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Oracle HCM Cloud: Rates-based Salary Components Introduction

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Hello Community,

I’m back with a new blog. I recently reviewed an “Oracle Fusion Cloud Compensation 24C What’s New” document, and in addition to the new Redwood user experience features, I found something that deserves attention.
It is the introduction of the Rates-Based Salary Basis type. This feature has been in controlled availability for a long time and is now available to all customers.
This fact made me go back to the India CTC structure requirements that I was trying to address with a single component feature, but it did not address 100% of the requirements.

Rates-Based Salary Basis refers to a compensation structure in which an employee’s pay is determined by a predetermined rate, which may be fixed or flexible. Payment is typically tied to measurable units of work, such as hours, days, or tasks completed, rather than a fixed annual or monthly salary. Rates may vary based on factors such as the type of work, performance, or market conditions. This structure is often used for freelance, part-time, or contract positions, allowing for flexibility in compensation based on actual workload or output.
You can check the Oracle document for details.
To familiarize myself with the technical part, I developed a simple PoC to demonstrate some advantages but faced some limitations too.
So let’s start with a PoC:

Here is an example of a salary breakdown structure.

Steps to Configure

  • Create the appropriate payroll elements.
  • Create the appropriate value definitions by criteria.
  • Create the appropriate rate definitions.
  • Create the appropriate salary basis.
  • Associate the rates-based salary bases with the appropriate worker salaries.

    Let’s go through the configuration steps

    1. Create the appropriate payroll elements.

    We need three elements Base Salary, Overall Salary with an input value as an amount, and Longevity allowance with an input value as a factor.

    2. Create the appropriate value definitions by criteria.

    I need to create 2 VDbCs: Locations and Seniority Rates.

    The first one is for location-based allowances. It returns a flat amount. The second one is for deriving seniority rates and it requires more attention.

    In this instance, we have utilized a database item that retrieves the number of years of length of seniority. This feature allows the rate to be calculated dynamically, which is a highly beneficial capability.

    3. Create the appropriate rate definitions.

    I won’t go into much detail about the rates functionality here, as you can read about it yourself. https://docs.oracle.com/en/cloud/saas/human-resources/24c/faucf/overview-of-rate-definitions.html

    Just want to mention one point. I assigned a VDbC here to derive a default value for a rate but it can be overwritten. It’s just for this PoC, but you can choose a different decision.

    4. Create the appropriate salary basis.

    This part seems pretty straightforward.

    5. Associate the rates-based salary bases with the appropriate worker salaries.

    All right, let’s test it out. This short video shows you how it works.

    Conclusion

    The Rates-based salary basis type is a flexible, performance-oriented way to compensate employees based on predefined rates for different tasks, hours worked, or production levels.

    Limitations

    In addition to the limitations outlined in the user guide, I’d like to share some of my own findings.

    • Formula-based Rates are not supported
    • Fast Formula DBI is unable to access transient (in-flight) data that has been proposed in the flows but not yet committed to the database
    • An element should be linked to one rate only, and should not be linked to more than one rate.

    Kind regards,
    Volodymyr

    Oracle HCM Alerts Composer Quick Start

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    Hello community,

    Long time no see. I was very busy with a couple of new projects.

    I’m focusing on the Alerts Composer today. Many people have asked me to create custom notifications for employees, managers, and HR. The best way to do this is with the Alerts Composer.

    Oracle Alerts Composer is a tool that lets users create and manage alerts in the Oracle HCM Cloud. Alerts are triggered by specific business events or system conditions, such as data changes or thresholds met. Alerts can be set up to notify users or take action when certain criteria are met.

    It has these key features:

    • Event Alerts: Alerts are triggered by data changes or system events.
    • Resource Alerts: Resource Alerts use Oracle HCM Cloud REST API resources. You can change how notifications are triggered by defining filters on resource attributes if you have the right access.
    • Customizable conditions: Users can define conditions for when an alert should be triggered.
    • Flexible notifications: Alerts can be sent via email, workflows.
    • Users can set up periodic alerts to run at scheduled intervals.

    Oracle Alerts Composer helps organizations monitor key business processes, automate notifications, and ensure timely responses to critical events.

    Let’s go through a simple scenario: Is it possible to create a notification via Alerts Composer when an employee updates their phone number?

    Here’s how to set up an alert for phone number changes:

    • Create a resource alert with a “workers” resource.
    • Add a filter.
    • Create a schedule. You can play with a Frequency parameter. Set Stop Duplicate Messages to Yes to avoid sending the same notification multiple times.

    This is it.

    You can test your alert in a simulation mode first.

    easy-peasy 🤓

    One thing to keep in mind is that there is one downside that makes it harder to achieve more flexibility. You can’t use custom representative types to send notifications to HR AoRs. Only the following standard types are currently supported: HR Representative, Payroll Representative, and Union Representative.

    Hope this helps.

    Volodymyr