In this article:

What is a compensation cycle?

What elements are part of a Deel Compensation comp cycle?

Worker eligibility

Creating a comp cycle for workers

Frequently Asked Questions

What is a compensation cycle?

Compensation review cycles are a core part of compensation planning and refers to a review of a group of workers' pay. This could include individual teams, larger departments, or even an entire organization.

Compensation review cycles generally involve multiple stakeholders and can include multiple levels of review and approvals. Key components of a compensation cycle include: Adjustment types (e.g., Promotions, Market Adjustments, Merit Adjustments), Eligibility, Budgets, and Guidance.

Parts of a customized compensation cycle:

• Target effective date
• Salary adjustments
• Merit-based comp adjustments 
• Promotion comp adjustments
• Market-based adjustments
• Assign Workers to include in cycle
• Assign Managers to review the cycle
• Add compensation review phases
• Creation of performance rating scale
• Guidance for merit-based compensation consideration, with an auto-populate option

Worker eligibility for compensation cycle

What are the requirements for a worker to be eligible for a job profile assignment, and then to be included in a compensation cycle?

The worker must be:

• Active worker status
• Active contract (also known as 'in progress')
• The worker must have a job title listed in their overview page
• Total compensation amount (such as salary) for their job title must be listed

Once eligiible, the worker profile should appear correctly in Org settings > Settings tab > Job architecture

Creating a compensation cycle

1 - Select the Compensation icon on your homepage click the (2) Create Cycle button 

Follow the on-screen prompts to create your cycle details, such as giving it a name and an effective start date.

You can toggle on options such as promotion request reviews, merit-based salary adjustments, and more.

Please note that if you allow promotion requests during the cycle, you'll have to decide if managers must use existing job profiles within your job architecture for promotion, or not.

2 - Click the Add Workers button to add workers and managers

Once you've added all workers who are eligible for the comp cycle, click Continue to assign Managers. Including a manager will give them the ability to see, comment, and make compensation adjustments during their cycle phase. 

Select the manager(s) and click Add selected.

3- Configure review phases (optional)

Now that you've added the eligible workers for the compensation cycle and the managers, you can configure review phases. Click the Configure phases button to begin.

You'll now define how many phases to include in the cycle, the timeline, and which managers should participate. A phase starts when the prior phase ends. Click Add phase to add additional phases to the calendar, and be sure to add managers into the phases.

Managers can be assigned to multiple phases. A common reason to do this is if there is a manager (e.g. the Director of Finance) who both needs to request comp changes for their direct reports, and in a later phase review their indirect reports. This is to separate the requesting changes process from the approving changes process for enhanced structure.

4 - Define performance rating scale (optional)

You can customize your performance rating scale to differentiate the levels of performance. 

Click the Add Rating button to keep adding additional alphanumeric values to your scale.

You will also need to CSV upload the defined performance ratings for each worker View the template guidelines to prevent errors, and click Download to download an empty CSV to import your data into Deel. Make sure the performance scores for each worker match an option you previously defined.

If you are using Deel Engage’s Performance cycle feature, you can export the performance scores of workers and easily re-upload them into Deel Compensation.

You can also select if managers or only admins can edit the uploaded performance scores of their reports.

5- Use Deel Guidance to auto-populate merit guidance suggestions (optional)

You can use Deel Guidance only if you added a merit-based adjustment option

This will use performance ratings, and compa-ratio ranges if enabled, to generate merit guidance and budgets for different segments of workers.

Click the Add Guidance Population button to get started, then Click Add Workers to begin populating a guidance population group.

These are groups who share some kind of common criteria that may influence their compensation considerations. For example, all workers based in London, UK; or the Human Resources or Engineering Department.

If you chose an automatic budget in step one, you'll fill out two key fields : the merit guidance and the budget. The merit guidance gives managers a guidance percentage for each performance ranking, while the budget field gives your managers the appropriate budget correlated to the merit guidance. For example, if you type 10% in one row for a budget, Deel Compensation will give the managers of the workers in that row enough budget for a 10% increase.

[ACCORDION] Pre-fill guidance

Select the Merit guidance tab > the Pre-fill guidance button to auto-populate compensation recommendations. The recommendations will be in line with the supplied guidance percentages, so managers only need to accept the guidance.

[ACCORDION] Adding compa ratio

Compa ratio ranges help align fair compensation increases calculated from salary bands even if workers are spread out across different countries, locations, or organizational departments

Select Merit guidance > Add compa-ratio ranges. Click add range to begin, and enter values for top and bottom.

Workers must have a salary band for compa ratio to be calculated. Compa ratio ranges provide guidance based on both performance scores and compa ratio.

 [/ACCORDION]