Before creating a compensation cycle, you should have the items below prepared.
Files to upload
The following files will need to be uploaded before creating a compensation cycle.
1. Employee pay data
Employee pay data is required to create a compensation cycle. Required data includes the current base pay amount, pay currency, and pay effective date. If applicable, the current variable pay amount and bonus amount should also be uploaded for each employee.
Learn more in How to Upload Employee Compensation Data.
2. Compensation bands
Compensation bands are used to establish the pay range for a specific role. A compensation band is defined by a minimum and maximum amount and is often differentiated between roles, levels, and pay zones. Compensation bands are recommended but not required for running a compensation cycle.
Lattice uses job architecture as a framework for defining compensation bands. Learn more in What is Job Architecture?
The following fields are required to create a compensation band:
Job function
Job type
Job level
Minimum base pay
Target base pay
Maximum base pay
Currency
Learn more in How to Create Compensation Bands and How to Bulk Upload Compensation Bands.
3. Compensation band assignments
If compensation bands are part of the compensation review process, employees must be assigned to their compensation band before creating a compensation cycle.
When bulk-assigning compensation bands, employees are matched using the following fields:
Name
Employee email
Job function
Job type
Job level
Pay zone (if applicable)
Learn more in How to Assign Employees to Compensation Bands and How to Bulk Assign Employees to Compensation Bands.
4. Promotions
Promotion indicates which individuals are going to be promoted via this cycle. Promotion is set during the compensation cycle set up via a CSV.
Learn more in Create a Compensation Cycle.
Cycle information
The compensation cycle will require the following information. Learn more in Create a Compensation Cycle.
1. Currency
If you have a distributed team that is compensated in different currencies, you can set up a single compensation cycle that includes all employees. Learn more in Create a Multi-Currency Compensation Cycle.
2. Eligibility
Decide which employees are eligible to receive a compensation adjustment. You will have the option to customize eligibility later on in the process.
3. Performance data to be used
Determine whether to bring in a performance rating question from a review cycle. This information can be used to help calculate merit raise guidance and be provided to managers and admins for context.
4. Promotions
Decide if you would like to include promotions in the compensation cycle. If compensation bands are included in your compensation review process, promoted employees' new compensation bands should also be determined ahead of cycle setup.
5. Raise budget
Decide on an overall budget for merit raises and promotions, which can be expressed as a percent (%) increase in total on-target earnings per eligible employee or a lump sum amount.
6. Eligibility for bonus and equity
If bonus and equity will be included in the cycle, determine eligibility and guidance rules for each applicable pay type (bonus plan payout, one-time bonus, bonus target adjustment, equity refresh grant, and promotion equity grant).