Salary Merit Planning Process - BorgWarner

Salary Merit Planning Process

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Course Structure

01 BorgWarner Compensation Policy

02 Introduction to Workday

03 Navigating through Workday

04Proposing and Approving Employee

Salary Changes & Promotions

05 Dashboard & Reporting

06 Merit Statements for Employees

07 Q&A

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The Principles:

BorgWarner’s Compensation Philosophy

Click Next to continue.

1Pay is designed to attract and retain highly

qualified employees

2We recognize our external competition when

setting our pay grades and midpoints

3Salary increases are awarded based on

performance, position in the salary range, and

business conditions

4Primary responsibility for determining pay is at

the location level

5Corporate oversight ensures that pay practices

are consistent across business units, aligned

with local markets, and financially responsible

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The Principles:

How BorgWarner’s Salary Structures Are Determined


Salary structures are targeted at 50th

percentile (median) of market by country

Market data by country reflects two (2) sources of

national industry data (Willis Towers Watson, Aon

Hewitt) as well as automotive-specific data where

available

Salary structures are reviewed by job and country

on an annual basis using those data sources

Salary structure adjustments are proposed by

country and global grade by WHQ

compensation team and reviewed with HR

teams for reasonableness

While significant structure adjustments can

cause big changes to compa-ratios from year

to year, our goal is to make sure that our salary

structures are always competitive for each job

in the countries where we operate

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How BorgWarner’s Salary Planning Budgets Are Determined


Salary planning budgets are reviewed on an

annual basis by comparing against salary

increase market projections (merit + market

adjustments) in each of our countries

This market data by country comes from two (2)

sources of automotive industry data (Aon Hewitt

and Willis Towers Watson) as well as general

industry data (Willis Towers Watson)

Using that market data, salary planning

budgets are proposed by country by WHQ

compensation team and reviewed with HR

teams for reasonableness

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In BorgWarner, determining an employee’s salary increase depends on several factors.

Click each factor to learn about them.

Factors Determining an Employee’s Salary Increase

Slide 5

Compensation

RatioPerformance Retention

Pay Relative

to Peers

Additional

Market

Adjustments

Lump Sum

AwardsPromotions

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Compensation


Pay Relative

to Peers

Additional

Market

Adjustments

Lump Sum

AwardsPromotions




Compensation Ratio (Compa-ratio, C/R)

▪ It is the ratio of the salary divided by the midpoint of the grade.

▪ Fully proficient employees should be near 100%, while employees

new to their position are generally between 85% - 90%.

▪ Avoid letting internal equity drive salary decisions, especially in

cases where comparable employees are paid below market;

doing so makes market inequities more difficult to resolve

▪ Lump sum awards are recommended for compa-ratios above

110% instead of a salary increase.

X

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Compensation


Pay Relative

to Peers

Additional

Market

Adjustments

Lump Sum

AwardsPromotions




Performance

It is important to consider the performance during

the preceding year.

X

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Compensation


Pay Relative

to Peers

Additional

Market

Adjustments

Lump Sum

AwardsPromotions




Retention

The strategic importance of an employee and their

position should be considered as well.

X

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Compensation


Pay Relative

to Peers

Additional

Market

Adjustments

Lump Sum

AwardsPromotions




X

Pay Relative to Peers

▪ The proposed salary increases for other employees should be considered.

▪ The salary increase is proposed as per the employee’s present salary and how much they

would need to reach the market target.

▪ The Goal is to get good performers to market as soon as practical, manage out poor performers,

reward good performance, and use lump sums to keep employees within range.

Minimum Target Maximum

▪ New Employees

▪ Minimally Qualified

▪ Borderline Performers

▪ Experienced Employees

▪ Fully Qualified

▪ Strong Performers

▪ Veteran Employees

▪ Highly Qualified

▪ Exceptional Performers

Accelerate toward market Keep close to market Decelerate above market

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Compensation


Pay Relative

to Peers

Additional

Market

Adjustments

Lump Sum

AwardsPromotions

Additional Market Adjustments

This is typically provided to address low compa-ratios

(< 85%), internal equity issues among employees,

and retention issues.

X

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Compensation


Pay Relative

to Peers

Additional

Market

Adjustments

Lump Sum

AwardsPromotions

Lump Sum Awards

This is recommended for compa-ratios above 110%

instead of a salary increase.

X

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Compensation


Pay Relative

to Peers

Additional

Market

Adjustments

Lump Sum

AwardsPromotions

Promotions

This is provided in addition to a merit increase, it is recommended to

use your merit budget as part of the total promotional increase.

Example: If you are planning a 10% total increase for a promotion,

plan the merit increase % based on the merit budget and plan the

remaining promotion % amount to equal the 10% total.

X

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Managers need to keep in mind a few key points before starting the Merit Planning Process.

Key Points for Managers


Annual Salary Merit Planning for the year is

processed in Workday for salaried employees.

Exceptions for using Excel spreadsheets are only

for Hourly production employee populations or for

Union related negotiations.

The Workday system enhances the efficiency and

automation of the Annual Salary Merit Planning for

employee transactions and approvals.

Slide 6

Key

Points

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Information Security Tips


Slide 7

Treat all employee

information as if it

were your own

and ensure it’s

secure at any

given point of time

Lock your

computer screen

when leaving

your desk

Log out when

finished with a

Workday session

Use a secure

printer

Do not leave

printed employee

related information

or reports at the

printer or visible

on your desk

Managers Please Note!

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Check Your Understanding

30th

40th

50th

60th

According to BorgWarner's Compensation Philosophy, what percentile of the

external market do the midpoints reflect?

Select the correct option and click Submit.

SUBMIT

Slide 8

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Check Your Understanding


Excellent, that’s correct!

According to BorgWarner's

Compensation Philosophy, the pay

grades and midpoints are designed to

attract and retain highly qualified

employees, while keeping in mind

external competition - with midpoints

reflecting the 50th percentile of the

external market.

30th

40th

50th

60th

SUBMIT

According to BorgWarner's Compensation Philosophy, what percentile of the

external market do the midpoints reflect?

Select the correct option and click Submit.

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Course Structure








07 Q&A

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Understanding Workday

Workday uses the “Shared Participation” model.

Managers:

Have one Inbox task for each Supervisory

Organization they have and can view direct reports. If

have multiple supervisory organizations, will have

multiple Inbox tasks

Have the ability to manually advance an organization

up to their level

One consolidated budget for merit, adjustment, and

promotion

Have a Dashboard for salary planning reports

Can print Merit Statements online. Some locations may

choose to use customized letters.

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Managers:


▪ Step 1: Need to propose amounts for their Direct Reports in

terms of:

▪ Merit %

▪ Additional (Market) Adjustment %

▪ Lump Sum Amount

▪ Promotion %

▪ Step 2: Review the proposals for all the subordinate

supervisory organizations that report up to them (if any)

▪ Step 3: Can “Submit” planning only when ALL Organizations

that report to them have been approved

▪ Should follow Supervisory Organizational Approval Paths

▪ Superior Organizations, not Manager’s Manager

▪ Business Process Approvals follow Manager’s Manager

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07 Q&A

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Log into Workday

Click Sign In

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How to Navigate through Workday

Click the Inbox icon

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How to View Direct Reports & Sub-Organizations Reporting to You

Click the Expand button

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How to Access Tasks in the Inbox


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Note: If a manager has two separate

organizations under him and has a ‘Propose

Merit’ task for each organization, then the

manager would need to plan for each

organization separately.

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How to Initiate the Merit Planning Process for Direct Reports

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If you do NOT have organizations that report

up to you, you would begin planning for your

direct reports when the task opens.

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How to Initiate the Merit Planning Process for Direct Reports

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How to Add Merit Increase Percentages

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Click the Merit tab

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The Merit page is now displayed.

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Select the Employee

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Enter the Merit

Increase %

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How to Propose Promotions for Employees

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Click Next to continue. 35


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Click the Promotion tab

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Select the Employee

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Select Yes

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Click the Job Profile field

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Note: The Business Title will change

by default to the Job Profile name.

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By default, the Grade Profile will be based

on the selected Job Profile.

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Enter the Promotion %

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How to Submit the Merit Proposal

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Click Submit

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Click OK

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Click Done

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Click the error icon

drop-down arrow

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The error pop-up window is now displayed.

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The error pop-up window is now displayed.

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How to Add Differentiating Merit Increase for Employees with Same Compa-ratio

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Click Submit

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How to Increase the Compa-ratio of Employees to Match their Compensation Grade

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Enter the Merit

Increase %

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Enter the Additional

Adjustment %

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How to Use the Complete on Behalf option

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How to Use the Complete on Behalf Option

Click the Sub org icon

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Select the Complete on

Behalf option

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Enter a Comment

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The rules of participation would be different in the event an employee gets:

Click each image to learn the rules of participation.

Rules of Participation


A Separate Job or Salary Change

▪ The Merit Pool amount for the employee is

updated based on the new job change or

salary change.

▪ The employee is moved to the new

Organization and/or Manager.

▪ The employee merit pool amount is moved to

the new Organization and/or Manager.

▪ Any planned merit increase percentage

would be applied to any new salary from the

job change or salary change.

Terminated

▪ The employee and their pool amount would

remain and not be used for the terminated

employee.

▪ No planning should be made for the

terminated employee.

▪ The pool amount can be used on other

employees.

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Approval Path for the Salary Merit Process

The Approval path for the Salary Merit Planning Process is based on the Supervisory Organization Structure.

Click each dot to learn about the approval path for the salary merit process.

Always ensure that Organizations and Managers are

correctly set up in Workday prior to the start of the Salary

Merit Planning Process. This can be done by reviewing the

organizational structures.

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Approval Path for the Salary Merit Process

The Approval path for the Salary Merit Planning Process is based on the Supervisory Organization Structure.

Click each dot to learn about the approval path for the salary merit process.

▪ Each supervisory organization reports up to a higher

supervisory organization; each supervisory organization

has a manager.

▪ The manager of the superior organization needs to

approve the planning of the organization below / under it. It

doesn’t follow the manager’s manager path.

▪ Once the overall process is initiated, approval paths are

frozen.

▪ If you come across an incorrect path, you must still follow

that approval path in order to give that supervisory

organization their merit award.


Approval paths CANNOT be changed during the

merit process.

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Course Structure








07 Q&A

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How to Access the Salary Planning Dashboard

Click the Salary

Planning icon

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How to Access the Salary Planning Dashboard

The Salary Planning

page is now displayed.



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Salary Planning Dashboard View

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Salary Planning Dashboard View

1 2

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Salary Planning Dashboard Graphs

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List of Reports on the Salary Planning Dashboard


▪ Merit - Direct Report’s Information

▪ Uses the Supervisory Org in the Prompt

▪ Merit - Spend Totals

▪ Uses the Supervisory Org and Includes the

Subordinates value in Prompt

▪ Merit - Employee Count By %

▪ Shows for all supervisory orgs they have

access to

▪ Merit - Employee Count By Compa-Ratio


access to

▪ Merit - Average % By Performance Rating


access to

Audit Reports

▪ Merit - Employee Information

▪ Merit - Spend Summary / Approval Status Report

▪ Merit - Summary by BU

▪ Merit - Summary by Country

Additional Reports for Salary Planning

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Report for HR Manager

Compensation Review Process Search Employees (Default)

• Allow HR Merit Managers to view and edit employees salary planning increases

• BU Merit Managers and HRVP also have access to it

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Course Structure








07 Q&A

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Printing Merit Statements


Merit Statements in Workday

Merit Notification Statements can

be printed by Managers for their

team members in Workday

To use this functionality, the

salaried employees must have

Workday accounts set up

Some locations may choose not to

use this functionality and use their

own customized statements for

their employees

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How to Print Merit Statements

Click the Related

Actions button

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Select View Merit Statements

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The Merit Statements page is

now displayed.

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Examples of Merit Statements



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Training and Resources for Managers

To help Managers learn what they need to know, they have access to:

Salary Planning Online Training

via LMS

Local HR

Representative

FAQ and Quick Guide: click “Links” Icon on Workday homepage

- Workday Training Documents – Salary Planning.

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Next Steps


Key Dates:

Manager e-learning on Workday salary

merit planning process to be available in

LMS during week of January 13 (will be

assigned to new managers by LMS and

available for all other managers)

Begin salary planning on or about February

7th

Managers complete all salary planning and

approvals before BU deadlines

Merit Statements will be available in

Workday for managers to access on or

about March 23rd

Managers communicate increases to their

employees by March 31st

Salary Planning increases will be effective

on April 1st83


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Course Structure









07 Q&A

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Thank you for completing the course


Salary Merit Planning Process - BorgWarner

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