Workday Advanced Compensation Interview Question & Answers

Hi guys! Here are the Interview Questions & Answers for Workday Advanced Compensation Module.

1. What is Advanced Compensation in Workday?

Answer: – Compensation or Advanced compensation cycle is the review event in Workday, launched for a certain length of time to review, recommend, as well as award compensation changes, stock grants, and bonus payments. Most organizations refer to these activities as their compensation cycle.

2. What are the business benefits of advanced compensation?

Answer: –

• Save time and increase consistency by automatically populating compensation values in business processes like Offer, Hire, and compensation reviews.
• Eliminate time-consuming and error-prone manual maintenance static worker lists. Static lists are often based on worker attributes, so programmatically targeting the attributes is more direct and flexible.
• Make it easier to meet regulatory or business requirements.

3. What is the difference between default compensation and compensation defaulting?

Answer: – Default compensation refers to the compensation attributes configured on a position. Workday automatically populates fields when filling a position or a job from default compensation if it’s configured on the position.

Compensation defaulting simply refers to how Workday populates compensation values.

4. Why doesn’t Workday default compensation in the Request Compensation Change task?

Answer: – The Request Compensation Change task is for:

• Proposing a change to existing compensation for an employee, not to initially determine it.
• A single-purpose compensation change.

Workday doesn’t run eligibility rules at initiation to populate plans in the Proposed column of the transaction. You can view the eligible plans when proposing compensation using the By Compensation Package and Rule or By Compensation Rule options.

5. What is the compensation matrix?

Answer: – A compensation matrix is a table that helps you determine merit increases, bonus targets, or stock grants for employees. You can build a matrix with:

• Rating scales.
• Potential rating.
• Compa-ratio.
• Retention ratings.
• Pay range segments.

6. What are the business benefits of compensation review?

Answer: – The compensation review process enables you to:

• Schedule important compensation milestones.
• Configure the organization type and roles with authority to create, edit, or review awards.
• Process staffing changes while compensation reviews are in progress.
• Manage budgets.
• Include merit, bonus, or stock plans.
• Select the organizations to include.
• Select the eligibility rules for target employee populations
• Identify those responsible for planning, approving, and reviewing awards.

7. What period do you consider when prorating awards?

Answer: – Workday uses the process period end date to determine:

• Eligible employees based on their plan assignments.
• The proration calculations and performance ratings were used.

8. Explain Search reports in Workday compensation?

Answer: – When you access a compensation review as either a participant or a reviewer, Workday enables access to the grid from these reports:

• Compensation Review Search Employees (Default): Participant (within the Organization Summary).
• Compensation Review Organization Search Report (Default): Enables access to the grid configuration for the Reviewer.

You can also access the grid from custom reports.

9. Explain the concept of compensation Reviews?

Answer: – Compensation reviews set up with approval limited to the entire hierarchy are a collaboration between process participants. Planners can complete the process for a subordinate organization on behalf of its participant or send the process back for correction.

The Compensation Administrator or HR Partner can also review organizations and awards as a planner. The inbox notification completes only after all organizations submit up to the Compensation Planner level and the Planner submits.

10. What date does Workday use as the merit year in order to calculate proration?

Answer: – To calculate the proration, Workday uses Process Period End Date specified when you initiate the process and goes back exactly one year.

11. How is the merit pool calculated?

Answer: – Workday calculates a merit pool using the compensation basis and merit targets of employees in the same organization and merit plan.

Compensation Basis of Employees in Org, & Plan * Merit Plan Targets of Employee in Plan = Merit Pool.

12. How does Workday handle remainder amounts?

Answer: – Workday stores pool contributions at the individual employee level and calculates pools once at process initiation to determine pools at the organization level. Workday stores remainder amounts at the organization level.

For example, an organization has a 10,000 USD pool divided among three employees, each receiving 3,333.33 USD—workday stores the remaining 0.01 USD at the organization level.

13. How do you manage a compensation survey covering multiple countries or locations with different survey results?

Answer: – You can set it up as one survey, then load the job catalog and job matches. For each country or each location, set up a result scope using the Maintain Compensation Survey Scopes task, and attach eligibility rules to each scope.

14. How do I annualize hourly plans?

Answer: – As the equivalent of prorating salary plans, you annualize hourly plans using worker’s scheduled weekly hours. In hourly plans (with an Hourly frequency). Workday calculates worker’s pay using:

• The worker’s scheduled weekly hours, and
• An annualization factor.

Set the calculation method using the Maintain Frequencies task.

15. Why would I want to use default compensation on a position?

Answer: – So that every employee who hires into that position gets the same compensation values.

Default Compensation enables the establishment of compensation guidelines, plans, and plan amounts on a position.

Examples:

• Position budgeting.
• We are tracking default compensation as budgeted or approved compensation.
• Sending target or approved compensation to an external Applicant Tracking System.
• To aid in giving concise compensation guidance to those proposing compensation.

16. What is the Target Amount?

Answer: – Available for amount-based plans only. Enter the recommended positive or negative amount with up to 4 decimal places. Use the Target Amount to assign employees identical merit increases (or decreases).

You can select amount-based merit plans when creating a compensation matrix.

17. How to Create Bonus Plans?

Answer: – You can create bonus plans to assign to employees. When Workday generates the bonus pool as part of a compensation review process, it takes into account the rules and target profiles in the bonus plan.

When creating bonus plans, consider how you want to:

• Divide or consolidate bonus plans by region, job level, job profile, or grade.
• Set up targets for each bonus plan, such as no target, a single target, or multiple grades.

18. What period do you consider when prorating awards?

Answer: – Workday uses the process period end date to determine:

• Eligible employees based on their plan assignments.
• The proration calculations and performance ratings were used.

19. Explain the Compensation Parallel Event?

Answer: – Parallel events include those effective:

• On or before the merit, bonus, or stock Compensation Snapshot Date.
• Between the Compensation Snapshot Date and the Effective Date.
• After the Effective Date.

20. What target takes precedence when an employee matches multiple targets?

Answer: – Workday uses its order of precedence to derive merit and bonus targets for each employee.

1. Guaranteed minimum target (for individual employees).
2. Employee individual target.
3. Compensation matrix target.
4. Plan profile target.
5. Plan default.
   
   21.How do I pay a referral bonus?

Answer: – A referral bonus is a one-time payment rather than part of a bonus plan. To pay a referral bonus:

1. Establish a one-time payment plan for the referral bonus.
2. Use the Request One-Time Payment task.
   
   22.How does a bonus pool calculation differ from a merit pool calculation?

Answer: – Like the target, the bonus target results from individual target overrides, compensation matrix, bonus plan profile targets, or the bonus plan default target. However, the bonus target uses eligible earnings during the period specified by the planned frequency. It can also include company or modifier scorecards that reflect corporate or division performance.

23. What terminations events occur when a compensation review process is in progress?

Answer: – These termination events can occur while a compensation review process is in progress:

• Terminate Employee
• End Additional Job
• End International Assignment

24. What are Total Eligible Earnings?

Answer: – The total eligible earnings display the sum of all employee total compensation amounts using either:

• Total base pay.
• The total primary compensation bases are associated with the Plan and assigned to the selected merit plans.

25. What survey scopes do you need?

Answer: – Configure scopes that belong to each compensation survey vendor on the Maintain Compensation Survey Scopes task. Survey scopes can be locations, such as Tri-Cities Area or San Francisco Bay Area. You can associate survey scopes with employees using eligibility rules.

26. What is the Employee Visibility Date?

Answer: – The Employee Visibility Date gives compensation administrators the option to select a future date. After that date, employees signed in as Employee as Self can view their updated pay-related compensation data. Managers can then inform their workers of pay changes outside of Workday before the visibility date.

27. What are Search Reports in Workday?

Answer: – When you access a compensation review as either a participant or a reviewer, Workday enables access to the grid from these reports:

• Compensation Review Search Employees (Default): Participant (within the Organization Summary).
• Compensation Review Organization Search Report (Default): Enables access to the grid configuration for the Reviewer.

You can also access the grid from the custom reports.

28. Do you assign grade profiles manually?

Answer: – One can create eligibility rules for grade profiles and compensation plan profiles to ensure automatic and accurate updates on positions and workers.

29. What criteria do you use to assign compensation plans to employees?

Answer: – Design your eligibility rules around these criteria.

You can then roll out (assign) plans to specified populations.

30. What worker populations do you target for periodic merit, bonus, and stock awards?

Answer: – Compensation reviews require that you specify merit, bonus, or stock plans. Workday includes workers assigned to those plans in the compensation review process and doesn’t use eligibility rules directly.

When configuring compensation eligibility rules, consider your periodic compensation reviews and their target populations.

Conclusion: –

I believe the Interview Questions & Answers on Workday Advanced Compensation Studio is helpful.

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All the best for your future.

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