How Salary and FTE Work Together

What the impact of FTE is to salary

ORACLE WHITE PAPER | JULY 2016
Disclaimer
The following is intended to outline our general product direction. It is intended for information
purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any
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development, release, and timing of any features or functionality described for Oracle’s products
remains at the sole discretion of Oracle.

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Table of Contents

Disclaimer 1

Introduction 1

Notes 1

Monthly Salary Basis Example 2

Hourly Salary Basis Example 3

Components Example 4

Conclusion 5

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Applicable Release Details

This document is applicable for Release 10 onwards. The integrated ability to change salary as part of a change in
work hours for the line manager, is targeted for Release 12, when the salary region is being added to the change
working hours task flow, so hours and salary can be adjusted in a single transaction.

Introduction
This document describes how changing working hours and FTE (full time equivalent) impacts a
worker's salary. When you create a new salary record on or after the FTE update date, the salary
amount (and all calculated values) are automatically adjusted for FTE.

Calculated values are:

- salary range minimum, midpoint and maximum
- annualized full time salary
- compa-ratio, quartile, quintile and salary range position

Notes
- It is a best practice to create a new salary record in Manage Salary with the same date, right after creating an FTE
or hours change in Manage Employment. If the new salary record is not on the same date as an FTE change, the
salary amount and/or salary metrics will be wrong.

- Zero FTE is not supported and will result in a divide by zero error for all calculated values that consider FTE.
Instead use a specific person type on the assignment (for example Person Type of Casual Employee) and retain an
FTE value. This person type can be used in reporting and to make sure casual employees are managed according
to requirements.

The following sections illustrate how an FTE change impacts the salary record based on the salary basis frequency
and whether or not components are used to itemize the salary adjustment.

Three examples are provided where the current and new FTE, and current and new salary, are as follows:

Worker Old FTE New FTE Salary Basis Old Salary New Salary
RX_FTE01 1.0 .5 Monthly 8888.88 4444.44
RX_FTE02 1.0 .5 Hourly 45.55 45.55
RX_FTE03 1.0 .5 Components (Monthly) 7498.40 3749.20

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Monthly Salary Basis Example
Manage Employment: the worker's FTE changed from 1.0 to .5 on 7/1/11.

Figure1 Worker with Monthly Salary Basis

Manage Salary: add a new row for 7/1/11.

When you create a new salary record with a start date of 7/1/11, the salary amount and all related metrics are
adjusted for the new FTE of .5 and you do not need to calculate the new salary. It will automatically calculate for
you.

Figure2 Worker with Monthly Salary Basis

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Hourly Salary Basis Example
Manage Employment: the worker's FTE changed from 1.0 to .5 on 7/1/11.

Figure1 Worker with Hourly Salary Basis

Manage Salary: add a new row for 7/1/11.

When you create a new salary record with a start date of 7/1/11, though the salary amount remains the same, all
related metrics are adjusted for the new FTE of .5

Figure2 Worker with Hourly Salary Basis

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Components Example
Manage Employment: the worker's FTE changed from 1.0 to .5 on 7/1/11.

Figure1 Worker with Components

Manage Salary: add a new row for 7/1/11.

When you create a new salary record with a start date of 7/1/11, the salary amount and all related metrics are
adjusted for the new FTE of .5 and you do not need to calculate the new salary. It will automatically calculate for
you.

Figure2 Worker with Components 1

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Conclusion
Once a matching date for the salary record is inserted, the new salary adjusted for FTE is created automatically and
so are all the associated calculated values. Oracle is working towards simplifying this process even more in release
12 by adding the compensation train stop to the Change Working Hours line manager flow.

Oracle Corporation, World Headquarters Worldwide Inquiries

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Redwood Shores, CA 94065, USA Fax: +1.650.506.7200

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How Salary and FTE Work Together
July 2016
Author: Gail Langendorf