2.

1 Overview of Work Structures

• 2.1.1 Importance of Work Structures in HCM

o Work structures are foundational to an organization's structure in Oracle HCM, organizing positions,
jobs, locations, departments, and grades.

o They enable accurate reporting, streamlined processes, and standardized roles across the
organization.

o Effective work structures support clear job hierarchies, efficient HR processes, and precise employee
data management.

2.2 Components of Work Structures

2.2.1 Jobs

• Definition:
A job is a broad category or classification that represents a specific role within an organization, typically
encompassing multiple positions. Jobs define the general responsibilities, skills, qualifications, and level of
expertise needed for a particular role but do not specify the exact details of the position. A job provides a
foundation for creating positions and is used to standardize roles across departments and locations.

• Key Characteristics:

o Job Title: A job title represents the name of a job and can often be used as a standard across
departments or business units (e.g., “Software Engineer”).

o Job Description: A detailed description of the duties, tasks, and objectives associated with the job. It
helps HR professionals understand the role's key responsibilities and expectations.

o Qualifications and Skills: A job specification includes educational qualifications, certifications,

experience, and competencies needed for the role. This is particularly important for recruitment
purposes, as it sets the baseline for candidate selection.

o Standardized Work Functions: Jobs define what work needs to be done but not necessarily how the
work is organized or where it is executed. Jobs often define core functions across various locations or
departments.

o Job Family and Career Pathing: Jobs are often grouped into families (e.g., IT, Marketing, Finance),
which help define career progression and lateral movements within the organization. Each job family
may include several related jobs and different levels of responsibility (e.g., Junior, Senior, Lead).

• Examples:

o "Sales Executive" – A job that involves client interaction and sales responsibilities.

o "Marketing Analyst" – Involves analyzing market trends, preparing reports, and supporting marketing
campaigns.

• Usage:

o Jobs are essential for recruitment processes, as they define the skill sets required for positions.

o Jobs also help in determining compensation and benefits eligibility, as employees in similar roles may
receive similar compensation packages.

o Job structures support HR departments in managing training and development programs, ensuring
employees meet the skill requirements for each job.

2.2.2 Positions
 • Definition:
A position is an individual slot within the organization that links to a job. Unlike jobs, positions are specific to
an organizational unit, department, or location and are often used to track workforce requirements,
compensation, and employee assignments. A position is more granular than a job, and each position may
correspond to a particular employee or vacancy.

• Key Characteristics:

o Position Title: The title assigned to the specific position, which may be a refined version of the job
title. For example, "Senior Software Engineer – Backend" vs. just "Software Engineer".

o Position Number: Each position has a unique identifier (number) that helps track and manage it
within the system. This is essential when managing a large workforce across multiple departments.

o Location and Department: Positions are typically tied to a specific location (e.g., “New York Office”)
or department (e.g., “Human Resources”). The geographic or organizational context allows HR and
payroll systems to process data accordingly.

o Reports To: Every position has a reporting structure, meaning it indicates which higher-level position
the current position reports to. This is crucial for building the organizational hierarchy.

o Position Status (Vacant/Occupied): Positions can be vacant (open for recruitment) or filled (assigned
to an employee). This is important for workforce planning and recruiting.

o Position FTE (Full-Time Equivalent): This value indicates the time commitment expected for the
position (e.g., a full-time position could be 1.0 FTE, while part-time positions would be less than 1.0).

o Position Attributes: Positions may have attributes that differentiate them, such as union
membership, location allowances, or eligibility for specific benefits. These details help in
operationalizing HR functions like payroll, benefits enrollment, and compliance.

• Examples:

o "HR Manager – New York Office"

o "Software Developer – Bangalore, Full-Time"

• Usage:

o Positions are critical for job costing, budgeting, and headcount planning. They allow the company to
manage staffing levels effectively.

o They play a key role in payroll processing, as compensation rates can differ based on the position’s
grade, department, or location.

o Position data is key to tracking internal job movement, promotions, or transfers, as well as identifying
vacant positions for recruitment.

2.2.3 Locations

• Definition:
Locations represent physical or virtual places where employees work. Locations can be defined based on
geography, office, or even home-based arrangements (remote work). Managing locations is important for
compliance with regional laws, payroll processing, and for enabling the right work-life balance policies.

• Key Characteristics:

o Location Name: This is the name of the physical or virtual location. Examples include "Chicago
Office", "London Headquarters", "Remote Work – California".
 o Location Type: Locations can be classified into various types, such as:

▪ Physical Locations: Offices, plants, and branches.

▪ Virtual Locations: Remote work or virtual offices.

o Region or Country: Locations often map to specific geographical regions or countries, which helps
with managing multi-country HR processes.

o Address: The physical address for the location is required, especially for compliance with tax laws,
benefits administration, and payroll processing.

o Location-Based Compensation and Benefits: Different locations can have varying compensation
structures (e.g., higher salaries in certain cities or regions to reflect cost of living). Locations can also
impact benefits packages.

o Time Zone and Legal Jurisdictions: Locations help define time zones for scheduling work hours and
are important for managing legal and tax compliance in different regions or countries.

• Examples:

o "Toronto Office"

o "Remote Work – Texas"

o "Global Headquarters – London"

• Usage:

o Locations are crucial for reporting, as they help HR understand where the workforce is located and
support region-specific needs, such as tax filings and legal compliance.

o Locations also play a role in compensation, as certain allowances or bonuses might be location-
specific (e.g., relocation allowances, cost-of-living adjustments).

o They enable remote work management by allowing HR to differentiate between office-based and
remote employees.

2.2.4 Grade Ladders

• Definition:
Grade ladders are used to define the career progression framework within the organization. Each grade is
typically associated with a salary range, a job level, and a set of competencies required for the job. Grade
ladders allow organizations to set up structured career paths and ensure that employee progression aligns
with compensation policies.

• Key Characteristics:

o Grade Levels: Grades are structured hierarchically, with each level representing a salary band. These
grades often reflect seniority, experience, or responsibility levels.

o Grade Steps: Many organizations also use a step structure within each grade, where employees can
progress through steps as they gain experience, achieve performance targets, or meet promotion
criteria.

o Compensation Bands: Each grade is associated with a compensation band that defines the salary
range for positions at that level. These salary bands may include base salary, bonuses, and
allowances.
 o Career Progression: Grade ladders provide employees with a clear sense of how they can advance
within the organization. For example, an employee may start at Grade 1 and, over time, may move
up the ladder to Grade 5, with increasing responsibilities, skills, and pay.

• Examples:

o Grade 1: Entry-Level (Salary: $30,000 - $40,000)

o Grade 5: Senior Management (Salary: $120,000 - $150,000)

• Usage:

o Grade ladders help in managing compensation and determining salary increments, promotions, and
bonuses based on organizational guidelines.

o They enable consistent career progression frameworks and employee development plans.

o Used for benchmarking salaries against industry standards and aligning compensation with employee
performance and organizational goals.

2.2.5 Departments and Divisions

• Definition:
Departments and divisions represent organizational units within a company that are responsible for specific
functional areas, such as Finance, Marketing, HR, IT, Operations, etc. These components provide clarity in
terms of reporting structure, responsibilities, and workflow.

• Key Characteristics:

o Department Name: Represents the name of the functional unit, such as “Human Resources”, “Sales”,
or “IT”.

o Department Hierarchy: Large departments may have sub-divisions or teams, forming a multi-level
structure for clear delegation of responsibilities.

o Reporting Structure: Defines which department reports to which higher-level division. For instance,
the HR department may report to the “Administration Division”.

o Resource Allocation: Departments are often assigned resources (e.g., budget, workforce) to
accomplish their specific goals.

• Examples:

o "Marketing Department"

o "Finance Division"

o "Engineering Department"

• Usage:

o Departments are used to organize employees by function or purpose, making it easier to track
resources, budgets, and performance.

o They help in managing business processes, as specific HR policies, such as recruitment or

performance reviews, may vary across departments.

2.2.6 Employment Types

 • Definition:
Employment types define the nature of an employee’s contract and work schedule. They help define the
terms of employment, including compensation, benefits, and other HR policies.

• Key Characteristics:

o Full-Time vs. Part-Time: Full-time employees typically work a standard number of hours, while part-
time employees work fewer hours. Full-time employees may be entitled to more benefits.

o Temporary vs. Permanent: Temporary employees are hired for a fixed duration, while permanent
employees have an ongoing employment relationship with the company.

o Contractual: These employees work under a contract that outlines the specific terms and conditions
of their employment, which may be project-based or for a specified term.

• Examples:

o "Full-Time", "Part-Time", "Temporary", "Contractual".

• Usage:

o Employment types are key to managing benefits, payroll, tax calculations, and legal compliance, as
different employment types may have different rights and obligations.

o They also play an important role in performance management, career development, and
compensation policies.

2.3 Configuring Hierarchies in Oracle HCM Fusion

In Oracle HCM Fusion, hierarchies are critical for defining the reporting structures and the relationships between
employees, positions, departments, and business units. Hierarchies help streamline the flow of data and decision-
making by establishing clear reporting lines and organizational structures.

Hierarchies in HCM can be applied to several key areas, such as:

1. Organizational Hierarchies (Reporting structures)

2. Position Hierarchies

3. Managerial Hierarchies

4. Payroll and Compensation Hierarchies

Each of these hierarchies ensures that data flows properly throughout the system, affecting workflows like
promotions, job changes, compensation planning, and reporting.

2.3.1 Organizational Hierarchies

• Definition:
Organizational hierarchies define how employees, teams, departments, or business units are structured
within the organization. It illustrates the reporting lines, which help determine who reports to whom, how
authority is distributed, and how resources are allocated across the organization.

• Key Components:

o Business Units: The highest-level divisions in the organization, often linked to legal entities or
operational units.

o Departments: Smaller divisions within a business unit. Employees are assigned to departments
based on their roles and functions.
 o Divisions: These can be sub-divisions of departments, providing even more granular structuring
within large departments.

• Usage:

o Reporting: The organizational hierarchy enables various HR reports (e.g., employee headcount by
department, promotion trends within divisions, etc.).

o Workflows: Approval workflows for compensation, performance reviews, and leave requests are
determined based on the organizational hierarchy.

o Payroll: Payroll runs may be influenced by the hierarchy, as different departments or business units
might have separate payroll processing rules.

• Example:

o A manager in the HR department may report to a Director of HR, who in turn reports to a Senior
Director. In the system, the reporting lines are configured so that HR managers' data flow to the
director, and the director’s performance or compensation data flows up to senior management.

2.3.2 Position Hierarchies

• Definition:
Position hierarchies establish the relationship between different positions within the organization. These
relationships may represent the reporting structure, but more importantly, they define how positions are
interrelated in terms of responsibility, authority, and job grade.

• Key Components:

o Position Types: These could include roles like “Manager,” “Employee,” or “Executive,” which help
define a specific set of responsibilities and job expectations.

o Job Grades: Different positions may have different levels of responsibility, which are categorized by
job grades. This could include managerial grades, seniority levels, or job categories.

o Job Families: A group of related positions. For example, all sales-related positions could belong to a
"Sales" job family.

o Position Levels: Hierarchical levels such as junior, mid-level, or senior within the same position type.

• Usage:

o Succession Planning: Position hierarchies help identify potential successors for key positions by
mapping out reporting structures and career paths within the organization.

o Compensation & Benefits: Different positions within the hierarchy may have different compensation
packages, benefits eligibility, and pay scales.

o Career Development: Employees can be mapped to a career path within the position hierarchy to
track progression opportunities (e.g., from junior to senior manager).

• Example:

o A “Senior Analyst” position reports to a “Lead Analyst,” and the Lead Analyst may report to a
“Department Manager.” The position hierarchy helps ensure appropriate role assignment, career
progression, and salary scaling across these positions.

2.3.3 Managerial Hierarchies

 • Definition:
Managerial hierarchies represent the reporting relationships between managers and their direct reports
within the organization. This hierarchy is essential for defining managerial authority and responsibility and
plays a key role in many business processes, including performance reviews, compensation, and
organizational planning.

• Key Components:

o Manager Roles: Defined roles that can be assigned to specific positions. Managers are responsible
for overseeing and guiding the work of their subordinates.

o Employee Reports: The employees who directly report to a manager.

o Matrix Management: Sometimes, an employee may report to multiple managers in a matrix

structure, depending on their projects, which requires a more complex hierarchy configuration.

• Usage:

o Performance Management: Performance reviews, goal setting, and feedback are typically managed
through managerial hierarchies. A manager will assess and guide the performance of the employees
they manage.

o Leave Approvals: Managers are often required to approve leave requests from their direct reports
based on the hierarchical structure.

o Compensation and Promotions: Managers often play a key role in determining raises, promotions,
and other compensation-related decisions for their direct reports.

• Example:

o A "Manager of Sales" may oversee a team of "Sales Representatives." The system configuration
ensures that sales reps' performance reviews, compensation adjustments, and training needs are
handled by the manager.

2.3.4 Payroll and Compensation Hierarchies

• Definition:
Payroll and compensation hierarchies ensure that employees within the organization are compensated
correctly based on their position in the hierarchy. These hierarchies can reflect compensation structures, job
grades, or the division of labor within the payroll process.

• Key Components:

o Payroll Group: A grouping of employees who are paid according to similar rules (e.g., salary group,
hourly group). Employees in the same group can have similar compensation or benefits structures.

o Compensation Bands/Grades: Salary ranges or compensation bands for each job grade or position
level, used to determine the appropriate pay for employees.

o Differentiated Pay Scales: Certain departments, locations, or positions may have special pay scales,
such as higher compensation for senior roles or for positions in high-demand skill areas.

• Usage:

o Payroll Processing: Payroll is processed differently for employees depending on their placement in a
particular payroll group or compensation hierarchy.

o Compensation Reviews: Compensation adjustments (e.g., bonuses, merit increases) are often
carried out based on a hierarchy of job grades, ensuring consistency and fairness across the
organization.
 o Salary Benchmarking: Using a compensation hierarchy, HR can compare internal compensation rates
against industry benchmarks to ensure competitiveness.

• Example:

o Employees in the “Manager” job grade may be paid on a higher salary band compared to
“Employee” job grades. The payroll system will process salary payments according to these
structures.

2.3.5 Configuring Hierarchies in Oracle HCM

Configuring hierarchies within Oracle HCM involves setting up relationships between employees, positions,
departments, and payroll systems, among other factors. The configuration process includes:

• Defining Reporting Structures: You will first define who reports to whom in the organization, determining
the structure of your managerial and organizational hierarchies.

• Mapping Positions: Map positions to job grades and job families. Determine the roles and responsibilities
associated with each position, ensuring employees are mapped to the correct hierarchy.

• Establishing Approval Workflows: Once hierarchies are in place, they help in setting up automated approval
workflows for processes like promotions, compensation changes, or leave requests.

• Setting Compensation Bands: Define compensation bands for each position in the hierarchy to ensure that
salaries, bonuses, and other compensation elements are consistent and equitable.

• Using Hierarchies in Reports: Ensure that reporting functions within Oracle HCM take the hierarchy into
account, whether it’s for generating an org chart, compensation report, or performance evaluation.

2.3.6 Best Practices for Configuring Hierarchies

• Align Hierarchies with Organizational Goals: Ensure that the hierarchy reflects your company’s structure and
objectives, with clear lines of authority and decision-making.

• Use Standardized Naming Conventions: To avoid confusion, use standardized names for positions, job
grades, and departments.

• Regularly Update Hierarchies: As the organization evolves, ensure that the hierarchies are updated to reflect
changes such as promotions, new departments, or restructuring.

• Ensure Integration with Other Modules: Ensure that the hierarchy is integrated with other HCM modules like
payroll, performance management, and recruitment. This will help maintain consistency and improve
operational efficiency.

Conclusion

Configuring hierarchies in Oracle HCM Fusion is critical for structuring the workforce in a way that ensures smooth HR
processes and operational efficiency. By defining reporting relationships, job levels, compensation bands, and
workflows, organizations can create a well-organized and transparent structure that facilitates HR management,
performance tracking, payroll processing, and more. Proper hierarchy configuration is essential for the accurate flow
of data, decision-making, and the long-term success of HR operations.
2.4 Effective Dating and Date Tracking

Effective Dating is a fundamental concept within Oracle HCM, allowing organizations to track changes to employee
data, positions, compensation, work structures, and other HR-related information over time. It provides the ability to
maintain a historical record of all changes, helping HR teams accurately manage employee lifecycle events, comply
with regulatory requirements, and analyze trends over time.

Effective dating ensures that changes in employee data are captured at specific points in time, giving a clear audit
trail of the progression of an employee's career, role changes, salary changes, and other critical updates.

2.4.1 What is Effective Dating?

• Definition:
Effective dating refers to the concept of assigning specific dates to records in Oracle HCM that denote when a
change or action takes effect. This allows Oracle HCM to track when changes should be applied and ensures
historical data is preserved accurately.

For instance, if an employee is promoted, the system captures the promotion date (effective date) to ensure that
compensation, benefits, and other work-related data reflect the change starting on that date.

• Key Features:

o Historical Record-Keeping: Enables tracking of when events or changes occurred, and what the
status of various elements was at different points in time.

o Data Versioning: Effective dating creates a version of the data that can be accessed or reported
based on a specific date. You can view what an employee's job, compensation, or position was on
any given date.

o Backward and Forward Date Tracking: Changes can be made for future dates (e.g., a promotion
effective from the first day of the next month) or retroactively (e.g., a retroactive pay increase for the
past quarter).

• Why is it Important?

o Auditing and Compliance: Effective dating ensures that all data changes are logged accurately,
supporting audit trails for compliance with labor laws, taxation regulations, and corporate policies.

o Time-Based Analysis: It allows for meaningful analysis of historical trends, such as promotion rates,
compensation adjustments, turnover rates, and other HR metrics over time.

o Seamless Transition Management: For employees going through life events (e.g., maternity leave,
promotion, relocation), effective dating ensures that transitions happen smoothly and are correctly
documented.

2.4.2 How Does Effective Dating Work in Oracle HCM?

• Effective Date Fields:

In Oracle HCM, the effective date is a system field that records when changes to an employee’s data are valid.
Every time a change is made to an employee’s record (for instance, job change, salary increase, department
transfer), the system prompts the user to specify the effective date of that change.

Example:

o If an employee’s salary is increased from January 1st, you would enter January 1st as the effective
date.
 o If you are tracking the transfer of an employee from the HR department to the IT department
starting from the 1st of the next month, you would enter the 1st of the next month as the effective
date.

• Effective Date as a Timestamp:

The effective date is used by the system as a timestamp, which is critical for maintaining multiple records. For
example, an employee might have multiple records (one for their initial hire date, another for a promotion,
and another for a compensation adjustment) with different effective dates.

Example Scenario:
If an employee receives a promotion on January 1st, then a pay increase on February 1st, and a department transfer
on March 1st, Oracle HCM stores each of these changes with their respective effective dates.

• Data Versioning:
Oracle HCM creates a new version of the employee’s record each time a change is made with an effective
date. This ensures that historical data is preserved for reporting purposes, and you can retrieve the exact
information at any point in time.

• Example of Data Versioning:

If an employee's job title is updated, say from “Senior Analyst” to “Manager,” the new record with the
effective date is created. The old record remains in the system but is not updated, so reports or queries can
access either the past or current version of the job title depending on the date.

2.4.3 Types of Effective Dates

• Current Effective Date:

The current effective date is the date that represents the latest changes in the system. It is used for most
day-to-day transactions and reports. For example, if an employee was promoted on June 1st, the data
effective as of June 1st would be considered current.

• Future Effective Date:

The future effective date is used to define changes that will occur in the future, often related to planned
changes like promotions, pay raises, or transfers. This allows HR to plan ahead and capture future changes in
the system before they happen.

Example: If an employee is scheduled for a promotion on July 1st, you can enter this future date into the system in
advance, allowing the promotion to be automatically applied on that date without needing to update it manually on
July 1st.

• Past Effective Date:

The past effective date is used for making corrections or adjustments to historical data. For example, if an
employee’s job title was incorrectly entered as “Junior Manager” instead of “Senior Manager” for the period
between March 1st to May 31st, you can make this correction using the past effective date, allowing the
system to update the record accordingly.

Example: Correcting a salary increase that should have occurred on March 1st but was mistakenly entered as March
15th.

2.4.4 Date Tracking in Oracle HCM

Date tracking in Oracle HCM ensures that changes to an employee’s work structure are accurately managed based on
a specific timeline. This allows organizations to easily track and analyze changes as they happen in the employee's
lifecycle. It helps HR professionals answer questions like, "What was the employee's compensation at a specific point
in time?" or "When did the employee move into their current position?"
 • Historical Tracking:
Date tracking helps HR systems store previous records, creating a historical timeline for each employee's
data. This can include positions, job grades, salary, department, reporting structure, and other relevant work-
related changes.

Example: Tracking an employee’s change of position from “Junior Developer” to “Software Developer” effective
January 1st. Later, another change occurs where the employee moves to a management position on March 1st.
Oracle HCM will track these changes across multiple date versions.

• Correcting Historical Data:

If errors occur, date tracking ensures that corrections can be applied retroactively while preserving the
original record. The ability to backdate or future-date changes ensures that reports are accurate and that
adjustments can be made even after the event has passed.

• Date-Driven Approvals and Actions:

Effective dating is often tied to approval processes, ensuring that changes to data are validated and approved
before the effective date is finalized. This is essential for managing payroll, promotions, and other time-
sensitive HR actions, ensuring that everything aligns with the correct timeline.

• Example: If an employee’s benefits change due to a promotion or change in status (e.g., from part-time to
full-time), the system ensures that benefit eligibility is applied from the exact effective date, avoiding
overpayments or underpayments.

2.4.5 Reporting with Effective Dates

Reporting in Oracle HCM leverages effective dates to generate accurate snapshots of employee data at any given
point in time. This is particularly useful for:

• Compensation Reports: To determine what an employee’s compensation was at any given time, even if there
were salary increases or promotions.

• Work History Reports: To track the career trajectory of an employee, including job changes, location shifts,
and compensation adjustments, at specific effective dates.

• Compliance Reports: For auditing purposes, Oracle HCM can provide reports on changes to employee data
that align with regulatory or tax reporting requirements, ensuring compliance with government and labor
laws.

Example: A report showing an employee's promotion history, including the original hire date, the promotion date,
and compensation history, using the respective effective dates.

2.4.6 Managing Effective Dates in HCM Transactions

• Transactional Changes:
When performing transactions in Oracle HCM (e.g., adding a new employee, transferring an employee,
changing compensation), effective dates are assigned to each action. These actions can be:

o Hiring an employee: The date the employee officially joins the organization.

o Promotions: When an employee is promoted to a higher position or pay grade.

o Salary Adjustments: When an employee’s salary changes due to inflation, performance review, or
market conditions.

o Transfers: Moving an employee between departments, roles, or locations.

 • Managing Complex Scenarios:
In complex scenarios, such as international assignments, leaves of absence, or maternity leave, effective
dating allows HR to manage different aspects of the employee’s lifecycle while respecting both historical and
future changes.

Conclusion

Effective dating and date tracking in Oracle HCM enable organizations to manage workforce data in a time-sensitive
manner, ensuring that changes are tracked, recorded, and reported correctly. It provides the flexibility to manage
past, present, and future data with precision, supporting auditing, compliance, and strategic decision-making
processes. This is especially crucial in dynamic organizations where changes in employee status and roles are
frequent, ensuring that HR systems remain accurate, up-to-date, and compliant with regulations.