them. Managers enter their proposed increases on the My Decisions page, and their work rolls up as a single team budget that gets submitted and approved together rather than employee by employee.

Every team budget moves through three statuses:

  • Not Submitted: the manager has not yet submitted their decisions. Increase and new salary columns show a dash for these rows.
  • Submitted: the manager has finished and handed their decisions off for review. They can no longer edit them.
  • Approved: a cycle owner or an admin has approved the team budget.

The cycle itself has its own status, separate from the team budgets inside it. A cycle is Scheduled before its start date, In Progress once it opens, Overdue once it passes its due date with work outstanding, and Completed once you close it.

Approval is always something someone does deliberately. Closing a cycle locks it, but it does not approve anything that was left unapproved. Anything sitting in Submitted stays in Submitted.

What compensation does with salary

This is the most important thing to understand before you run your first cycle.

PerformYard records the compensation decision. It does not change anyone's pay. Closing a cycle or approving a team's compensation decisions does not change the employee's salary data within PerformYard.

This lack of action on your employee's salaries is deliberate. PerformYard is not a payroll system, and your own processes for implementing pay increases stay in charge of the outcome. PerformYard's job is to produce a clean, approved set of decisions that you export and hand to your HRIS or payroll system. Once that system has implemented the increases, it sends the updated salaries back to PerformYard through your existing HRIS connection or SFTP import, and the Salary field on each employee record updates from there.

So the full round trip looks like this:

  1. You populate salary data in PerformYard, usually from your HRIS
  2. Managers propose increases and submit them
  3. Cycle owners and admins approve
  4. You close the cycle and export the results
  5. Your HRIS or payroll system implements the increases
  6. Your HRIS sends the updated salaries back to PerformYard

If you do not have a connected HRIS, PerformYard can also take part in this round trip using your existing SFTP setup or even a CSV import to update employee data in bulk.

Getting ready: Company Settings > Compensation

Use this page to confirm your employee data is complete enough to run a cycle.

It shows a count of employees missing a salary, plus two lists:

  • Employees without salary data. A cycle cannot calculate an increase for someone with no current salary.
  • Employees without an assigned manager. Manager assignment determines who gets a team budget, so an employee with no manager has nobody to make their decision.

Work through both lists before you create a cycle.

This page is also where you assign and remove cycle owners.

Who can do what

  • Billing Admins and Admins: full access. Create and edit cycles, approve team budgets, close and reopen cycles, delete cycles, and export results. Deleting a cycle is limited to Billing Admins and Admins.
  • Cycle Owners: designated in compensation settings for governance and sign-off. Cycle owners see the whole cycle, including team budgets across the organization, and can approve them. This is the role for a CFO or a Head of HR who needs visibility into the full picture of Compensation without full access to employee reviews, goals, and other aspects of their Performance not normally granted to employees outside of the HR team. A cycle owner must also be a Basic Admin. Cycle owners cannot delete cycles.
  • Managers and acting managers: see and complete decisions for their own team only. They have no access to a cycle before it starts, and no access to My Decisions once the cycle is closed.
  • Everyone else: no access to compensation. Employees do not see cycles, budgets, or decisions about themselves.

An acting manager is someone you assign to complete decisions for a team when the regular manager cannot, or when a group of employees has no manager assigned.