Tuesday, August 26, 2014

How the FTE is Calculated in PeopleSoft

FTE (Full Time Equivalent) indicates how much percentage of the full-time an employee works for. For example, if the default full time Standard Hours is defined as 40 hours in a week (5 working days) and an employee works for 25 hours out of those 40 hours then it means they work for 62.5% of the full time and the FTE value for this would be 0.625. However, if the employee works for all 40 hours in a week then the FTE would have been 1 which indicates that employee is working full time.

Please also see
Simplified Way to Provide a Page Access in PeopleSoft
Understanding Dynamic prompts in PeopleSoft
Implementing parallel processing using Application Engine in PeopleSoft
Adding and Maintaining Person Of Interest in PeopleSoft
PeopleSoft Set Control Field
Peoplesoft Row Level Security Search Records
SQL Query for Max Effective (MAX (EFFDT) dated row from JOB table
PeopleSoft Set Control Field Concept and Tableset Sharing 
Understanding Future dated security in PeopleSoft 
PeopleSoft 9.1 Person Model
PeopleSoft HRMS Online Training

Before we go any further, I would like to bring up some of the past experiences where I have had seen people calculating FTE through dividing Standard Hours mentioned in Job page by the Default Std Hours mentioned in Installation Table page (Navigation: Main > Setup HRMS > Install > Installation Table) which is absolutely wrong.

So, lets look at the formula used for FTE calculation in Job Data page:


                              (Job Std Hours)            x (Annualization Factor of Job Std work Period)

FTE =          --------------------------------------------------------------------------------------------------------------
                      (Default Full Time Std Hours) x (Annualization Factor of Default Full Time Std Work Period)


In this equation, there are two sets of entities: 
Set 1 - Job Std Hours and Job Std Work Period
Set 2 - (Annualization Factor of) Default Full Time Std Hours and (Annualization Factor of) Default Full Time Std Work Period

We must understand the entities Standard Hours, Standard Work Period and Annualization Factor of Standard Work Period in PeopleSoft.

Standard Hours in PeopleSoft

The number of hours an employee must work for in a particular period.

Standard Work Period in PeopleSoft

The work period in which an employee must complete the Standard Hours.

Annualization Factor in PeopleSoft

It's a number which tells how many times a particular frequency will occur in a year.
For example, the annualization factor for a Weekly frequency would be 52 because a week will occur 52 times in a year. Similarly, the annualization factor for a monthly frequency will be 12, for a semimonthly frequency it will be 24 so on and so forth.
We will understand what is the significance of Annualization Factor in FTE calculation as mentioned in the equation. Note that, the annualization factor for each frequency is defined in the Frequency Setup table (Navigation: Main > Setup HRMS > Foundation Table > Compensation Rules > Frequency Table > Frequency Table)

Lets get back to our equation which we saw in the beginning: As per the equation, the Set 1 is divided by Set 2 which gives the FTE in Job Data page. When we say Set 1, we basically are referring to below fields in Job Data page:



If you have hired a person then you would have definitely noticed that these two fields Standard Hours and Work Period get auto filled and based on the values FTE is also auto calculated. But the real question is how do these two fields get auto filled ? where the values come from ?

There are different places from where the values for these two fields come based on the order of priority. When a person is hired through Add an Employment Instance page, system first looks into the Position Data page for the field values, provided a position is assigned to this person. If the field values are not mentioned over there then it looks into the Job Code page for the same, provided the Job Code is also assigned to this person. If the field values are not provided in Job Code page too then it looks into Sal Admin Plan page for the same, provided the Sal Admin Plan is assigned to this person. If the field values are not provided in either of these pages or if none of the three entities - Position, Job Code, Sal Plan is assigned to the Person then it finally looks into Installation table for the corresponding values and bring them into Job Data page.


Well, this was all about Set 1 entities i.e Job Std Hours and Job Std Work Period but what about Set 2 entities ? What exactly are we referring to when we say Set 2 fields (Default Full Time Std Hours and Default Full Time Std Work Period) ?
This is nothing but the Default Full Time Standard Hours and Default Full Time Standard Work Period against which we are measuring the Job Std Hours and Job Std Work Period (Set 1 Entities) to determine whether employee is part time or full time. These fields i.e Default Full Time Standard Hours and Default Full Time Standard Work Period, are defined in Sal Admin Plan (Navigation: Main > Setup HRMS > Product Related > Compensation > Base Compensation > Salary Plan) page and Org Defaults by Permission List page (Navigation: Main > Setup HRMS > Product Related > Foundation Tables > Organization > Org Defaults by Permission List)





The page Sal Admin Plan gets the priority over Org Default by Permission list when system look out for the Default Full Time Stand Hours and Default Full Time Standard Work Period provided the Sal Admin Plan has been selected in the Job Data page. But if the Sal Admin Plan has not been selected in Job Data page then the page Org Default by Permission List becomes the ultimate source.


By now, we have discussed everything which is there in the FTE equation except one - Annualization Factor. Its a fact that, and its evident from the equation too, the equation would give correct FTE value only when we use Annualization Factor of Job Std Work Period and Default Full Time Std Work Period. 
But the biggest question is, why do we need to use Annualization factor of these two fields in the first place ? 

Please also see
'Override Position Data' and 'Use Position Data' Option in Job Data Page
Hiring a Person in PeopleSoft
How to find the List of Users Assigned to a Role
How the Various Date Fields on Employment Data Page are Updated
Simplified Way to Provide a Page Access in PeopleSoft
How to Resolve a Row Level Security Issue in PeopleSoft
Part Time/Full Time, Regular/Temporary and Contingent Workers in PeopleSoft
SQL Query to Find Direct Reports for a Manager in PeopleSoft
Understanding Component Interface in PeopleSoft 
FTE For Multiple Jobs in PoeopleSoft
Business Unit, Company and Regulatory Region in PeopleSoft

There might be a possibility where during a hire, the HR user gives the Job Std Work Period (Set 1 Entity) different than the Default Full Time Std Work Period (Set 2 Entity) and in that case by simply dividing Job Std Hours by Default Full Time Std Hours wouldn't yield correct results.
For example, the HR user have given Job Std Work Period as Biweekly, but the Default Full Time Std Work Period is defined as Weekly:

Job Data Page (Set 1 Fields) :

  • Job Std Hours - 38.75
  • Job Std Work Period - Biweekly

Salary Plan Page (Set 2 Fields) :

  • Default Full Time Std Hours - 38.75
  • Default Full Time Std Work Period - Weekly

If we don't consider annualization factor then FTE = 38.75/38.75 = 1 (Full time) which is wrong because In Both cases, though hours are same but the Company policy says that worker has to complete 38.75 hours in one week (Weekly) then only they will be considered as full time but in this example as per Job Data page the worker is completing 38.75 hours in Two weeks (Biweekly) hence he/she is not full time. And to get the correct FTE value we have to include annualization factor here. Lets now calculate the FTE by using the same equation we saw in the beginning.
For that we first need to get the annualization factor of both Work Periods (frequencies) and that can be found in Frequency table (Navigation: Main > Setup HRMS > Foundation Tables > Compensation Rules > Frequency Table)

The annualization factor for Weekly work period (Frequency) = 52
The annualization factor for Biweekly work period (Frequency) = 26


                              38.75   x 26

FTE =          -------------------------------  =  0.5 (Part Time) which is correct.
                              38.75   x 52


Exercise:

So far so good, now lets do an exercise to prove the functionality as to how the Set 1 and Set 2 fields are referred to calculate FTE value while hiring a person through Add an Employment Instance component.

Lets see what values have been given for these two fields in Installation Table and Salary Plan page.

Installation Table Page:




Salary Plan Page:




Lets hire an employee now. Do not provide values to any of the following fields for now - Position Number, Job Code, Salary Admin Plan and see what is the Standard Hours field value.



Let me quote my statement from an earlier paragraph:

 If the field values are not provided in either of these pages or if none of the three entities - Position, Job Code, Sal Plan is assigned to the Person then it finally looks into Installation table for the corresponding values and bring them into Job Data page.

So as per this statement, the value for the field Standard Hours should come from Installation table i.e 37.50 hence my statement stands correct. If you notice, the FTE in this case is 0 because there is no 'Default Full time Std Hours' available so far since Sal Admin Plan is yet to be assigned.

Now, Lets assign the Salary Admin Plan XYZ to this employee and see how the values change:




Now, let me again quote my statement from the same paragraph:

system first looks into the Position Data page for the field values, provided a position is assigned to this person. If the field values are not mentioned over there then it looks into the Job Code page for the same, provided the Job Code is also assigned to this person in job page. If the field values are not provided in Job Code page too then it looks into Sal Admin Plan page for the same, provided the Sal Admin Plan is assigned to this person.

As per this statement, the value for the field Standard Hours should come from Salary Plan i.e 40, hence my statement stands correct. 
In this case, the FTE is calculated as 1 because both the Job Std Hours and Default Full Time Std Hours along with Work Period in Job page and Salary Plan page respectively are same.
 


Please also see
Simplified Way to Provide a Page Access in PeopleSoft
PeopleSoft Set Control Field
Adding and Maintaining Person Of Interest in PeopleSoft
Unable to See Future dated transactions in Job Data page in PeopleSoft
Hiring a Person in PeopleSoft
Part Time/Full Time, Regular/Temporary and Contingent Workers in PeopleSoft
Understanding Component Interface in PeopleSoft
SQL Query to Find Direct Reports for a Manager in PeopleSoft 
How to find the List of Users Assigned to a Role
FTE For Multiple Jobs in PoeopleSoft
Understanding Future dated security in PeopleSoft
How to Resolve a Row Level Security Issue in PeopleSoft
Part Time/Full Time, Regular/Temporary and Contingent Workers in PeopleSoft 
'Override Position Data' and 'Use Position Data' Option in Job Data Page 
How the Various Date Fields on Employment Data Page are Updated 

6 comments:

  1. If I use position management, Standard hours & FTE becomes read only in JOB. So in this case and if I associate two people to a position, how does FTE gets calculated automatically to 0.5?

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  2. This comment has been removed by the author.

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  3. As long as you keep the Sal Plan same for all incumbants at the Job Data level, the calculated FTE will be same for them

    ReplyDelete
  4. Hi Santosh

    I would like to speak with you regarding Peoplesoft Online training and Support


    You can reach us:
    ViveK
    +91 9177351577

    ReplyDelete
  5. Hi Santhosh,

    I just reviewed your post on FTE, and my question on this is
    If there are no values been selected in job for Location, Jobcode and Position data the set1 values should come from Installation table and Set2 value should come from Or default from permission list and the FTE should get calculated. but why it is showing a Zero in your example.

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  6. Very well explained. Good stuff.

    ReplyDelete