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How to Create a Compensation Cycle

Compensation cycles are used to plan, budget, and process pay changes (such as merit increases and bonuses) for a group of employees. This article will describe how to create these cycles to start the process.

Overview

In Fuse, a compensation cycle controls:

  • Who is included

  • What types of pay changes are allowed

  • When changes are effective

  • How budgets, merit guidelines, and workflows are applied

 

Create a New Cycle

  1. Navigate to Settings > HR Setup > Compensation Management > Compensation Setup 
  2. On the Compensation Setup page, you can:
    1. View existing cycles
    2. Copy a cycle (Copy icon)
    3. Create a new cycle
  3. Click the Add New button
    1. If you are a multi-EIN employer, you will be prompted to select the Company EIN.
    2. You will need to create a separate cycle for each EIN.
    3. You will also need to create separte cycles if any of the configuration data below differs for any groups of employees, including Pay Change Types, Effective Dates, Cycle Managers, Workflows, etc.
  4. You will be taken to the Compensation Cycle configuration page

      Step One: Configure the Compensation Cycle section

      Fill in the main cycle details:

      • Name
      • Description (optional): Add any context (population, region, purpose).
      • Status: will default to Budget.
      • Mark the Active Checkbox
      • Type: Base (affects Base Compensation).
      • Choose the Cycle Manager
        • Administrative owner of the cycle (must be in Pending to change later).
        • Cycle Managers will have full access to the entire cycle and to every workflow step
      • Pay Change Reason: Choose the Reason Code that will post to employee records.
      • Workflow
        • Select your Compensation Proposal Request workflow (or equivalent).
        • Click here for more information about Compensation Cycle Workflows
      • Can Exceed Budget
        • Checked: managers can submit proposals beyond budget.
        • Unchecked: system prevents proposals that exceed budget.

       

      Step Two: Configure Pay Change Types

      In the Pay Change Types grid, define what changes are allowed and how they behave.

      For each row:

      • Used: check this box to open up at least one pay change type in compensation worksheets. You will need separate rows for separate types (one for base compensation increases and a separate one for lump sum amounts).
      • Label: The name of this pay change type. Enter something like “Merit Increase” or “Lump Sum Bonus”
      • Single Value Matrix: tie one pay change type to a Single Value Merit Matrix if you want auto-populated recommended increases. Enabling a Single Value Matrix will also require:
      • One Time Payment: mark if this is a lump-sum payment (like a bonus):
        • Earning: select the related Earnings code

       

      Step Three: Set Compensation Cycle Dates

      1. Choose one Cycle Date Type:

        1. Common Date: same effective process for all included employees.
        2. Anniversary Date: based on each employee’s reference date (e.g., Date Hired).
        3. Anniversary Month: groups anniversaries by month.
        4. New Hire/New Job: for employees completing an initial new-job period.

      2. Open Date

        1. When the cycle starts

        2. Cannot be changed after you save the cycle.

      3. Close Date

        1. When the cycle ends; no further proposals after this date.

      4. Pay Change Effective Date

        1. This will be the effective date of the base compensation change and will usually match the start date of a pay period.
        2. Be careful with salaried employees or lump sum payments and please reach out with questions if you are unsure of the dates to use.
        3. Pay change effective dates differing between types of employees will be the most common reason you may need separate compensation cycles.

       

      Step Four (Optional): Enter Criteria to Filter Out Employees

      In Compensation Cycle Criteria, narrow which employees should be included. If left blank, all employees are included. You will want to use filters if certain employees are not eligible, or if you are creating separate cycles for separate groups of individuals.

      You can filter by:

      • Pay Type (Hourly, Salaried, etc.)
      • Employee Type (Staff, Seasonal, etc.)
      • Employee Status (usually Active)
      • Pay Grade
      • Eligibility Period Days In Job
      • Eligibility Period Days Since Hire (with comparison operators)
      • Department / Cost Center
      • Location
      • Jobs

      Use combinations to match your program design (e.g., Active, Salaried employees in specific locations with at least 12 months of service).

       

      Other Optional Features

       

      Next Steps to Review