Understanding Advanced Use Cases for Custom Compensation
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Understanding Advanced Use Cases for Custom Compensation

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Article summary

Use Case: Professional Services Billable Pay Calculation

In Professional Services (PS) workforce planning, employees are compensated based on the number of billable hours worked, with rates varying depending on the total billable hours in a given period. Organizations need a flexible compensation model that dynamically adjusts pay based on billable hour thresholds without requiring manual intervention.

The Custom Compensation helps address this use case by enabling users to:

  • Capture employee-specific billable hours using Direct Data Input (DDI) Compensation.

  • Maintain tiered rates based on billable hours using a By-Range Attribute.

  • Compute PS Billable Pay dynamically through a Custom Compensation formula.

How the Custom Compensation Addresses This Use Case

  1. Capturing Employee Billable Hours: Since billable hours vary by employee, a Direct Data Input (DDI) Compensation is used to input billable hours at a by-period level. This allows flexibility in capturing actual hours worked for each employee within the workforce planning system. If billable hours are consistent across employees, a By-Period Attribute can be used instead. However, for this example, DDI Compensation is mapped at the employee level to ensure individual billable hours are recorded accurately.

  2. Maintaining Applicable Rates Based on Billable Hours Range: To determine the correct compensation rate based on billable hours, a By-Range Attribute is used. This attribute acts as a lookup table that dynamically assigns the appropriate rate based on the employee’s total billable hours.

    Example: By-Range Attribute (Billable Hours to Rate Mapping)

    This ensures that each employee is automatically assigned the correct rate based on the number of billable hours worked, eliminating manual rate selection.

  3. Creating a Custom Compensation for PS Billable Pay: Once the billable hours and applicable rate are defined, a Custom Compensation formula is used to compute PS Billable Pay dynamically.

    The RangeCalculation.Floor function applies a lower boundary to an employee’s PS Billable Hours, a compensation item, based on the PS Billable Hours Applicable Rate, a range attribute. This ensures that billable hours are adjusted to meet minimum thresholds, maintaining consistency in billing and revenue calculations.

  4. Mapping & Processing the Custom Compensation: Once the Custom Compensation is created, the process involves:

    1. Mapping the Custom Compensation to Employees – Assign the compensation structure to relevant employees.

    2. Processing Compensation Calculation – The system computes PS Billable Pay dynamically based on billable hours and applicable rate.

    3. Generating Reports & Dashboards

      1. The calculated PS Billable Pay is visible in Employee Reports.

      2. It is available as a Dimension Member in Dynamic Reports & Dashboards, allowing FP&A teams to analyze workforce costs efficiently.


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