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Compensation Management (PACM)

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Compensation Management (PA-CM)

SAP AG

Copyright
© Copyright 2001 SAP AG. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft , WINDOWS , NT , EXCEL , Word , PowerPoint and SQL Server are registered trademarks of Microsoft Corporation. IBM , DB2 , OS/2 , DB2/6000 , Parallel Sysplex , MVS/ESA , RS/6000 , AIX , S/390 , ® ® ® AS/400 , OS/390 , and OS/400 are registered trademarks of IBM Corporation. ORACLE is a registered trademark of ORACLE Corporation. INFORMIX -OnLine for SAP and Informix Dynamic Server Informix Software Incorporated.
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Compensation Management (PA-CM)

Icons
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Compensation Management (PA-CM)

SAP AG

Contents
Compensation Management (PA-CM).......................................................................... 7
Compensation Management (PA-CM) ........................................................................................................9 The Compensation Management Process...............................................................................................11 Working with the Object Manager ............................................................................................................12 Object Manager ..........................................................................................................................................14 Searching for/Selecting Objects..............................................................................................................16 Using Search Functions.....................................................................................................................17 Using Search Variants .......................................................................................................................19 Configuring Columns...............................................................................................................................20 Job Pricing ..................................................................................................................................................21 Planned Compensation Infotype (1005)...................................................................................................22 Job Evaluation Results Infotype (1050) ...................................................................................................24 Salary Survey Results Infotype (1051) .....................................................................................................25 The Job Pricing Process ...........................................................................................................................26 Job Pricing...............................................................................................................................................27 Salary Structure Generation......................................................................................................................29 Generating Salary Structures..................................................................................................................30 Salary Structure Maintenance...................................................................................................................31 Maintaining Salary Structures .................................................................................................................32 Budgeting....................................................................................................................................................33 Budget Unit .................................................................................................................................................35 The Budgeting Process .............................................................................................................................37 Budget Structure Maintenance................................................................................................................39 Create Budget Structure ....................................................................................................................40 Creating a Budget Structure .........................................................................................................41 Change Budget Structure ..................................................................................................................42 Copy Budget Structure .................................................................................................................43 Copying a Budget Structure ....................................................................................................44 Copying an Organizational Structure ......................................................................................45 Extend Validity ..............................................................................................................................47 Extending a Budget's Validity ..................................................................................................48 Budget Administration .............................................................................................................................49 Display Budget Structure ...................................................................................................................50 Displaying a Budget......................................................................................................................51 Editing a Budget Value ......................................................................................................................52 Entering a Budget Amount............................................................................................................53 Changing a Budget Amount..........................................................................................................54 Release a budget...............................................................................................................................55 Checking a Budget .......................................................................................................................56 Releasing a Budget ......................................................................................................................57 Compensation Administration ..................................................................................................................58 Compensation Administration Process...................................................................................................60 Compensation Packaging .........................................................................................................................62

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Compensation Management (PA-CM)

Compensation Category .........................................................................................................................63 Compensation Components....................................................................................................................64 Fixed Compensation Components ....................................................................................................65 Variable Compensation Components ................................................................................................66 Eligibility......................................................................................................................................................67 Eligibility Rules ........................................................................................................................................68 Eligibility Group .......................................................................................................................................69 Compensation Adjustment Eligibility Infotype (0381) .............................................................................70 Guidelines ...................................................................................................................................................71 Guidelines ...............................................................................................................................................72 Adjustments................................................................................................................................................73 Compensation Adjustment Types ...........................................................................................................74 Compensation Adjustment Infotype (0380).............................................................................................75 Adjustment Reason.................................................................................................................................77 Adjusting Compensation for Employees .................................................................................................78 Adjusting Compensation Using Mass Maintenance Tool ..................................................................79 Excel Worksheet for Compensation Adjustments ........................................................................80 Adjust Compensation Using Manager's Desktop ..............................................................................82 Configuring Manager's Desktop for Compensation Management................................................83 Adjust Compensation After Completing an Appraisal........................................................................84 Displaying a Compensation Adjustment .................................................................................................85 Activate Adjustments...............................................................................................................................86 Long-Term Incentives ................................................................................................................................88 Long-Term Incentive Plans .......................................................................................................................89 Awards Infotype 0382 ................................................................................................................................90 Long-Term Incentives Administration .....................................................................................................91 Granting Awards .....................................................................................................................................93 Display Granted Awards .........................................................................................................................95 Exercising Awards...................................................................................................................................96 Display Exercised Awards.......................................................................................................................97 Expiring/Forfeiting ...................................................................................................................................98 Canceling Awards .................................................................................................................................100 Life Events.............................................................................................................................................101 Processing Life Events ....................................................................................................................102 Pay scale changes ...................................................................................................................................104 Display Pay Scale Structure (Report RHPAYSC0) ................................................................................105 Time Spent in Pay Scale Group/Level (Report RPLTRF00) .................................................................106 Defaults for Pay Scale Reclassification (Report RPLTRF10)...............................................................107 Reports in Compensation Management ................................................................................................109 Employee Compensation Data................................................................................................................110 Total Compensation Statement ............................................................................................................111 Total Compensation Statement – Mass Printing (Report RHCMPTCS_PRINT)..................................112 Defaults for Pay Scale Reclassification (Report RPLTRF10) ...............................................................113 Time Spent in Pay Scale Group/Level (Report RPLTRF00).................................................................115 Compa-Ratios (Report RHCMPR0) ......................................................................................................116 Comparing Actual Basic Salaries and Planned Compensation ............................................................118 Pay Structure ............................................................................................................................................119 Salary Structure for Jobs (Report RHCMPJOBPLCOMP)....................................................................120 Display Pay Grade Structure (Report RPLCMP01) ..............................................................................121

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Display Pay Scale Structure (Report RHPAYSC0)...............................................................................122 Planned Labor Costs (Report RHXSOLO0)..........................................................................................123 Salary Surveys..........................................................................................................................................124 Data Extractor for Salary Surveys(Query SALSURVEY_EXT).............................................................125 Hay PayNet: Data Extraction for Salary Surveys (SALSURVEY_HAY) ...............................................128 ESS Services in Compensation Management .......................................................................................131 Executing Salary Surveys .......................................................................................................................132 Displaying a Total Compensation Statement ........................................................................................133 Exercising Awards ...................................................................................................................................134

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Compensation Management (PA-CM) Compensation Management (PA-CM)

Compensation Management (PA-CM)
Purpose
Compensation is a key factor in attracting and keeping the best employees and ensuring that your organization has the competitive edge in an increasingly competitive world. The Compensation Management component enables you to differentiate between your remuneration strategies and those of your competitors while still allowing flexibility, control and cost effectiveness. It provides a toolset for strategic remuneration planning that reflects your organization culture and pay strategies, and it empowers line managers within a framework of flexible budget control. Compensation Management allows you to control bottom-line expenditures and offer competitive and motivating remuneration, be it fixed pay, variable pay, stock options, merit increases, or promotion – in other words, total compensation. In brief, you can use this component to perform: · · · · · · Create centralized and decentralized budgets Plan and administer compensation adjustments at the manager level Plan and administer compensation adjustments within budget Performing Job Pricing Define pay grades and salary structures to identify the internal value of jobs and positions in your organization Administer long-term incentives

Integration
To use Compensation Management, you must install: · · The Personnel Administration component so that you can access and update employee master data The Organizational Management component so that you can define an organizational structure for budgeting and selecting employees

If you want to use performance appraisal results stored in the Appraisal System, then you must install the Personnel Development's Appraisals component.

Features
Compensation Management comprises the following components: · Job Pricing [Page 21] You can use this component to store and manipulate results from external job evaluation systems, and data from external marketing surveys. You can then use this data as a starting point for building salary structures that you can associate with jobs and positions in your organization. This component allows you to identify the internal worth of jobs and positions in your organization. · Budgeting [Page 33]

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Compensation Management (PA-CM) Compensation Management (PA-CM)

SAP AG

You can use this component to allocate monetary amounts or non-monetary amounts, for example, a number of shares, to a particular department, subsidiary, or plant within your organization. You can also use it as a control mechanism to make sure that you stay within the budget amount allocated when you administer compensation adjustments. · Compensation Administration [Page 58] You can use this component to plan and administer compensation adjustments, such as salary increases, bonuses, long-term incentives either across the board or in accordance with the corporate compensation policy and eligibility criteria. This component also enables you to distribute adjustments at the employee by allowing you to overwrite the prescribed adjustment manually. The additional employee information provided supports and facilitates the decision-making process. The control mechanisms built into the component warn you immediately if your planning is inconsistent or has exceeded the allocated budget. See also: The Compensation Management Process [Page 11]

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Compensation Management (PA-CM) Compensation Management (PA-CM)

Compensation Management (PA-CM)
Purpose
Compensation is a key factor in attracting and keeping the best employees and ensuring that your organization has the competitive edge in an increasingly competitive world. The Compensation Management component enables you to differentiate between your remuneration strategies and those of your competitors while still allowing flexibility, control and cost effectiveness. It provides a toolset for strategic remuneration planning that reflects your organization culture and pay strategies, and it empowers line managers within a framework of flexible budget control. Compensation Management allows you to control bottom-line expenditures and offer competitive and motivating remuneration, be it fixed pay, variable pay, stock options, merit increases, or promotion – in other words, total compensation. In brief, you can use this component to perform: · · · · · · Create centralized and decentralized budgets Plan and administer compensation adjustments at the manager level Plan and administer compensation adjustments within budget Performing Job Pricing Define pay grades and salary structures to identify the internal value of jobs and positions in your organization Administer long-term incentives

Integration
To use Compensation Management, you must install: · · The Personnel Administration component so that you can access and update employee master data The Organizational Management component so that you can define an organizational structure for budgeting and selecting employees

If you want to use performance appraisal results stored in the Appraisal System, then you must install the Personnel Development's Appraisals component.

Features
Compensation Management comprises the following components: · Job Pricing [Page 21] You can use this component to store and manipulate results from external job evaluation systems, and data from external marketing surveys. You can then use this data as a starting point for building salary structures that you can associate with jobs and positions in your organization. This component allows you to identify the internal worth of jobs and positions in your organization. · Budgeting [Page 33]

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Compensation Management (PA-CM) Compensation Management (PA-CM)

SAP AG

You can use this component to allocate monetary amounts or non-monetary amounts, for example, a number of shares, to a particular department, subsidiary, or plant within your organization. You can also use it as a control mechanism to make sure that you stay within the budget amount allocated when you administer compensation adjustments. · Compensation Administration [Page 58] You can use this component to plan and administer compensation adjustments, such as salary increases, bonuses, long-term incentives either across the board or in accordance with the corporate compensation policy and eligibility criteria. This component also enables you to distribute adjustments at the employee by allowing you to overwrite the prescribed adjustment manually. The additional employee information provided supports and facilitates the decision-making process. The control mechanisms built into the component warn you immediately if your planning is inconsistent or has exceeded the allocated budget. See also: The Compensation Management Process [Page 11]

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Compensation Management (PA-CM) The Compensation Management Process

The Compensation Management Process
Purpose
This is a common business process used by compensation departments to plan and administer compensation policies.

Prerequisites
If you want to run compensation management over the organizational structure then, you must create your organizational structure and all necessary organizational units before you start the compensation management process.

Process Flow
When you have created your organizational structure, you can begin the compensation process: 1. Define the internal value of jobs and positions. You can enter data from external job evaluation systems and salary surveys. 2. Define compensation components and group them 3. Define guidelines and eligibility rules and associate them to the plans 4. Perform budgeting for compensation management 5. Plan and administer compensation policies 6. Approve compensation adjustments 7. Administer approved compensation

Result
The system updates employees’ records with data provided by the Compensation Management component, and the employees receive the corresponding compensation adjustments.

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Compensation Management (PA-CM) Working with the Object Manager

SAP AG

Working with the Object Manager
Purpose
The Object Manager provides you with various transactions and components with which you can easily and comfortably search for and select employees. In Compensation Management, you use the Object Manager to search for persons whose data you want to display or edit. Thus, the Object Manager is connected to the following transactions: · · · · Displaying/changing compensation adjustments Displaying/changing award granting Displaying/changing award exercising Displaying/printing Total Compensation Statements

The user interface for these transactions is divided into various screen areas, each of which has a particular function.

Search Area

Overview Area

Selection Area

Together, the Search area and the Selection area form the Object Manager [Page 14]. Transaction-specific functions are carried out for selected persons in the Overview area.

Every time you execute a transaction, an updated list is displayed in the Selection area, according to the search criteria. This also applies if you have saved a search as a favorite.

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Compensation Management (PA-CM) Working with the Object Manager

Process Flow
The following are steps involved in a typical process: 1. Search [Ext.] for one or more persons you want to display or edit in the Search area. 2. The selected persons are listed in the Selection area. Double-click on a person to display him or her in the Overview area. 3. Transaction-specific functions (compensation adjustments, for example) are carried out for selected persons in the Overview area. See also: Using Search Functions [Ext.]

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Compensation Management (PA-CM) Object Manager

SAP AG

Object Manager
Use
With the object manager you can search for and select objects that you want to display or edit.

Prerequisites
You are familiar with the validity concept of the application. The validity concept determines which objects you can find during a search.

Features
The object manager consists of the search area and the selection area.

Search Area

Selection Area

·

In the search area are one or more search functions for each object type, for example the Search Term and Structure Search functions. These search functions are marked with . In addition, the object type itself can contain a search function. The object types are marked with the respective object type-specific symbol.

If necessary, you can add more object types and search functions in customizing. You can also change the sequence of the search functions. For further information see the Implementation Guide (IMG) under Personnel Management ® Global Settings in Personnel Management ® Settings for Object Manager or the IMG for Organizational Management.

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Compensation Management (PA-CM) Object Manager

· · · ·

In the search area you can create search variants, so that you can reuse search criteria you have grouped together, or hits. These search variants are marked with . In the selection area the system displays the objects that you searched for and actually found. According to the search function, this can be either a hit list or a structure. You can scroll through search results in the selection area using and .

You can completely hide or display the object manager, so that the other screen areas get correspondingly bigger or smaller. To do that, choose Settings ® Show Object Manager or Hide Object Manager. With you can increase or reduce the size of the selection area, in order to show more hits. As you do that, the search area is hidden or displayed accordingly.

·

The system saves the last settings relating to screen size and the last object selection user-specifically, and they are available next time you call up the transaction. You can reset these settings and the last object selection using the report RH_DELETE_OM_USER_SETTINGS. Note that the reset takes place across all applications. For more information, see the report documentation.
·

You can call up generic object services for a selected object using the right mouse button menu. To do that, select an object in the selection area with the right mouse button and choose Generic Object Services. For further information about generic object services, see List of Object Services [Ext.].

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Compensation Management (PA-CM) Searching for/Selecting Objects

SAP AG

Searching for/Selecting Objects
Use
There are various search functions available, for example:
· · · ·

User view Search term Free search Collective Search Help

Prerequisites
Object you are searching for must exist already. Create new objects if required. The object types and search functions are set up.

Procedure
1. Select one of the search functions from the Search area and enter search criteria as required. All the objects of the object type concerned which are found, are displayed either as a list or a structure in the Selection area. 2. Select an object by double-clicking on it.

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Compensation Management (PA-CM) Using Search Functions

Using Search Functions
Use
The search functions you can use for the object type Person allow you to search for persons in various ways. These search functions are indicated thus: The object type Person can also contain a search function. The object type Person is indicated by the object type-specific symbol .

Procedure
Searching for Persons Using the User View
Use the user view if you
· ·

are a line manager and wish to adjust compensation for the employees in your area of responsibility are a compensation manager and wish to adjust compensation for the employees in your area of responsibility The Search for Persons dialog box appears.

1. Choose User view 2. Select either Line manager or Compensation manager and choose Search 3. Select the person from the Selection area by double clicking on him/her.

Searching for Persons using a Search Term
1. Choose Search term (or Person, if this object type has this function) The Search for Persons dialog box appears. 2. Enter a description. This can be a last name or a personnel number. You can also make masked (M++er, for example) or generic (M*) entries. 3. Choose
Search

The results of the search are displayed in the Selection area. The display in the overview area and the detail area does not change. 4. You can search for additional persons as required and add the results to the first set of results in the Selection area by choosing Add. 5. Select the person from the Selection area by double clicking on him/her.

Searching for Persons Using Free Search
The Free Search search function uses the InfoSetQuery. 1. Choose Free Search The HR Object Selection dialog box appears For more information, see Selection [Ext.] . The results of the search are displayed in the Selection area. 2. Select the person from the Selection area by double clicking on him/her.

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Compensation Management (PA-CM) Using Search Functions

SAP AG

Searching for Persons Using Collective Search Help
1. Choose Collective search help A dialog box appears, displaying a number of elementary search helps (organizational assignment, for example). 2. Enter your search in one of the fields available for an elementary search help. You can also make masked (M++er, for example) or generic (M*) entries. 3. Choose The results of the search are displayed in the Selection area. The display in the overview area and the detail area does not change. 4. You can search for additional persons as required and add the results to the first set of results in the Selection area by choosing Add. 5. Select the person from the Selection area by double clicking on him/her.

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Compensation Management (PA-CM) Using Search Variants

Using Search Variants
Use
In some search functions, for example Search Term, you can restrict the number of hits by using a combination of selection criteria. You can then save such a combination as a search variant so that you can use it again. You can also delete a search variant again, if necessary.

Procedure
Creating Search Variants
1. Use one of the search functions to search for objects. The system displays the hits in the selection area. 2. Choose and enter a name. Choose . .

The system saves the search criteria as a search variant and assigns them to the corresponding object type in the search area. The search variant is marked with 3. Select the search variant you created and choose

. You can check your search criteria.

Searching for Objects Using a Search Variant
1. Select a search variant. The hits are displayed in the selection area. 2. Double-click on the required object.

Deleting Search Variants
1. Select the search variant that you want to delete. 2. Choose .

The search variant is deleted.

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Compensation Management (PA-CM) Configuring Columns

SAP AG

Configuring Columns
Use
You can decide which columns should be displayed in different screen areas.

Prerequisites
The columns that are available are determined in Customizing. For further information see the Implementation Guide (IMG) under Personnel Management ® Global Settings in Personnel Management ® Column Framework or the IMG for Organizational Management.

Procedure
1. Choose . The Column configuration dialog box appears. 2. Select the columns that you want to display. Some entries represent column groups, that is, more than one column will be displayed if you select one of these entries. 3. Confirm your entries by choosing .

Result
The columns you selected are displayed.

You can reset all of a user’s column configurations using the report RH_DELETE_COL_USER_SETTINGS. Note that the reset takes place across all applications. For more information, see the report documentation.

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Compensation Management (PA-CM) Job Pricing

Job Pricing
Purpose
Use this component to define a competitive compensation policy by storing job evaluation results and market data in the Job Pricing component. Use these results as the basis on which to build suitable salary structures for your organization. You can use the external market data as a basis on which to calculate your organization’s competitive position and to plan and implement any corrective actions required. This component supports compensation-related data at the job and position level and provides both reporting capabilities as well as maintenance functions for salary structures and jobs. In brief, you can use this component to perform:
· · · ·

Store and manipulate information from external job evaluation systems and salary surveys Generate and maintain salary structures Define pay grades and levels Run statistics programs to evaluate and compare jobs and job-related data

Implementation Considerations
Install this component if you want to generate salary structures based on external and internal information, and associate salary structures with the jobs and positions in your organization. This allows you to identify the internal worth of these jobs and positions.

Integration
To use this component, you must install:
· ·

The Personnel Administration component so that you can access and update employee records. The Organizational Management component so that you can define an organizational structure and create jobs and positions.

See also:

The Job Pricing Process [Page 26] Performing Job Pricing [Page 27] Salary Structure Generation [Page 29] Salary Structure Maintenance [Page 31] Survey Data Extraction [Page 124]

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Compensation Management (PA-CM) Planned Compensation Infotype (1005)

SAP AG

Planned Compensation Infotype (1005)
Definition
This infotype uses the salary and pay scale structures to create planned compensation data at the job and position level. The system uses the information stored to suggest default values for the Basic Pay infotype (0008).

Use
When you maintain an employee’s basic pay record, you can use the Planned Compensation infotype (1005) to suggest default values that are based on pay grade or pay scale data stored for the job or position occupied by the employee. If the pay grade data is maintained, the system checks the amount entered in the Basic Pay infotype (0008) against the salary range specified for that pay grade in the Pay Grade table.

Because compensation varies from country to country, you can create a number of planned compensation records for one job. When you change an employee’s basic pay record, the system checks if there is a salary structure for the country grouping. If there is a salary structure, the system uses the information stored for the salary structure. In addition to this, you can use Planned Labor Costs [Page 123] report (RHSOLO00) to calculate the planned labor costs for the organizational unit specified. This report uses the information stored in the Planned Compensation infotype (1005) as the basis for its calculations. You can also compare the actual base salary that an employee receives to the salary range assigned to the job or position that the employee holds by running the Compare Actual Base Salaries with Planned Compensation [Page 118] report (RHCMPcompare_actual_planned).

Structure
The Planned Compensation infotype (1005) is divided into three planned compensation types:
· · ·

Pay grade Pay scale Direct

Pay grade
You can store information from the salary structure, such as the pay grade and pay grade level. You can enter the pay grade and pay grade level that the job or position is to be assigned to. The system suggests the salary range, that is the lowest and highest amount that will be paid for the job or position and the reference salary.

Pay scale
You can store information from the pay scale structure, such as the pay scale area, type, group, and level. The system then suggests the minimum and maximum salary or wage for the job or position.

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Compensation Management (PA-CM) Planned Compensation Infotype (1005)

Because you cannot store a wage type on this infotype, you can only assign pay scales that do not have a wage type, to jobs and positions in this infotype.

Direct
You can enter the minimum and maximum amounts paid for a job and position, the currency and the unit of time. Use this planned compensation type if you do not have a salary or a pay scale structure.
See also:

Salary Structure for Jobs [Page 120]

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Compensation Management (PA-CM) Job Evaluation Results Infotype (1050)

SAP AG

Job Evaluation Results Infotype (1050)
Definition
This infotype stores the results of the job evaluation for the jobs/positions in your organization.

Use
Use the job evaluation results to determine the relative worth of each job and position in your organization. You can also use this infotype to indicate whether the job is a benchmark job

Structure
This infotype is divided into subtypes. Use the subtypes to represent different job evaluation systems. This allows you to store different sets of job evaluation results.

Subtype EV01 = Hay System Subtype EV02 = In-house job evaluation system Subtype EV03 = John Smith consultants

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Compensation Management (PA-CM) Salary Survey Results Infotype (1051)

Salary Survey Results Infotype (1051)
Definition
This infotype stores the results of the surveys. This includes information such as the average base salary and average bonus. Salary surveys allow you to convert the worth of jobs and positions in your organization into dollars, pounds, euros, etc.

Use
Use surveys to compare salaries in your organization to salaries paid for similar jobs in similar organizations.

Structure
This infotype is divided into subtypes. Use the subtypes to represent different types of salary surveys. This allows you to store different sets of survey results.

Subtype SV01 = Survey comparing your organization with organizations in the same or related business Subtype SV02 = Survey comparing your organization with organizations in the same geographical area Subtype SV03 = Survey comparing your organization with organizations of a similar size

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Compensation Management (PA-CM) The Job Pricing Process

SAP AG

The Job Pricing Process
Purpose
Job pricing provides the basis for generating salary structures from internal and external information about the jobs and job functions within an organization. This process allows you to create compensation-related infotype records at the job and position level. Job pricing currently uses the following infotypes: Job Evaluation Results Infotype (1050) [Page 24] Salary Survey Results Infotype (1051) [Page 25] Planned Compensation Infotype (1005) [Page 22]

Prerequisites
Before you can store job evaluation results and salary survey data at the job level, you must have:
· ·

Jobs in the SAP R/3 System Salary surveys and job evaluation results

Process Flow
1. Select the jobs you want to edit. 2. Store the compensation-related at the job level, that is, create infotype records for the jobs and positions using the infotypes provided. 3. Determine the internal worth of the jobs and positions in your organization based on internal and external data available. 4. Associate the jobs and positions to pay grades. 5. Generate your salary structures based on this data.
See also:

Performing Job Pricing [Page 27] Salary Structure Generation [Page 29] Salary Structure Maintenance [Page 31]

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Compensation Management (PA-CM) Job Pricing

Job Pricing
Prerequisites
To perform job pricing, the following must exist in the SAP R/3 System:
· ·

Jobs and positions Organizational units, if you want to perform job pricing over the organizational unit

Procedure
1. From the Compensation Management screen, choose Administration ® Job pricing The Compensation Management - Job Pricing screen appears 2. Decide whether you want to perform job pricing for all your jobs at once or per organizational unit. 3. Enter data as required and choose The system displays a list of jobs together with the following information per job:
-

Job name Number of positions associated with the job Evaluation group Benchmark job indicator Evaluation points Job code Average basic salary

4. To create and change the job pricing data, select the relevant jobs and choose The Compensation Management - Job Pricing dialog box appears. Each tab in the tab strip represents an infotype record. 5. Enter data as required in each tab and scroll through the jobs selected by choosing 6. To create an infotype record for a particular job, choose and enter the relevant data or

7. To change data contained in an infotype record for a particular job, choose 8. Once you are happy with the data, choose to exit the dialog box.

Result
You have now successfully completed job pricing and have entered all the necessary compensation-related data for each job. You can now use this data to generate your salary structures.
See also:

Salary Structure Generation [Page 29]

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Compensation Management (PA-CM) Job Pricing

SAP AG

Salary Structure Maintenance [Page 31]

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Compensation Management (PA-CM) Salary Structure Generation

Salary Structure Generation
Use
The salary structure generation tools allow you to simulate and generate salary structures based on compensation-related data stored at the job level.

Integration
Once generated, the system stores the salary structures as pay grades and pay grade levels in the relevant table. You can then use the Planned Compensation infotype (1005) to assign these grades and levels to the jobs in your organization.

Features
You can display the salary structures using SAP Business Graphics.

Prerequisites
If you want to use the results of salary surveys and job evaluation systems as the basis for generating your salary structures, you must create a Job Evaluation Results Infotype (1050) [Page 24] record and a Survey Results Infotype (1051) [Page 25] record for each of your jobs.

Activities
You must decide:
· · · · · ·

How many pay grades you want in your salary structure What percentage of the market reference salary you want to pay What the distance between the grades should be How many pay grade levels you want per pay grade What the distance between the pay grade levels should be How wide the levels should be

The system then calculates the salary ranges for all the pay grades and pay grade levels in accordance with the data that you entered, and generates the corresponding salary structure.
See also:

Generating Salary Structures [Page 30] Salary Structure Maintenance [Page 31] Display Salary Structure [Page 121]

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Compensation Management (PA-CM) Generating Salary Structures

SAP AG

Generating Salary Structures
Prerequisites
You have created a Job Evaluation Results Infotype (1050) [Page 24] record, a Survey Results Infotype (1051) [Page 25] record, and a Planned Compensation Infotype (1005) [Page 22] record for your jobs using the job pricing functions.

Procedure
1. On the Compensation Management - Job Pricing screen, select the job(s) whose average basic salary you want to use as the reference point and then choose Extras ® Generate salary struc. The Generate Salary Structure dialog box appears 2. Enter data as required and choose The system generates a salary structure in accordance with your input parameters and displays the results as a list. 3. On the Generate Grades – Result screen, you can change the values manually. To do this, select a pay grade and choose Edit ® Select The Postprocess values generated dialog box appears 4. Change the values as required and choose 5. Save your salary structure

Because the salary structures are stored in the pay grade table, you need to assign your salary structure to a country grouping, a pay grade type and an area. You must also specify a validity period.

Result
You have generated a salary structure and saved the results on the database. You can now assign the salary structure to the jobs and positions in your organization and you can also use the structure maintenance tools to modify the values. For more information, see Salary Structure Maintenance [Page 31].

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Compensation Management (PA-CM) Salary Structure Maintenance

Salary Structure Maintenance
Use
The salary structure maintenance tools allow you to manipulate the salary structures directly.

Prerequisites
Before you can use the salary structure maintenance tools, you need to create salary structures. You can use either standard view maintenance via the Implementation Guide or the salary structure generation tool to create your salary structures.

Features
The salary structure maintenance tool allows you to adjust several entries in the pay grade table by a percentage and/or an amount.

Activities
User
· · ·

Selects the entries in the salary structure to be changed Enters the amount and/or percentage by which the pay grade should be changed Specifies the date on which the changes become effective

System
· · ·

Calculates the adjustments to the pay grades and levels Creates new entries as of the key date Delimits the old entries

See also:

Maintaining Salary Structures [Page 32] Salary Structure Generation [Page 29] Display Salary Structure [Page 121]

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Compensation Management (PA-CM) Maintaining Salary Structures

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Maintaining Salary Structures
Prerequisites
You have created salary structures either directly using standard view maintenance via the Implementation Guide or using the salary structure generation tools.

Procedure
1. On either the Compensation Management - Job Pricing screen or on the Generate Pay Grades - Results screen, choose Goto ® Maintain salary struc. You branch into the "Pay Grades" view in display mode. 2. Choose change. to change into the change mode and select the entries that you want to

3. Choose Change amounts The Increase by Amount dialog box appears 4. Enter data as required 5. Choose 6. Save your entries

Result
The system delimits the pay grades that you selected and creates new pay grades that become effective as of the key date. The system also changes the pay grade levels accordingly.

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Compensation Management (PA-CM) Budgeting

Budgeting
Purpose
You can use the budgeting tool to allocate both monetary and non-monetary funds to a particular organizational unit within your organization. Whether you want to plan your entire budget or use a more detailed budget structure and perform budgeting using the organizational structure, this component is flexible enough to encompass a variety of budget planning methods which you can process graphically. This component provides the basis for Compensation Administration. The Compensation Administration component accesses the budget values created for organizational units. The compensation administrator uses these values to determine compensation adjustments (pay increases, bonuses, etc.) for the employees whose compensation is under review. In brief, you can use this component to perform:
· · · · ·

Create budget units and structures Finance organizational units Change budget structures and values Copy budget structures and organizational structures Release budgets

Implementation Considerations
Install this component if you want to perform compensation budget planning and administration.

Integration
To perform budgeting over the organizational structure, that is, to assign organizational units to budgets units, install the Organizational Management component. If you want to use the budget values as the basis of administering and planning compensation packages for employees, you must install the Organizational Management component so that you have the necessary employee, job, position and organizational unit data. Integration with the Organizational Management component also acts as a control mechanism to make sure you stay within budget when administering compensation awards via the organizational unit.

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Compensation Management (PA-CM) Budgeting

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The budget units in the Compensation Management component are solely used to distribute amounts and quantities when you plan and administer adjustments for a group of employees. You cannot use these budget units to track changes that occurred as a result of a new indirect valuation or a change in the employee's capacity utilization level.

Features
Budgeting has a roll-up feature that allows you to use a bottom-up process to submit the budget, and a top-down process to approve the budget.

Budget units are displayed in a hierarchical structure. The Budgeting component has two display options you can use when changing and displaying budgets:
· ·

The Budget distribution view Displays the budget structure. In this view, you can only work with the budget units. The Financing view Displays the budget structure and the corresponding organizational structure. In this view, you can assign financed objects to the budget units and determine what the budget unit finances.

See also:

The Budgeting Process [Page 37] Budget Structure Maintenance [Page 39] Budget Administration [Page 49]

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Compensation Management (PA-CM) Budget Unit

Budget Unit
Definition
In the Compensation Management Budgeting component, a budget unit defines funds used for compensation.

Use
Use a budget unit to finance an organizational unit, and as a basis for compensation planning and administration.

Structure
A budget unit includes the following attributes:
Attribute Definition

Plan version Budget type Abbreviation Name Budget period Object ID Status

Defines where the information is stored Determines the type of budget Identifies the budget object Describes the budget object Defines the period for which the budget is planned Assigned either automatically or manually when the object is created Determines the stage of the budget process

Budget type group Identifies the application component to which the budget type belongs

Integration
When the budget unit is created, you can enter amounts and quantities. You can create relationships between budget units – this creates the hierarchical structure with superior and subordinate budgets – and between a budget unit and a financed object, for example, an organizational unit.

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Compensation Management (PA-CM) Budget Unit

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A budget unit can finance more than one organizational unit.

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Compensation Management (PA-CM) The Budgeting Process

The Budgeting Process
Purpose
You can use this process to create one or several budgets that can be used by the Compensation Management component for compensation planning and administration.

Prerequisites
Before you start the budgeting process, you must create budget units. If you want to create links between budget units and financed objects, you must create an organizational structure.

Process Flow
When you have created your budget structure and, if required, your organizational structure, you can begin budget planning: 1. You create a budget structure, that is made up of one or more budget units. The budget has the status “planned” 2. Define budget to budget relationships (optional) 3. Define budget to financed object relationships (optional) 4. Edit budgets 5. Roll up budget amounts (optional) 6. Check budgets 7. Clear error log 8. When you are happy with the figures, you can release the budget structure. The budget now has the status active and cannot be changed.
Budgeting Process Functions Choose If you want to

Create

Create budget units and structures Enter budget amounts and quantities Copy a budget structure Copy an organizational structure Extend the budget's validity Delete budget units and budget structures Check the budget structure's consistency Release a budget

Change Define budget to budget and budget to financed object relationships

Display Display your budget structure together with amounts and quantities and status

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Compensation Management (PA-CM) The Budgeting Process See also:

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Structure Maintenance [Page 39] Budget Administration [Page 49]

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Compensation Management (PA-CM) Budget Structure Maintenance

Budget Structure Maintenance
Use
The structure maintenance tools allow you to:
· · · · · · ·

Create budget units and budget structures Create budget to budget and budget to financed object relationships Change budget structures Copy budget structures Copy organizational structures Enter amounts and quantities for the budget units Extending a Budget's Validity

Prerequisites
If you want to link your budget units to organizational units, so that the budget unit finances the organizational unit, you must create the necessary organizational units prior to performing budgeting.

Features
You can use these tools to create a budget structure analogous to your existing organizational structure. You can also extend the validity of an existing budget structure that has already been released and accessed by the compensation administration component.
See also:

Create Budget Structure [Page 40] Change Budget Structure [Page 42] Copy Budget Structure [Page 43] Extend Validity [Page 47] Budget Administration [Page 49]

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Compensation Management (PA-CM) Create Budget Structure

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Create Budget Structure
Use
This determines the budget structure's basic data. This includes:
· · ·

Budget type, for example, bonus, salary, stock Budget abbreviation and name Budget period

Integration
When you have created your budget structure, you can use the change, display, release, and copy budget functions.

Activities
User
· · ·

Decides what type of budget structure to create Enters necessary data Manually assigns a number to the budget structure if using external number assignment

System
·

Assigns a number to the budget structure if internal number assignment is used for identifying the budget object.

See also:

Creating a Budget [Page 41] Change Budget Structure [Page 42]

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Compensation Management (PA-CM) Creating a Budget Structure

Creating a Budget Structure
1. Choose Human resources ® Personnel management ® Compensation management The Compensation Management screen appears. 2. Choose Budgeting ® Structure ® Create The Create Budget Structure: Initial Screen appears 3. Enter data as required and choose

Result
The system creates a budget structure containing a single budget unit and displays a message. You can now extend the budget structure, assign organizational units to the budget units, and enter amounts and quantities.
See also:

Change Budget Structure [Page 42] Budget Administration [Page 49]

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Compensation Management (PA-CM) Change Budget Structure

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Change Budget Structure
Use
In the structure change mode, you can:
· · · · · · ·

Change the budget structure Define budget to budget and budget to financed object relationships Copying a Budget Structure Copying an Organizational Structure Extend a budget structure's validity Edit budget values Delete budget units and structures

Prerequisites
Before you can make any changes to a budget structure, you must first create it. For more information, see Creating a Budget Structure [Page 41]

Features
Within the change function, you can now create an budget structure analogous to your organizational structure by copying the organizational structure. You can also extend the validity period of an existing budget structure, thus allowing you to reuse a budget that has already been released. The delete function has been enhanced. You can now delete partial budget structures.
See also:

Copy Budget Structure [Page 43] Extend Validity [Page 47] Budget Administration [Page 49]

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Compensation Management (PA-CM) Copy Budget Structure

Copy Budget Structure
Use
You can either use this function to copy a budget structure from one budget period to another and from one budget type to another or to create a budget structure by copying an existing organizational structure. This means you do not have to create the budget structure from scratch in order to create a budget for a different period or budget type. Copy a budget and use the change functions to update it. Because you can copy substructures and entire budget/organizational structures, use this function if:
· · · ·

Your budget structure has not changed You want to create the same budget structure for a different budget period You want to create the same budget structure for a different budget type You want to create a budget structure analogous to your organizational structure

Features
This function has the following copy options:
· · ·

Budget amounts or quantities Financing relationships Organizational structure depth

The options allow you to copy budget structures and their amounts or quantities or the budget structures and the objects they finance. The organizational structure depth option allows you to decide how many levels you want to copy, starting from the root object.
See also:

Copying a Budget Structure [Page 44] Copying an Organizational Structure [Page 45]

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Compensation Management (PA-CM) Copying a Budget Structure

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Copying a Budget Structure
1. On the Compensation Management screen, choose Budgeting ® Structure ® Change The Change Budget Structure: Initial Screen appears 2. Choose 3. Enter the type and the name or abbreviation of the budget structure you want to copy. 4. Select a budget type – if it differs from the original budget – and a budget period for the copied budget. 5. Select a copy option, and choose The system copies the budget structure and all its subordinate budget units and depending on the copy options selected, the objects financed by the budget units.
See also:

Copying an Organizational Structure [Page 45]

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Compensation Management (PA-CM) Copying an Organizational Structure

Copying an Organizational Structure
1. On the Compensation Management screen, choose Budgeting ® Structure ® Create The Create Budget Structure: Initial Screen appears 2. Choose 3. On the Generate Budget Structure screen, enter the name of the organizational unit that you want to copy. 4. Select a budget type and a budget period for the budget structure that you want to create. 5. Enter data as required in the Options section 6. Set the Use organizational unit's relationship period indicator if you want the system to take relationship period between the root organizational unit and the subordinate organizational unit into consideration. Do not set this indicator if you want the system to use the period in which both the organizational unit and the corresponding budget unit exist.

Object

Validity Period

Org. unit O1 Org. unit O2 Relationship O1 - O2 Budget unit BU1 Budget unit BU2 Relationship BU1 - BU2

01.01.1998 - 01.10.1998 01.03.1998 - 01.11.1998 01.05.1998 - 01.07.1998 01.01.1998 - 31.12.1998 01.01.1998 - 31.12.1998 01.01.1998 - 31.12.1998

If the indicator is set, the relationships between the budget units and the organizational units will have the following validity periods:
Relationship Validity Period

BU1 - O1 BU2 - O2

01.02.1998 - 01.10.1998 01.05.1998 - 01.07.1998

If the indicator is not set, the relationships between the budget units and the organizational units will have the following validity periods:
Relationship Validity Period

BU1 - O1 BU2 - O2 7. Choose

01.02.1998 - 01.10.1998 01.03.1998 - 01.11.1998

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Result
The system copies the organizational structure and creates the corresponding budget structure. The system automatically assigns the organizational units to the corresponding budget units. The system gives the budget units the same name as the organizational units that they finance.

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Compensation Management (PA-CM) Extend Validity

Extend Validity
Use
Using this function you can extend the validity period of a budget structure that has already been released.

You have created a budget structure for salary increases for the budget period 1998. You want to use this budget structure for the budget period 1999. Rather than having to create a new budget structure, you can simply extend the available one.

Prerequisites
The budget structure must already exist and have been released.

Features
You can also extend the validity of partial budget structures.
See also:

Extending a Budget's Validity [Page 48]

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Compensation Management (PA-CM) Extending a Budget's Validity

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Extending a Budget's Validity
Prerequisites
The budget structure whose validity you want to extend, has the status released.

Procedure
1. On the Compensation Management screen, choose Budgeting ® Structure ® Change The Change Budget Structure: Initial Screen appears 2. Choose
Extend validity

The Extend Budget Structure's Validity screen appears 3. Enter the type and name of the budget structure whose validity you want to extend 4. In the Validity Extension Period area, enter the new budget period. 5. Under Options, specify the budget depth, if required, and if you want to copy the budget amounts/quantities or the financing relationships or both. 6. Choose
Extend validity

Result
The system extends the budget structure's validity and you can now make changes to the budget structure and amounts/quantities.
See also:

Structure Maintenance [Page 39] Budget Administration [Page 49]

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Compensation Management (PA-CM) Budget Administration

Budget Administration
Use
The administration function is intended as more of a tool for managers and other users that have access to budget information, such as the budgets available and who do not necessarily want to have create and maintain budget structures. Use these tools to enter and manage budget amounts and quantities for existing budget structures.

You cannot use this tool to make any changes to the budget structures. You can use this tool to:
· · · · ·

Edit budget values Roll up budget amounts and quantities Display budget structures together with their amounts and quantities Check the budget structure's consistency Release the budget structure

Prerequisites
Budget structures exist.

Features
Budgeting can handle multiple currencies. You can create budget structures and budget units in different currencies and the system converts and displays the amounts in the budget reference currency that you set when you customized the Compensation Management component.
See also:

Budget Structure Maintenance [Page 39] Display Budget Structure [Page 50] Edit Budget Value [Page 52] Checking a Budget [Page 56] Release Budget [Page 55]

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Compensation Management (PA-CM) Display Budget Structure

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Display Budget Structure
Use
Use this function to display budget units and structures. You cannot change using this function.

Features
This function has two display options:
· ·

Budget distribution Financing

The options allow you to display the budget structures and their amounts or quantities (budgeting distribution) or the budget structures and the objects they finance (financing).
See also:

Displaying a Budget [Page 51]

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Compensation Management (PA-CM) Displaying a Budget

Displaying a Budget
1. On the Compensation Management screen, choose either:
Budgeting ® Administration ® Display

The Display Budget: Initial Screen appears
Budgeting ® Structure ® Display

The Display Budget Structure: Initial Screen appears 2. Enter data as required. 3. Select a display option. 4. Choose

Result
The system displays the selected budget structure and, depending on the display option selected, the budget amounts/quantities and/or financed objects.

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Compensation Management (PA-CM) Editing a Budget Value

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Editing a Budget Value
Use
Use this function to enter the amounts (for bonuses or salaries) or quantities (for stock options) for a budget unit. You can also use this function to change amounts or quantities and roll up budget amounts or quantities using the bottom-up process..

Features
You can enter a new budget amount, increase or decrease the budget by an amount, a percentage, or both. To increase or decrease a budget amount by a percentage and an amount, enter a percentage and an amount in the relevant fields in the Revalue Budget Amount dialog box. The system first increases or decreases the budget amount by the percentage. Then it adds or subtracts the amount you entered.

Revalue by an Amount and/or Percentage or Both New Budget Amount

Old budget amount 1.500,00 USD Change by % 5 % 1.575,00 Change by amount 200,00 USD 1.775,00

You can use the roll up function to add budget amounts or quantities from the bottom up. The system calculates what is required by the subordinate budget units and enters this amount or quantity in the root budget unit's amount/quantity field. To make funds available for the root budget unit and the object that it finances, simply increase the amount or quantity for this budget unit.
See also:

Entering a Budget Amount [Page 53] Changing a Budget Amount [Page 54]

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Compensation Management (PA-CM) Entering a Budget Amount

Entering a Budget Amount
1. On the Compensation Management screen, choose either Budgeting ® Structure ® Change or Budgeting ® Administration ® Change The Change Budget: Initial Screen appears 2. Enter data as required and choose The Change Budget screen appears 3. Select the budget unit for which you want to enter an amount or quantity and choose The Revalue Budget dialog box appears. 4. Enter the amount in the New budget amount/quantity field, and choose
See also:

Changing a Budget Amount [Page 54]

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Compensation Management (PA-CM) Changing a Budget Amount

SAP AG

Changing a Budget Amount
1. On the Compensation Management screen, choose either Budgeting ® Structure ® Change or Budgeting ® Administration ® Change The Change Budget: Initial Screen appears 2. Enter data as required and choose 3. On the Change Budget screen, select the budget whose amount or quantity you want to change and choose 4.
To change the amount Enter Sample Entry

By a percentage By an amount

A percentage in the Change by % field An amount in the Change by amount field

5 500,00 6,5 300,00

By a percentage and an amount A percentage in the Change by % field and an amount in the Change by amount field

To increase or decrease a budget by a percentage and an amount, enter a percentage and an amount in the relevant fields in the Revalue Budget dialog box. The system first increases or decreases the amount by the percentage. Then it adds or subtracts the amount you entered. 5. Choose The system changes the total budget amount or quantity for the selected budget unit.

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Compensation Management (PA-CM) Release a budget

Release a budget
Use
Use this function to release budgets so that Compensation Management can access this data. You can only release an entire budget structure.

When you have released your budget, you can only set the status back to planned if the budget's validity has not been extended and the budget has not been used by the financed objects.

Prerequisites
You can only release a budget structure when the error log is empty, that is, when the superior budget covers all subordinate budgets.
See also:

Releasing a Budget [Page 57]

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Compensation Management (PA-CM) Checking a Budget

SAP AG

Checking a Budget
If you are using the structure maintenance tools, choose Budgeting ® Structure ® Change and then on the Change Budget Structure screen, choose Budget structure ® Check. If you are using the administration tools, choose Budgeting ® Administration ® Change and then on the Change Budget screen, choose Budget structure ® Check. If there are no budget deficits, the system displays an appropriate message. If a root budget unit does not have enough funds to cover the subordinate budget amounts, the system displays an error log.

Working with the Error Log
Procedure
1. In the error log, select an error, and choose The Revalue Budget Amount dialog box appears 2. Enter an amount or a percentage, and choose 3. Correct all errors.

Result
Your budget structures are consistent and ready to be released.
See also:

Release Budget [Page 55] Changing a Budget Amount [Page 54]

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Compensation Management (PA-CM) Releasing a Budget

Releasing a Budget
Prerequisites
Before you can release a budget it must be consistent, that is, the error log must be empty. To release a budget, you need to be in the change mode.

Procedure
1. If you are using the structure maintenance tools, choose Budgeting ® Structure ® Change and then on the Change Budget Structure screen, choose Budget structure ® Set status ® Release If you are using the administration tools, choose Budgeting ® Administration ® Change and then on the Change Budget screen, choose Budget ® Set status ® Release 2. Confirm the system messages

Result
Your budget has status 1 (active) and can now be used by the Compensation Administration component.

You can only release entire budget structures.

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Compensation Administration
Purpose
Use this component to establish compensation methods that not only support the employee’s corporate thinking and sense of responsibility, but also reward them. The Compensation Administration component provides you with the necessary tools for strategic remuneration planning that reflects both your corporate culture and your salary policies. User-defined calculation rules and eligibility criteria mean that you can create compensation adjustments that meet your individual requirements and comply with your compensation policy. In brief, you can use this component to perform:
· ·

Distribute and change employee compensation adjustments Display employee compensation adjustments

Implementation Considerations
You can use this component to:
· · · ·

Assign compensation adjustments to employees based on eligibility criteria Plan and administer adjustments over the organizational structure Plan and administer adjustments for individuals or groups of employees Roll up remuneration distribution

Integration
To use this component, you must install:
· · ·

The Personnel Administration component so that you can access employee data and update employee records The Organizational Management component so that you can define an organizational structure for selecting employees The Budgeting component if you want to administer compensation within budget guidelines

Features
This component also comprises the following components:
·

Compensation Packaging [Page 62] Use this component to make the distinction between different types of compensation and to categorize the compensation types.

·

Eligibility [Page 67] Use this component to identify who qualifies for compensation adjustments based on a series of eligibility criteria.

·

Guidelines [Page 71] Use this component to determine how compensation adjustments are calculated or to set limits on the calculation results.

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Compensation Management (PA-CM) Compensation Administration

·

Adjustments [Page 73] Use this component in conjunction with the Compensation Administration component to determine how and when you want to distribute your compensation adjustments. You can also use this component to select which employees should participate, either at the organizational unit level or at the employee level. To simplify compensation administration, this component:

· · · ·

Allows you to perform compensation tasks, for example, increase salaries, distribute a bonus over the organizational structure Provides mechanisms for multi-level approval Allows you to store and track compensation adjustments changes using the Compensation Adjustment Infotype (0380) [Page 75] record Applies compensation adjustments for groups of employees over the organizational structure

See also:

The Compensation Administration Process [Page 60] Adjust Compensation [Ext.]

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Compensation Management (PA-CM) Compensation Administration Process

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Compensation Administration Process
Purpose
This process describes how to:
· · · ·

Award compensation adjustments for one or more organizational units or for a list of employees Submit compensation adjustments for approval Approve adjustments Activate adjustments

Prerequisites
Before you start the compensation administration process, you must have:
· · · · · ·

Completed budgeting for the necessary organizational units (optional) Defined compensation components and adjustment types Defined adjustment reasons for distributing adjustments Set up guidelines and eligibility rules (optional) Created an organizational structure Generated a list of employees using the employee selection function

Process Flow
1. Select the compensation adjustment reason and decide how you want to select your employees. 2. Generate a list of employees for the selected compensation period 3. Apply guidelines or change the values by a percentage or an amount (optional) 4. Award compensation adjustments to the employees in the list. 5. When you have processed all the employees selected, save your changes. 6. You now need to submit your adjustments for approval. 7. Your adjustments are approved and the status is changed from approved to activated. If your adjustments are rejected, they are returned to you for further processing. 8. Once your adjustments have the status approved, they can be activated.

Result
Once your adjustments are activated, the system creates new infotype records for your employees as of the compensation adjustment's effective date.
See also:

Adjusting Compensation Using the Adjustments Menu [Ext.] Activate Adjustments [Page 86]

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Compensation Management (PA-CM) Compensation Administration Process

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Compensation Management (PA-CM) Compensation Packaging

SAP AG

Compensation Packaging
Purpose
In the modern labor market, there are a variety of ways and means of rewarding your employees for work done. In order to be able to differentiate between the different types of compensation that your organization offers its employees and determine how the system handles these different types, you need to implement this component. Your organization offers the following different types of compensation:
· · · · ·

Base pay Merit pay Bonus Commissions Profit sharing

Implementation Considerations
You can use this component to:
· · ·

Differentiate between different types of compensation, by determining whether they are fixed or variable. Categorize compensation types by assigning the components to a Compensation Category [Page 63] Determine which employee record is updated as a result of the compensation administration process.

You need to implement this component in order to be able to use the Adjustments [Page 73] component.

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Compensation Management (PA-CM) Compensation Category

Compensation Category
Definition
When you have completed the compensation administration process and your adjustments have been submitted and approved, you can then activate them. When you activate your adjustments, the employees' master data records are updated with the new data. The compensation category determines which master data records are updated. Compensation categories are SAP-defined system values and cannot be changed. SAP currently supports the following categories:
Compensation Category Infotype Updated

fixed variable Long-Term Incentives
See also:

Basic Pay (0008) Basic Pay (0008), Additional Payments (0015) Long-Term Incentives (Distributed) (0382)

Compensation Adjustment Infotype (0380) [Page 75] Long-Term Incentives (Distributed) Infotype 0382 [Page 90]

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Compensation Management (PA-CM) Compensation Components

SAP AG

Compensation Components
Definition
Compensation components represent the types of compensation that you offer your employees. For example, base pay, bonuses, stock options, executive incentives. General compensation components can be further defined per compensation category and compensation area. For more information, see Compensation Category [Page 63] Fixed Compensation Components [Page 65] Variable Compensation Components [Page 66]

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Compensation Management (PA-CM) Fixed Compensation Components

Fixed Compensation Components
Definition
An organization's compensation policy is defined by the type of compensation it offers to it's employees. Fixed compensation components are used to represent compensation that affects the employee's basic pay in the SAP R/3 System.

Structure
A fixed compensation component includes the following attributes:
Attribute Definition

Compensation area Validity Period

Specifies the area for which the component applies Determines the period for which the component is valid

Integration
When fixed compensation components are applied, the system updates an employee’s basic pay infotype record (0008).

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Compensation Management (PA-CM) Variable Compensation Components

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Variable Compensation Components
Definition
An organization's compensation policy is defined by the type of compensation it offers to it's employees. Variable compensation components are used to represent compensation that is not fixed, for example, bonus payments, sales commission, performance-based pay.

Structure
A variable compensation component includes the following attributes:
Attribute Definition

Compensation area Validity Period Component category Wage type

Specifies the area for which the component applies Determines the period for which the component is valid Determines which infotype record is update Determines which wage type is inserted on the infotype record

Integration
When variable compensation components are applied, the system either updates the employee’s basic pay (0008), or additional payments record (0015).

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Compensation Management (PA-CM) Eligibility

Eligibility
Purpose
Most compensation adjustments are intended for particular groups of employees, managers, for example. You can use this component to define eligibility criteria and create eligibility rules to facilitate the distribution of compensation adjustments.

Features
You can base your eligibility criteria on when the employees were hired or how long they have been with the organization, work schedule information, and other organizational information such as number of hours worked, job, and performance. Integration to the Personnel Development component's Appraisal System means that you can use the point value results from a wide range of performance appraisals, for example, 360° feedback appraisals, personnel appraisals, etc. as a means for determining an employee's eligibility. For more information on the Appraisal System see Appraisal Systems in the Personnel Development component. You can also override the eligibility criteria at the employee level by creating a Compensation Adjustment Eligibility Infotype (0381) [Page 70] record for the employees that are eligible for compensation adjustments irrespective of the eligibility criteria set.

See also:
Eligibility Rules [Page 68] Eligibility group [Page 69] Compensation Adjustment Infotype (0381) [Page 70]

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Compensation Management (PA-CM) Eligibility Rules

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Eligibility Rules
Definition
Eligibility rules determine whether an employee receives a compensation adjustment or not. An employee must meet these criteria to qualify for the compensation adjustment. For example, an employee has to work for the company for at least one year before being eligible for bonus payments.

Use
Use eligibility rules to determine which employee qualifies for which compensation adjustment. Eligibility rules and eligibility groups allow you to define criteria that must be met.

Structure
Eligibility rules are determined by the following:
Criteria Definition

Eligibility group [Page 69] Determined by organizational assignment data Validity Period Determines the period for which the adjustment is valid Employment requirements Denotes the date before which the employee must be hired, or the employee’s length of service Work schedule data Other criteria Denotes the minimum working time Determines whether the employee’s pay grade, pay scale group, job, performance, salary level or company-specific criteria are relevant

Integration
Eligibility rules are assigned to a compensation adjustment. The adjustment is then included in an adjustment reason and processed by the Compensation Administration component..
See also:

Eligibility group [Page 69] Compensation Adjustment Eligibility Infotype (0381) [Page 70]

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Compensation Management (PA-CM) Eligibility Group

Eligibility Group
Definition
Use Eligibility Groups to categorize employees and define criteria for an eligibility rule. You can use decision trees to define these groups.

Use
Your company has a bonus award. Employees must be with the company for at least one year to qualify for this bonus. However, in your French subsidiary, only managers with the company for at least one year qualify for the bonus payment. Define a bonus component and adjustment, define an eligibility rule of “1 year of service”, define an eligibility group for the country grouping “France” for the pay grade group “Manager”. Your eligibility rule and group are as follows: eligibility rule eligibility group Criteria

Rule A Rule A MANAGER

1 years service 1 years service

In this case, the French subsidiary uses the eligibility rule defined by a group. When the system selects employees eligible for bonus awards, it first checks the country grouping. If the country grouping is 06 (France), it checks the eligibility group.

Structure
Eligibility groups are determined by decision trees based on an employee’s organizational assignment data.

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Compensation Management (PA-CM) Compensation Adjustment Eligibility Infotype (0381)

SAP AG

Compensation Adjustment Eligibility Infotype (0381)
Definition
This infotype stores eligibility information at employee level per compensation adjustment.

Use
Use this infotype to override eligibility criteria for employees. By setting the Eligibility indicator for an employee, the employee is always eligible for that compensation adjustment. The system then overrides the eligibility rules stored on the adjustment type.

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Compensation Management (PA-CM) Guidelines

Guidelines
Purpose
Whether you want to be able to award a 5% salary increase across the board, or award a $2000 bonus to all employees with a performance rating of more than 100 points, then the Guidelines component provides you with the necessary tools. Use the Guidelines component to depict the calculation methods that you use to calculate your compensation adjustments in the SAP R/3 System.

Features
The SAP R/3 System supports three types of guideline:
· · ·

fixed Matrix User-defined

You can create guidelines that calculate an adjustment using a fixed percentage, a fixed amount, or a fixed number. Alternatively, you can use employee attributes, such as compa ratio and performance, to calculate an adjustment type or you can use a user exit to define calculation methods not covered by standard methods provided by SAP. Integration to the Personnel Development component's Appraisal System means that you can use the point value results from a wide range of performance appraisals, for example, 360° feedback appraisals, personnel appraisals, etc. as the basis for your calculations. For more information on the Appraisal System see Appraisal Systems in the Personnel Development component.
See also:

Guidelines [Page 72]

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Compensation Management (PA-CM) Guidelines

SAP AG

Guidelines
Definition
Guidelines determine how compensation adjustments are calculated. Guidelines are values of a range for compensation. Ranges can be a percentage, an amount, or a unit.

Use
Compensation adjustments are decided by the manager. Compensation Management allows you to set guidelines for compensation calculations, or set limits for the manager’s recommendations.

Structure
SAP R/3 System contains the following types of guidelines:
· · ·

fixed Matrix User-defined

Fixed Guidelines
Compensation adjustments are calculated using a fixed percentage, fixed amount, or a fixed number.

Matrix
Compensation adjustments are calculated using matrices, or one or more criteria. Matrix guidelines are one dimensional, two dimensional, or three dimensional.

A one-dimensional matrix calculates the compensation adjustment based on length of service. A three-dimensional matrix calculates compensation adjustments based on length of service, performance, and pay grade

User-defined
These allow you to distribute compensation adjustments based on company policies that are not covered by fixed and matrix guidelines.

Integration
Guidelines provide calculating methods for the compensation administration process and can be applied during this process.

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Compensation Management (PA-CM) Adjustments

Adjustments
Purpose
What compensation adjustment types you have in your organization, how, why and when they are distributed, how employees are selected for the compensation administration process, and how compensation adjustments can be tracked is all handled by the Adjustments component. In brief, you use the Adjustments component to define the key elements required to perform compensation administration.
See also:

Compensation Adjustment Types [Page 74] Adjustment Reason [Page 77] Compensation Adjustment Infotype (0380) [Page 75]

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Compensation Management (PA-CM) Compensation Adjustment Types

SAP AG

Compensation Adjustment Types
Definition
Compensation adjustment types represent the methods used to determine the amount or quantity by which the Compensation Components [Page 64] are changed.

Use
You use compensation adjustment types to determine what the compensation components are made up of and to reflect the different calculation methods used.

In your organization, the employees' base pay component consists of a salary increase and a special adjustment. The bonus component can also consist of an incentive bonus and a year end bonus.

Structure
A compensation adjustment type includes the following attributes:
Attribute Definition

Compensation area Compensation component Validity Period Effective date Calculation data eligibility rule

Specifies the area for which the adjustment applies Determines what type of adjustment is being awarded and which infotype is updated Determines the period for which the adjustment is valid Determines when the adjustment becomes effective Determines how the adjustment is calculated, which wage types are created Determines who will qualify for the adjustment (optional)

Integration
Adjustment types are assigned to an adjustment reason and are distributed in the compensation administration process.
See also:

Adjustment Reason [Page 77] The Compensation Administration Process [Page 60] Adjust Compensation [Ext.] Adjust Compensation Using Mass Maintenance Tool [Ext.]

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Compensation Management (PA-CM) Compensation Adjustment Infotype (0380)

Compensation Adjustment Infotype (0380)
Definition
Means by which you can keep track of the compensation adjustments awarded to an employee per adjustment type, together with the calculations for each adjustment type and the breakdown.

Use
You can use this infotype to create a compensation history for each employee. You should only use this infotype for information purposes. You cannot use this infotype to award compensation adjustments to employees manually. To create, change, and delimit this infotype, you must award adjustments or make changes to adjustments from within the compensation administration process. You can, however, delete infotype records for this infotype.

Deleting infotype records could lead to inconsistencies in the system and in the budget data.

Structure
This infotype is divided into subtypes. Each subtype represents a compensation adjustment type. You can store different sets of calculations for each adjustment type and reason at the employee level. This allows you to keep a record of compensation adjustment changes for an employee over time. You can also keep a record of the breakdown of the compensation adjustment.

As a result of the annual salary review, employee A receives a salary increase. In this infotype, the system enters the elements that make up the salary increase. A salary increase can, for example, include the following elements: – Promotion

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Compensation Management (PA-CM) Compensation Adjustment Infotype (0380)

SAP AG

– –

Adjustment Annual 3% increase

Integration
When the compensation planning and administration process is complete and you have activated the compensation adjustments, the system automatically creates an infotype record for each compensation adjustment type and reason for all the employees that received included in the administration process.
See also:

The Compensation Administration Process [Page 60] Adjust Compensation [Ext.] Adjust Compensation Using Mass Maintenance Tool [Ext.] Activate Adjustments [Page 86]

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Compensation Management (PA-CM) Adjustment Reason

Adjustment Reason
Definition
The adjustment reason provides an automated process for updating the following infotype records:
· · · · ·

Basic Pay (0008) Additional Payments (0015) Long-Term Incentives (Distributed) (0382) Time unit to display compensation amounts Compensation adjustment types to apply and which budgets they reduce

The adjustment reason defines the:

Use
The adjustment reasons determines why compensation adjustments are being planned and administered. You can use adjustment reasons to distributes adjustments in accordance with your company’s compensation policies.

Structure
The adjustment reason includes the following elements:
Element Definition

Adjustment types Determine which employee records are updated Time unit Budget type Reason Message type
See also:

Determines which unit of time is used to calculate and display amounts or quantities in compensation administration Determines what type of budget is used Determines why compensation is being adjusted Determines system's reaction if budget available is exceeded

The Compensation Administration Process [Page 60] Compensation Adjustments [Page 74]

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Compensation Management (PA-CM) Adjusting Compensation for Employees

SAP AG

Adjusting Compensation for Employees
Procedure
1. Choose Human Resources ® Personnel Management ® Compensation Management ® Administration ® Adjustments ® Change. The Change Compensation Adjustment screen appears. 2. Choose Settings ® Change planning period... and enter a planning period. 3. Choose Settings ® Change adjustment reason... and enter an adjustment reason. 4. Enter an adjustment type in the Type field of the Overview area. 5. Select an employee in the Search area For more information, see Using Search Functions [Page 17] The system displays the selected employee in the Selection area. 6. Select the person from the Selection area by double clicking on him/her. The system displays the compensation adjustments made for this employee in the Overview area.

If you want to process more than one employee at a time, select the employees in the Selection area. 7. Choose Edit ® Apply guidelines or Apply rounding rules or Percentage increase or Set status, according to how you want to adjust the compensation. 8. Save your entries

Result
You have completed the compensation adjustments and can submit your adjustments for approval.
See also:

Adjusting Compensation Using Mass Maintenance Tool [Page 79] Adjust Compensation Using Manager's Desktop [Page 82] Compensation Adjustment Infotype (0380) [Page 75] Activate Adjustments [Page 86]

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Compensation Management (PA-CM) Adjusting Compensation Using Mass Maintenance Tool

Adjusting Compensation Using Mass Maintenance Tool
1. Choose Human Resources ® Personnel Management ® Compensation Management ® Adjustments ® Change. The Change Compensation Adjustment screen appears. 2. Select an adjustment reason, an adjustment (optional) and a planning period 3. Select an employee in the Search area For more information, see Using Search Functions [Page 17] The system displays the selected employee in the Selection area.

You can determine which columns of employee information are to be displayed in which order in the spreadsheet and how the rows are to be sorted. Choose Edit ® Spreadsheet ® Column configuration ® Determine. If you then want to display the columns according to SAP standard settings, choose Edit ® Spreadsheet ® Column configuration ® Undo. 4. Choose Edit ® Spreadsheet ® Adjustment type or Adjustment reason. 5. On the Maintain Compensation Adjustments screen, select the adjustment type you want to edit, and choose Extras ® Percentage increase or Apply guidelines. The system makes compensation adjustments for all the employees in the table. 6. Enter the necessary adjustment data, for example, an absolute amount or a percentage 7. If you want to update the data in the table, choose Adjustment ® Update, do this if you want to know how much of your budget is left over, for example. 8. When you are happy with the adjustments, choose Goto ® Back.

You can only save your data from within the SAP R/3 Compensation Management component and not in the Excel worksheet. 9. Save your entries

Result
You have completed the compensation adjustments and can submit your adjustments for approval. The system creates Compensation Adjustments infotype (0380) records for the employees per adjustment type.
See also:

Excel Worksheet for Compensation Adjustments [Page 80] Compensation Adjustment Infotype (0380) [Page 75] Activate Adjustments [Page 86]

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Compensation Management (PA-CM) Excel Worksheet for Compensation Adjustments

SAP AG

Excel Worksheet for Compensation Adjustments
Definition
Means by which you can award several compensation adjustments to a group of employees at the same time in an Excel spreadsheet environment.

Structure
The following columns are displayed in the SAP Standard System. You can change the sequence of columns or add new ones. You can display a maximum of 15 columns:
Column Definition

Name Cost center Organizational unit Job

Identifies the employee Identifies the employee's cost center Identifies the employee's organizational assignment Represents the job of the position that the employee holds. If there is no data stored at the position level, the system reads the data stored at the job level. Is the position that the employee holds Is the employee that occupies the chief position of the employee's organizational unit Identifies what type of salary structure the employee is assigned to, for example, pay grade, or pay scale Identifies the pay grade or pay scale type Identifies the pay grade or pay scale area Identifies the pay grade or pay scale group in which the employee lies Identifies the pay grade or pay scale level in which the employee lies Groups the employee for the collective agreement Is the employee's base salary. This is the total of the wage types that have the indicator ‘Add to total amount' on the Basic Pay infotype (0008) Represents the currency in which the employee is paid. If all the employees are paid in the same currency, then this column does not appear. Defines which percentage of standard working time the employee works.

Position Manager Planned compensation Type Area Group Level Ruling Base salary

Currency

Capacity utilization level

The system also always displays the following columns:
Column Definition

Effective date

Is the date on which the adjustments come into effect

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Compensation Management (PA-CM) Excel Worksheet for Compensation Adjustments

Status Calculation base

Is the current status of the adjustment, for example, active, planned. Serves as the basis for calculating the adjustment increase. The system calculates the calculation base using wage types stored on the Basic Pay (0008), Additional Payments (0015) and Recurring Payments and Deductions (0014) infotype records. This is achieved using a wage type that is a valuated wage type that is associated with a module, for example, ANSAL. In Customizing for Compensation Management, you can determine which wage types are used by choosing Compensation Management ® Planning and Administration ® Adjustments ® Wage Types for Adjustment Types ® Define Valuation of Base Wage Types

Currency Wage types

Is the currency of the base salary. If all the employees are paid in the same currency, then this column does not appear. Are the wage types that appear on the employee's Compensation Adjustment (0380) infotype. If all the employees receive the same wage type, then this column does not appear. Represents the amount of the adjustment. The total field is all the total of all the amounts added together – the amounts are converted into one currency Is the percentage that the employee received as an adjustment. The total here represents a mean value. Is the total of all the adjustments that the employee has received. Is the total percentage that the employee received. The total here represents a mean value. Determines how much you have at your disposal for the adjustments Determines how much of the budget you have left.

Amount Percentage Total amount Total percentage Budget Remaining budget
See also:

Adjusting Compensation Using Mass Maintenance Tool [Page 79]

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Compensation Management (PA-CM) Adjust Compensation Using Manager's Desktop

SAP AG

Adjust Compensation Using Manager's Desktop
Use
The functions included in the Compensation Management theme category in Manager's Desktop allow the compensation line manager to carry out salary-related tasks, such as salary increases and annual bonus, for the employees for which he/she is directly responsible. The manager can access the Compensation Management functionality directly from within Manager's Desktop.

Prerequisites
To use this function, you must:
· · · ·

Create an organizational structure complete with positions and holders Create budgets for the adjustment types for the organizational units (optional) Be the chief in the organizational unit that you want to process Make sure that Manager's Desktop has been configured in accordance with your requirements for the necessary scenarios and for the theme category Compensation Management. For more information see Configuring Manager's Desktop for Compensation Management [Page 83]

Activities
1. User chooses the category Costs + Budget 2. The system displays a list of all the functions that are assigned to this category and the relevant organizational structure, that is the organizational units and persons for which the user is responsible. 3. The user then selects the organizational unit or the person(s) for which he/she wants to, for example, award salary increases and uses drag and drop to drag the desired function to the selected objects (or vice versa). 4. The system then starts the function, checking to see whether a budget type has been specified for the adjustment type being carried out and asks the user for a plan period 5. The user enters a plan period 6. The system takes the user into the compensation administration transaction 7. The user maintains compensation adjustments, bonuses etc for the employees. For more information, see Adjusting Compensation for Individual Employees [Ext.] .
See also:

Manager’s Desktop [Ext.]

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Compensation Management (PA-CM) Configuring Manager's Desktop for Compensation Management

Configuring Manager's Desktop for Compensation Management
Use
You can use Manager's Desktop to award compensation adjustments types, for example, salary increases, and annual bonuses, to your employees directly. SAP delivers categories and pre-configured functions. The SAP R/3 System is configured so that it uses the adjustment types that are assigned to the adjustment reason 99 as the functions in Manager's Desktop. If you want to be able to perform different functions in the Compensation Management theme category, you can either assign different adjustment types to adjustment reason 99 or you can change the customizing settings in Manager's Desktop so that it reads a different adjustment reason.

Procedure
Assigning Different Adjustment Types to Adjustment Reason 99
1. In Customizing, choose Personnel Management ® Compensation Management ® Planning and Administration ® Adjustments ® Define Adjustment Reasons The Change "Compensation Adjustment Reason" : Overview screen appears 2. Select adjustment reason 99 and choose Compensation Adjustment Details in the navigation area 3. On the next screen, enter the relevant adjustment types 4. Choose

Assigning a Different Adjustment Reason
1. In Customizing, choose Personnel Management ® Manager's Desktop ® Enhancement of Function Codes ® Define Structure of Function Codes The Change View "Function Code Hierarchies for Manager's Desktop": Overview screen appears 2. Select the entry for scenario MWB1 for the Higher-level Fcode COMP_NODE and choose 3. On the next screen, enter the two-character identifier of your adjustment reason in the Function code prefix field and choose

Result
The system displays new functions in the Compensation Management theme category in Manager's Desktop

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Compensation Management (PA-CM) Adjust Compensation After Completing an Appraisal

SAP AG

Adjust Compensation After Completing an Appraisal
Use
This function allows you to award an adjustment to an employee directly after completing an appraisal for this employee using the Personnel Development component's Appraisal System. Completing the appraisal triggers further processing which takes you directly into Compensation Management's Compensation Administration component where you can award an adjustment. For more information, see Adjusting Compensation for Individual Employees [Ext.].

Integration
To use this function, you must:
· · ·

Implement Personnel Development's Appraisal component Make sure that there is at least one appraisal model defined Activate integration between the Personnel Development and Compensation Management components. In Customizing for Personnel Development set the further processing indicator by choosing Appraisal Systems ® Edit Appraisal Catalog Define matrix guidelines that contain the required appraisal model ID

·

Activities
1. User completes appraisal for employee 2. System triggers further processing 3. User chooses a planning period and an adjustment type 4. System branches into the Maintain Compensation Adjustment screen 5. User awards an adjustment and saves entries

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Compensation Management (PA-CM) Displaying a Compensation Adjustment

Displaying a Compensation Adjustment
Procedure
7. Choose Human Resources ® Personnel Management ® Compensation Management ® Adjustments ® Display. The Display Compensation Adjustment screen appears. 8. Choose Settings ® Change planning period... and enter a planning period. 9. Choose Settings ® Change adjustment reason... and enter an adjustment reason. 10. Enter an adjustment type in the Type field of the Overview area. 11. Select an employee in the Search area For more information, see Using Search Functions [Page 17] The system displays the selected employee in the Selection area. 12. Select the person from the Selection area by double clicking on him/her. The system displays the compensation adjustments made for this employee in the Overview area.

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Compensation Management (PA-CM) Activate Adjustments

SAP AG

Activate Adjustments
Purpose
This process includes all you need to do to submit your adjustments, have them approved, and activated, so that the adjustments are activated and have the status active, that is, the system automatically updates the employee records.

You can use workflow to approve and activate adjustments. For more information about using workflow to approve and activate adjustments, see Activate Adjustments (PA-CM) in the Personnel Administration Workflow Scenarios in the Basis Component.

Process Flow
1. Manager 1 maintains adjustments for the employees in his area of responsibility, saves the data and changes the status to submitted. 2. a. Manager 2 approves the submitted adjustments and activates them b. Manager 2 rejects the submitted adjustments and sends them back to manager 1 for amendments. The adjustments have either the status approved or rejected. 3. Steps 1 and 2 are repeated until the adjustments have the status approved. 4. Manager 2 activates the adjustments. The system updates the employee records.

Result
The adjustments are implemented and the system updates the employee records.
See also:

Approve and Activate Adjustments [Ext.]

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Compensation Management (PA-CM) Activate Adjustments

April 2001

87

Compensation Management (PA-CM) Long-Term Incentives

SAP AG

Long-Term Incentives
Purpose
In today's rapidly changing corporate climate, keeping employees focused, motivated and efficient is becoming increasingly difficult. Not only do long-term incentives, such as stock awards, recognize an employee's performance but they also tie the employee's performance and therefore, their compensation to the performance of the organization. Long-term incentives provide an answer to the retention challenges faced by organizations in today's competitive labor market as they usually require an employee to stay with the organization to receive the full benefits of these awards. The Compensation Management Long-Term Incentives component provides you with the necessary toolset for granting and administering long-term incentives for your employees. In brief, you can use this component to perform:
·

Administer a variety of long-term incentives, including Incentive Stock Options (ISOs), Nonqualifying Stock Options (NQSOs), Performance Shares, Performance Units, and Restricted Stock. Handle a variety of vesting schedules Grant awards to eligible employees using guidelines Exercise stock options Handle life events, such as retirement, merger, employee termination Canceling Awards Forfeit awards due to life events Track long-term incentive awards at the employee level using the Awards Infotype 0382 [Page 90] record.

· · · · · · ·

Implementation Considerations
Install this component if you want to grant and administer long-term incentives, for example, awards, stock options to your employees using an automated process that also enables you to use the eligibility and guideline capabilities provided by the Compensation Administration component.
See also:

Eligibility [Page 67] Guidelines [Page 71] Long-Term Incentive Administration [Page 91]

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Compensation Management (PA-CM) Long-Term Incentive Plans

Long-Term Incentive Plans
Definition
Means by which the organization determines how many shares are available to be granted. This block of shares must first be approved by the shareholders. A long-term incentive plan can consist of several types of award, for example, you can have a long-term incentive plan that contains non-qualified stock options and performance units.

Use
You can use the long-term incentive plan to associate a fixed block of shares that has been approved by the shareholders, to a compensation component that is categorized as a long-term incentive. You can also use the long-term incentive plan to track how many shares have been distributed to employees.

Structure
A long-term incentive plan includes the following attributes:
Attribute Definition

Component Validity Period Number of shares approved Number of shares distributed
See also:

Classifies the plan Determines the period for which the plan is valid Determines how many shares the shareholders have allowed to be granted Determines how many of the shares have already been granted to employees

Long-Term Incentives (Distributed) Infotype 0382 [Page 90] Long-Term Incentive Administration [Page 91]

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Compensation Management (PA-CM) Awards Infotype 0382

SAP AG

Awards Infotype 0382
Definition
Means by which you can keep track of the number of awards granted to an employee together with the pricing information.

Use
The system automatically creates an infotype record for an employee once you have granted an employee shares under the award. You should only use this infotype for information purposes. You should not create or change infotype records manually. You are also advised not to use this infotype for assigning awards.

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Compensation Management (PA-CM) Long-Term Incentives Administration

Long-Term Incentives Administration
Purpose
This is the basic common process used by compensation departments to grant and administer long-term incentive awards. In this instance, we are assuming that no change events or life events occur.

Prerequisites
Before you start this long-term incentives administration process, you must have:
· · · ·

Set up long-term incentive plans Defined award types and awards Set up and assigned eligibility rules and guidelines to determine who takes part and how many options are granted per employee. Defined change events, life events, vesting schedules, and exercise methods

Process Flow
You have set up your long-term incentive plan and have defined the necessary awards for the different award types. 1. Select an award and decide how you want to select your employees. For more information, see Employee Selection for Compensation [Ext.] 2. Grant the options to the eligible employees. You can use guidelines to determine how many options an employee receives based on pre-defined criteria such as performance, length of service, compa ratio, etc. 3. Change the number of options granted at the employee level and save your changes 4. The employee is now vested in the award and must wait until the vesting restrictions have lapsed before he/she can purchase the awards in which he/she is vested. 5. The vesting restrictions have lapsed and the awards can now be exercised, that is the employee can now purchase the awards. 6. The employee can now keep or sell the shares.

Result
When the awards are granted, the system creates an Awards Infotype 0382 [Page 90] record so that you can track the status of the grants and awards.
See also:

Long-Term Incentive Plans [Page 89] Granting Awards [Ext.] Exercising [Ext.] Expiring/Forfeiting [Page 98] Canceling Awards [Page 100]

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Compensation Management (PA-CM) Long-Term Incentives Administration

SAP AG

Processing Life Events [Page 102]

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Compensation Management (PA-CM) Granting Awards

Granting Awards
Use
Granting is the process of allocating or awarding long-term incentive awards, such as stock options, restricted stock, performance units to eligible employees.

Prerequisites
· · · ·

There is an award available You have defined awards If you want to allocate the awards using guidelines, then you must define guidelines. If you want to restrict the allocation, then you must define eligibility rules

Procedure
1. Choose Human Resources ® Personnel Management ® Compensation Management ® Administration ® Long-term Incentives ® Granting ® Change. The Change Award Granting screen appears. 2. Choose Settings ® Change awards... The Determine Award dialog box appears. 3. Select an award 4. Select an employee in the search area For more information, see Using Search Functions [Page 17] The system displays the selected employee in the Selection area. 5. Select the person from the Selection area by double clicking on him/her. The system displays the awards granted to this employee in the Overview area.

If you want to process more than one employee at a time, select the employees in the Selection area. 6. If you want to use guidelines to distribute a particular number of shares/options, choose If you want to apply guidelines to more than one employee, select more than one employee from the Selection area and choose Edit ® Apply guidelines. The system distributes the shares/options according to the guidelines. 7. If you want to grant shares/options manually, you can do this on the Overview screen for each employee. Select an employee and enter the number of shares/options in the Shares field. 8. Save your entries .

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Compensation Management (PA-CM) Granting Awards

SAP AG

Result
You have granted awards to your employees. The system creates a Awards Infotype 0382 [Page 90] infotype record per award, so that you can track who was granted what and when and at what price. The employees must now wait until the vesting restrictions have lapsed before they can exercise their options.
See also:

Exercising Awards [Page 96] Expiring/Forfeiting [Page 98] Canceling Awards [Page 100]

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Compensation Management (PA-CM) Display Granted Awards

Display Granted Awards
Use
This procedure enables you to display which awards have been granted to which employees.

Prerequisites
· ·

There is an award available You have defined awards

Procedure
9. Choose Human Resources ® Personnel Management ® Compensation Management ® Administration ® Long-term Incentives ® Granting ® Display. The Display Award Granting screen appears. 10. Choose Settings ® Change awards... The Determine Award dialog box appears. 11. Select an award 12. Select an employee in the search area For more information, see Using Search Functions [Page 17] The system displays the selected employee in the Selection area. 13. Select the person from the Selection area by double clicking on him/her. The system displays the awards granted to the employee in the Overview area.

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Compensation Management (PA-CM) Exercising Awards

SAP AG

Exercising Awards
Use
Exercising typically refers to stock options and is when an employee is allowed to purchase the options in which he/she is vested. Options are generally exercised at the discretion of the employee.

Prerequisites
· ·

Options have been granted to the employee. For more information, see Granting Awards [Page 93] The vesting restrictions have lapsed and the waiting periods are over.

Procedure
1. Choose Human Resources ® Personnel Management ® Compensation Management ® Administration ® Long-term Incentives ® Exercising ® Change. The Change Award Exercising screen appears. 2. Choose Settings ® Change awards... The Determine Award dialog box appears. 3. Select an award 4. Select an employee in the search area For more information, see Using Search Functions [Page 17] The system displays the selected employee in the Selection area. 5. Select the person from the Selection area by double clicking on him/her. The system displays the awards granted to this employee in the Overview area. If several awards have been granted to an employee, the system displays them in a table. Double-click on the granting whose exercising data you wish to change. 6. In the Overview area, enter a date and the number of shares that the employee wants to exercise 7. Enter the fair market value of the shares and the exercise method that the employee wants to use If integration with Treasury is active, the system displays the fair market value taken from Treasury. 8. Save your entries.

Result
The employees have now exercised options in which they were vested.

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Compensation Management (PA-CM) Display Exercised Awards

Display Exercised Awards
Use
Allows you to display which employees have been granted which awards and how many of those awards he/she has exercised.

Prerequisites
Options have been granted to the employee. For more information, see Granting Awards [Page 93]

Procedure
9. Choose Human Resources ® Personnel Management ® Compensation Management ® Administration ® Long-term Incentives ® Exercising ® Display. The Display Award Exercising screen appears. 10. Choose Settings ® Change awards... The Determine Award dialog box appears. 11. Select an award 12. Select an employee in the search area For more information, see Using Search Functions [Page 17] The system displays the selected employee in the Selection area. 13. Select the person from the Selection area by double clicking on him/her. The system displays the awards exercised by this employee in the Overview area.

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97

Compensation Management (PA-CM) Expiring/Forfeiting

SAP AG

Expiring/Forfeiting
Use
Expiring typically refers to stock options. An option is said to have expired when an employee fails to exercise the stock options before the expiration date which is defined as the end of the award term.

Forfeiting is the result of employee giving up the right to exercise his/her options. Forfeiture most commonly occurs under the following circumstances:
· · · · ·

The organization terminates the employee's work contract The employee gives notice The employee retires The employee becomes disabled The employee dies

Prerequisites
Options must have been granted to the employees. For more information, see Granting Awards [Ext.]

Procedure
1. On the Compensation Management screen, choose Administration ® Long-term incentives ® Expiring/Forfeiting The Grants Expired and Forfeited screen appears. 2. Enter a selection period All awards granted between January 1 1999 and March 31 1999 that have not been exercised, expire.

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Compensation Management (PA-CM) Expiring/Forfeiting

The selection period must be in the past. 3. Enter an award and choose The system displays a list of all the employees that were granted awards in the selection period together with the total numbers of shares that were granted and the number of shares that will expire or be forfeited 4. Choose

Result
The shares have expired or are forfeited. The system subtracts these shares from the total number of shares distributed in the long-term incentive plan. These shares can now be granted anew.

April 2001

99

Compensation Management (PA-CM) Canceling Awards

SAP AG

Canceling Awards
Use
An award is canceled when, for example, new options or restricted shares are issued or exchanged, or when a company undergoes a merger. In this instance, the company's options may be canceled and replaced with the options or other long-term incentives issued by the successor company.

Prerequisites
Options must have been granted to the employees. For more information, see Granting Awards [Ext.]

Procedure
1. On the Compensation Management screen, choose Administration ® Long-term incentives ® Canceling The Award Cancellation screen appears. 2. Enter an award 3. Enter a cancellation date All options issued under the Stock Plan 1 award will be canceled on March 31 1999. The cancellation date must be in the past. 4. Decide whether you want to cancel both the unvested and vested shares or whether you just want to cancel unvested shares and choose The system displays a list of all the employees that were granted the award chosen, together with the number of shares granted, the number of shares exercised and the number of shares to be canceled. 5. Choose

Result
The shares/options are canceled. The system subtracts these shares from the total number of shares distributed in the long-term incentive plan. These shares can now be granted anew. The system sets the cancellation indicator for this award. If you only decided to cancel the unvested shares, then the system splits the Awards Infotype 0382 [Page 90] record into two records, so that one record exists for the shares that have been granted and vested and which can still be exercised and the other record is for the unvested shares which is delimited as of the cancellation date.

100

April 2001

SAP AG

Compensation Management (PA-CM) Life Events

Life Events
Definition
Means by which you can change an award's vesting schedule, or forfeit an award as a result of an incident involving the employee (for example, change in family status, death, retirement, etc.) or the organization (for example, merger).

Structure
A life event can either be an employee event which affects a particular employee or it can be a corporate event which then affects all the employees in the organization.
See also:

Processing Life Events [Page 102]

April 2001

101

Compensation Management (PA-CM) Processing Life Events

SAP AG

Processing Life Events
Use
Many awards have vesting schedules that change as a result of a pre-defined life event occurring. For example, unvested shares vest immediately, all or a portion of the shares become immediately exercisable, etc.

Prerequisites
· · ·

Options must have been granted to the employees. Life events have been defined Life event vesting has been set up

Procedure
1. On the Compensation Management screen, choose Administration ® Long-term incentives ® Life events The Life Events for Long Term Incentives screen appears. 2. Enter the date on which the life event occurred 3. Enter the event type

If you select an employee event, you must also enter the employee's personnel number 4. Choose 5. If you selected an employee event, the system displays the following information:
· · ·

Name of employee Award Grant date

102

April 2001

SAP AG

Compensation Management (PA-CM) Processing Life Events

· · ·

Number of shares granted The effect that the life event has had on the vesting schedule of the award If a new vesting rule takes effect, then the system displays the new term of the award as of the date of the life event and the original term of the award

6. If you selected a corporate event, the system lists all the employees that have been granted awards that are affected by this particular life event, together with the following information:
· · · ·

Grant date Number of shares granted The effect that the life event has had on the vesting schedule of the award If a new vesting rule takes effect, then the system displays the new term of the award as of the date of the life event and the original term of the award

7. Choose

Result
If the life event results in the awards being forfeited, then the system forfeits the awards and subtracts the number of shares forfeited from the total number of shares distributed in the longterm incentive plan. If the life event changed the vesting schedule, then the new vesting rules take effect as of the life event date.
See also:

Life Events [Page 101]

April 2001

103

Compensation Management (PA-CM) Pay scale changes

SAP AG

Pay scale changes
Purpose
The Pay Scale Changes component provides a toolset for handling pay scale reclassifications and pay increases that reflect the terms and conditions laid down by the collective bargaining agreement prevalent in your organization. In brief, you can use this component to perform:
· · ·

Automatic pay scale reclassifications based on an employee's age, or length of service, or length of time in a particular pay scale group and level Automatic pay scale reclassifications based on hours worked Automatic pay increases

Integration
To perform automatic pay scale reclassifications based on hours worked, you must install the Time Evaluation component and have set up your time evaluation schema.
See also:

Display Pay Scale Structure [Page 122] Time Spent in Pay Scale Group/Level [Page 115] Defaults for Pay Scale Reclassification [Page 113]

104

April 2001

SAP AG

Compensation Management (PA-CM) Display Pay Scale Structure (Report RHPAYSC0)

Display Pay Scale Structure (Report RHPAYSC0)
Use
This report displays the pay scale groups in your organization.

Prerequisites
Pay scales must exist.

Features
Selection
By making an entry under Further selection, you specify which pay scale groups you wish to display. You can enter a particular country grouping, for example, In so doing, you can display pay scale groups for the individual countries in which your company has subsidiaries.

Output
This report lists the pay scale groups in a table together with the following data per pay scale group:
· · · · ·

Pay scale type and area Grouping for collective agreement provision Pay scale level Amount Currency and unit of time

April 2001

105

Compensation Management (PA-CM) Time Spent in Pay Scale Group/Level (Report RPLTRF00)

SAP AG

Time Spent in Pay Scale Group/Level (Report RPLTRF00)
Use
This report displays the pay scale classification together with the length of time spent in the pay scale group/level per employee.

Integration
If your collective agreement stipulates that an employee is moved into a different pay scale group or level on reaching a certain age or after spending a specified amount of time in his/her current pay scale group or level, then you can run the Defaults for Pay Scale Reclassification [Page 113] report (RPLTRF10) to display suggestions for the pay scale reclassification for individual employees. If you want the system to automatically reclassify your employees once they have reached a certain age or once they have spent a specified amount of time in a pay scale group or level, then you can use the Pay Scale Reclassification According to Age and/or Time Spent in Pay Scale (RPITUM00) to do this.

Prerequisites
The relevant employees must be assigned to a pay scale structure. The employees cannot be directly valuated nor can they be assigned to a pay scale structure. A valid Basic Pay infotype record (0008) must exist for the relevant employees.

Features
Selection
By making entries under Selection and Further selections you can determine which employees' pay scale data is displayed.

Output
This report displays the names of the employees in a table together with the following data per employee:
· · · ·

Personnel number Pay scale type, area, group and level Date as of which the employee has been in the current classification Length of time spent in the current pay scale group or level in years and months

This data is taken from the Basic Pay infotype (0008). If errors occur, you can also display an error list for each of the employees. To display the error list, choose List ® Display error list.

106

April 2001

SAP AG

Compensation Management (PA-CM) Defaults for Pay Scale Reclassification (Report RPLTRF10)

Defaults for Pay Scale Reclassification (Report RPLTRF10)
Use
This report displays the next standard pay scale reclassification for individual employees. You can use this report to determine whether you have forgotten to reclassify an employee or to determine when and who is due for a reclassification.

Integration
If your collective agreement stipulates that an employee is moved into a different pay scale group or level on reaching a certain age or after spending a specified amount of time in his/her current pay scale group or level, then you can run the Time Spent in Pay Scale Group/Level [Page 115] report (RPLTRF00) to display the current pay scale classification of your employees as well as the length of time spent in the pay scale group or level. If you want the system to automatically reclassify your employees once they have reached a certain age or once they have spent a specified amount of time in a pay scale group or level, then you can use the Pay Scale Reclassification According to Age and/or Time Spent in Pay Scale (RPITUM00) to do this.

Prerequisites
The relevant employees must be assigned to a pay scale structure. These employees cannot be directly valuated nor can they be assigned to a pay grade structure. These employees are in a pay scale grouping that is defined as being relevant for automatic reclassification. For more information on how to set up automatic pay scale reclassifications, see Pay Scale Changes in the Compensation Management or the Personnel Administration Implementation Guide.

Features
Selection
By making entries under Period, Selection and Further selections you can determine which employees' pay scale reclassification is displayed.

Output
This report displays the names of the employees in a table together with the following data per employee:
· · · · · ·

Personnel number Social insurance or tax number Pay scale type, area, group and level Period of current classification New pay scale group and level Period of new classification

April 2001

107

Compensation Management (PA-CM) Defaults for Pay Scale Reclassification (Report RPLTRF10)

SAP AG

This data is taken from the Basic Pay infotype (0008). This report only specifies a suggestion for reclassification if the date of the next standard pay scale reclassification lies within the validity period of the corresponding pay scale group or level. You can also display an error list for each of the employees. To display the error list, choose List ® Display error list.

108

April 2001

SAP AG

Compensation Management (PA-CM) Reports in Compensation Management

Reports in Compensation Management
Use
Numerous standard reports are available in Compensation Management. Using these reports, you can carry out statistical evaluations which access employees’ compensation data, the pay scale/pay grade structure of your company or data from external salary surveys.

Features
You can execute the following standard reports in the Compensation Management infosystem.
·

Reports relating to employees’ compensation data Total Compensation Statement [Page 111] Total Compensation Statement – Mass Printing [Page 112] Defaults for Pay Scale Reclassification [Page 113] Time Spent in Pay Scale Group/Level [Page 115] Compa Ratio [Page 116] Compare Actual Base Salaries with Planned Compensation [Page 118]

·

Reports relating to the pay scale/pay grade structure Pay Grade Structure for Jobs [Page 120] Displaying Pay Grade Structure [Page 121] Display Pay Scale Structure [Page 122] Planned Labor Costs [Page 123]

·

Reports relating to salary surveys Data Extraction for Participation in Salary Surveys [Page 125] Hay PayNet: Data Extraction for Participation in Salary Surveys [Page 128]

You can also create your own reports in addition to these. The generic reporting tool in Human Resources is available for this purpose. For more information on how to create reports, see the Human Resources Information System documentation under HR in the Infoset Query [Ext.].

Activities
To execute the standard reports from the SAP Easy Access menu, choose
· · · SAP Menu ® Human Resources ® Personnel Management ® Compensation Management ® Infosystem ® Reports SAP Menu ® Infosystems ® Human Resources ® Reports ® Personnel Management ® Compensation Management SAP Menu ® Human Resources ® Information System ® Reports ® Personnel Management ® Compensation Management

April 2001

109

Compensation Management (PA-CM) Employee Compensation Data

SAP AG

Employee Compensation Data
Use
Using these reports, you can report on employees’ compensation data. You can display, for example, how long the employee has been at his or her pay scale level. This will help you to decide which pay level to move the employee to. You can display suggestions as to which pay scale level to move the employee to. You can also display the employee’s compa-ratio within the salary band. You can compare the employee’s actual base salary and the planned compensation assigned to the employee’s job or position.

110

April 2001

SAP AG

Compensation Management (PA-CM) Total Compensation Statement

Total Compensation Statement
Use
This report enables you to display Total Compensation Statements for individual employees in your company.

Prerequisites
· ·

The Total Compensation Statement is set up in the Compensation Management IMG. You have installed the Adobe Acrobat â Reader.

Features
Selection
Select an employee using the Object manager search functions and enter a date and period for the Total Compensation Statement.

Output
The report displays the selected employee’s Total Compensation Statement.

Activities
Displaying an Employee’s Total Compensation Statement
1. Choose Settings ® Date and preview period... The Specify date and preview period dialog box appears. 2. Enter a start date and a period or an end date. 3. Choose Execute. 4. Select an employee in the Search area For more information, see Using Search Functions [Page 17] 5. Select the person from the Selection area by double clicking on him/her. The system displays this employee’s Total Compensation Statement in the Overview area.

Displaying an Error List
1. Select several employees. 2. Choose Goto ® Error list.

Printing the Total Compensation Statement
1. Select one or more employees. 2. Choose Total Compensation Statement ® Print.

April 2001

111

Compensation Management (PA-CM) Total Compensation Statement – Mass Printing (Report RHCMPTCS_PRINT)

SAP AG

Total Compensation Statement – Mass Printing (Report RHCMPTCS_PRINT)
Use
Using this report, you can print out Total Compensation Statements for several employees so that you can send individually by mail. The report is intended to enable you to print a very large number of Total Compensation Statements.

Prerequisites
The Total Compensation Statement is set up in the Compensation Management IMG.

Features
Selection
Select a period for the Total Compensation Statement and an employee for whom you wish to print the Total Compensation Statement.

We recommend that you carry out a test run of the report by selecting the Test run with error log field. By doing this, you avoid the risk of printing out the Total Compensation Statement with incorrect information. You can also execute the report in the background, as it can take a very long time. To do this, choose System ® Services ® Jobs ® Job Definition.

Output
The report prints out Total Compensation Statements for the selected employees. If you executed a test run of the report in which errors occurred, the system displays an error log. You can correct the errors and restart the report.

112

April 2001

SAP AG

Compensation Management (PA-CM) Defaults for Pay Scale Reclassification (Report RPLTRF10)

Defaults for Pay Scale Reclassification (Report RPLTRF10)
Use
This report displays the next standard pay scale reclassification for individual employees. You can use this report to determine whether you have forgotten to reclassify an employee or to determine when and who is due for a reclassification.

Integration
If your collective agreement stipulates that an employee is moved into a different pay scale group or level on reaching a certain age or after spending a specified amount of time in his/her current pay scale group or level, then you can run the Time Spent in Pay Scale Group/Level [Page 115] report (RPLTRF00) to display the current pay scale classification of your employees as well as the length of time spent in the pay scale group or level. If you want the system to automatically reclassify your employees once they have reached a certain age or once they have spent a specified amount of time in a pay scale group or level, then you can use the Pay Scale Reclassification According to Age and/or Time Spent in Pay Scale (RPITUM00) to do this.

Prerequisites
The relevant employees must be assigned to a pay scale structure. These employees cannot be directly valuated nor can they be assigned to a pay grade structure. These employees are in a pay scale grouping that is defined as being relevant for automatic reclassification. For more information on how to set up automatic pay scale reclassifications, see Pay Scale Changes in the Compensation Management or the Personnel Administration Implementation Guide.

Features
Selection
By making entries under Period, Selection and Further selections you can determine which employees' pay scale reclassification is displayed.

Output
This report displays the names of the employees in a table together with the following data per employee:
· · · · · ·

Personnel number Social insurance or tax number Pay scale type, area, group and level Period of current classification New pay scale group and level Period of new classification

April 2001

113

Compensation Management (PA-CM) Defaults for Pay Scale Reclassification (Report RPLTRF10)

SAP AG

This data is taken from the Basic Pay infotype (0008). This report only specifies a suggestion for reclassification if the date of the next standard pay scale reclassification lies within the validity period of the corresponding pay scale group or level. You can also display an error list for each of the employees. To display the error list, choose List ® Display error list.

114

April 2001

SAP AG

Compensation Management (PA-CM) Time Spent in Pay Scale Group/Level (Report RPLTRF00)

Time Spent in Pay Scale Group/Level (Report RPLTRF00)
Use
This report displays the pay scale classification together with the length of time spent in the pay scale group/level per employee.

Integration
If your collective agreement stipulates that an employee is moved into a different pay scale group or level on reaching a certain age or after spending a specified amount of time in his/her current pay scale group or level, then you can run the Defaults for Pay Scale Reclassification [Page 113] report (RPLTRF10) to display suggestions for the pay scale reclassification for individual employees. If you want the system to automatically reclassify your employees once they have reached a certain age or once they have spent a specified amount of time in a pay scale group or level, then you can use the Pay Scale Reclassification According to Age and/or Time Spent in Pay Scale (RPITUM00) to do this.

Prerequisites
The relevant employees must be assigned to a pay scale structure. The employees cannot be directly valuated nor can they be assigned to a pay scale structure. A valid Basic Pay infotype record (0008) must exist for the relevant employees.

Features
Selection
By making entries under Selection and Further selections you can determine which employees' pay scale data is displayed.

Output
This report displays the names of the employees in a table together with the following data per employee:
· · · ·

Personnel number Pay scale type, area, group and level Date as of which the employee has been in the current classification Length of time spent in the current pay scale group or level in years and months

This data is taken from the Basic Pay infotype (0008). If errors occur, you can also display an error list for each of the employees. To display the error list, choose List ® Display error list.

April 2001

115

Compensation Management (PA-CM) Compa-Ratios (Report RHCMPR0)

SAP AG

Compa-Ratios (Report RHCMPR0)
Use
You can use this report to calculate the compa-ratio, that is where individual employees sit in their respective salary bands. You can then use the compa-ratio to check to see whether your employees' salaries are still within the salary band or whether in individual cases, an employee needs to receive a salary adjustment or be moved into a different pay grade or level.

Prerequisites
The relevant employees and their salaries must be assigned to a pay grade structure (not pay scale structure). A valid Basic Pay [Ext.] infotype record (0008) must exist for the relevant employees.

Features
Selection
You can either use the Selection or Further selections functions to select the employees or you can choose Org. structure. If you want to select your employees via the organizational structure, then you must enter a root organizational unit. The system then selects all the employees from this organizational unit and all its subordinate organizational units. The system calculates an employee's compa-ratio by taking an employee's base or annual salary and comparing it to the midpoint of the salary band or level. The system takes the employee's capacity utilization level into account. Compa-ratio = (100/employment level) * (Basic salary or annual salary/midpoint) Whether the system uses the midpoint of the pay grade group or the reference value to calculate the compa-ratio depends on the settings you make in the Implementation Guide (IMG) for Compensation Management under Set System Parameters for the CRCAL switch. Whether the system uses the base salary or the annual salary to calculate the compa-ratio depends on the settings you make in the Implementation Guide (IMG) for Compensation Management under Set System Parameters for the CRSAL switch. Whether the system uses the midpoint of the pay grade group or level to calculate the compa-ratio depends on the settings you make in the Implementation Guide (IMG) for Compensation Management under Set System Parameters for the CRVAR switch.

Output
The report lists the names of the employees in table together with the following data per employee:
· · ·

Country grouping Pay scale type, area, group and level Midpoint of pay grade or level

116

April 2001

SAP AG

Compensation Management (PA-CM) Compa-Ratios (Report RHCMPR0)

· ·

Basic or annual salary Compa-ratio

You can also display an error list for each of the employees. To display the error list, choose List ® Display error list.

April 2001

117

Compensation Management (PA-CM) Comparing Actual Basic Salaries and Planned Compensation

SAP AG

Comparing Actual Basic Salaries and Planned Compensation
Use
You can use this report to compare the actual base salary that an employee receives, that is the salary entered in an employee's Basic Pay infotype (0008) record and the planned compensation assigned to the job or position in the Planned Compensation infotype (1005) record.

Prerequisites
A Basic Pay infotype [Ext.] (0008) record must exist for the relevant employees and a Planned Compensation infotype [Page 22] (1005) record must exist for the jobs or positions held by the employees.

Features
Selection
You can either use the Selection or Further selections functions to select the employees or you can choose Org. structure. If you want to select your employees via the organizational structure, then you must enter a root organizational unit. The system then selects all the employees from this organizational unit and all its subordinate organizational units.

Output
This report displays the names of the selected employees in a table along with the following data per employee:
· ·

Actual base salary and where they are in the pay scale or pay grade structure. This data is taken from the Basic Pay infotype (0008). Position's planned compensation. If the system cannot find any planned compensation data for the position, then it displays the planned compensation data for the job. This data is taken from the Planned Compensation infotype (1005)

If errors occur, you can also display an error list for each of the employees. To display the error list, choose List ® Display error list.
See also:

Planned Compensation Infotype (1005) [Page 22]

118

April 2001

SAP AG

Compensation Management (PA-CM) Pay Structure

Pay Structure
Use
Using these reports, you can display the pay structure for your company or for particular areas of your company. You can also display planned compensation for the positions and jobs in your company.

April 2001

119

Compensation Management (PA-CM) Salary Structure for Jobs (Report RHCMPJOBPLCOMP)

SAP AG

Salary Structure for Jobs (Report RHCMPJOBPLCOMP)
Use
This report lists the planned compensation amounts assigned to jobs.

Prerequisites
A Planned Compensation [Page 22] infotype (1005) record must exist for the jobs. The planned compensation for the jobs is assigned to a salary structure.

Features
Selection
You can either run this report for all the jobs in your organization or just for the jobs in an organizational unit. If you want to run this report for a particular organizational unit, enter the root organizational unit. The system then searches for all the jobs for the positions in this organizational unit and all subordinate organizational units.

Output
The report lists the names of the jobs in a table together with the following information per job:
· · · · · ·

Country grouping Pay grade type and area Pay grade group Lowest and highest pay grade level per pay grade Reference salary of pay grade Minimum and maximum salary paid in a pay grade level

The currency and unit of time are the same for each job and correspond to the values that you entered on the report selection screen. If the jobs have different currencies and different units of time in their respective Planned Compensation infotype (1005) records, the system converts the values so that all the jobs have the same currency and unit of time so that you can compare them.

Activities
By clicking on the job names in the list, you can branch into the infotype maintenance for the jobs and maintain the following data:
· · · ·

Evaluation – Job Evaluation Results infotype (1050) [Page 24] Survey data – Survey Results infotype (1051) [Page 25] Planned Compensation – Planned Compensation infotype (1005) [Page 22] Description – Description infotype (1002) [Ext.]

120

April 2001

SAP AG

Compensation Management (PA-CM) Display Pay Grade Structure (Report RPLCMP01)

Display Pay Grade Structure (Report RPLCMP01)
Use
This report displays the pay grades and levels in your organization.

Prerequisites
Pay grades and levels must exist.

Features
Selection
By making an entry under Further selection, you specify which pay grade groups you wish to display. You can enter a particular country grouping, for example, In so doing, you can display pay grade groups for the individual countries in which your company has subsidiaries.

Output
This report displays pay grades. This information is organized according to country grouping, pay grade type and pay grade area. The following data is also output:
· · ·

Reference salary of the pay grade (table T710A) Minimum and maximum salary of the pay grade levels (T710A) Currency and unit of time (T710A)

Activities
In the output table, you can display the following additional data by changing the display variant:
· ·

Midpoint of the pay grade (table T710) (Total of the minimum + maximum divided by 2) = (minimum + maximum) / 2 Range of the pay grade (table T710) (Difference between minimum value and the midpoint as a percentage of the midpoint) = ((maximum – minimum) / midpoint) * 100

·

Differential (level n) of pay grade level (table T710) (Difference from the next lowest level as a percentage of the current average. This remains empty for the lowest pay grade level). = (Average(n) – (Average(n-1) / Average(n) * 100

April 2001

121

Compensation Management (PA-CM) Display Pay Scale Structure (Report RHPAYSC0)

SAP AG

Display Pay Scale Structure (Report RHPAYSC0)
Use
This report displays the pay scale groups in your organization.

Prerequisites
Pay scales must exist.

Features
Selection
By making an entry under Further selection, you specify which pay scale groups you wish to display. You can enter a particular country grouping, for example, In so doing, you can display pay scale groups for the individual countries in which your company has subsidiaries.

Output
This report lists the pay scale groups in a table together with the following data per pay scale group:
· · · · ·

Pay scale type and area Grouping for collective agreement provision Pay scale level Amount Currency and unit of time

122

April 2001

SAP AG

Compensation Management (PA-CM) Planned Labor Costs (Report RHXSOLO0)

Planned Labor Costs (Report RHXSOLO0)
Use
This report calculates the planned compensation per position for one or several organizational units.

Integration
If you want to use selection criteria, you can navigate to the detailed Planned Labor Costs [Ext.] report, by selecting the Standard selection screen field and choosing Execute. This detailed report enables you to, amongst other things, select a different evaluation path which includes jobs and transfers the amount from the job, if there is no planned compensation amount maintained for the position.

Prerequisites
A Planned Compensation [Page 22] infotype (1005) record must exist for the positions or at least for the jobs in the organizational units.

Features
Selection
Enter one or several root organizational units. The system selects all the positions from these organizational units and their subordinate organizational units.

Output
The report provides you with a list of planned compensation amounts per position together with the position's organizational unit. If the system does not find a Planned Compensation infotype (1005) record for the positions using the standard evaluation path, then this report does not display an amount. When you exit the list display, the system displays the error log, if an error has occurred.

Activities
In the output list, you can double click on the position text or on the job text to branch into the infotype maintenance for these positions or jobs.

April 2001

123

Compensation Management (PA-CM) Salary Surveys

SAP AG

Salary Surveys
Use
Using these reports, you can gather information available in the R/3 system on salary survey providers in general, or for the Hay Group in particular and participate in their salary surveys. Once you have gathered all the necessary data, you can correlate it into a list or table. You can then download this information and send it to the salary survey providers.

124

April 2001

SAP AG

Compensation Management (PA-CM) Data Extractor for Salary Surveys(Query SALSURVEY_EXT)

Data Extractor for Salary Surveys(Query SALSURVEY_EXT)
Use
This report enables you to collect data available in the R/3 System for providers of salary surveys and take part in their salary surveys. Once you have gathered all the necessary data, you can correlate it into a list or table. You can then download this information and send it to the salary survey providers. This query is assigned to the HR: Compensation Management (/SAPQUERY/H0) user group within the Global Area.

Prerequisites
To provide the salary survey providers with as much information as possible, the following data needs to be available in the system:
· · · · · ·

Job Evaluation Results Infotype (1050) [Page 24] record per job Survey Results Infotype (1051) [Page 25] record per job Planned Compensation Infotype (1005) [Page 22] record per job Job codes and survey data per survey Address infotype (1028) [Ext.] record at the position Pay grades and levels

Features
Selection
Your entries under Period, Selection and Program Selections determine the employee for which you want to gather salary data.

Output
The report outputs the following data:
Column Definition

Organizational unit Organizational unit text Job ID Job name Job code from survey

Is the internal code that identifies the organizational unit Is the name of the organizational unit, for example, Human Resources Department Is the internal code that identifies the job Is the name of the job, for example, Market Researcher Is the code given to the job by the survey. Is the means of linking the jobs in the SAP R/3 System to those listed in the survey Is the name given to the job in the survey

Name of job from survey

April 2001

125

Compensation Management (PA-CM) Data Extractor for Salary Surveys(Query SALSURVEY_EXT)

SAP AG

Average salary from survey

Average salary to be paid for this job, which you specified in Compensation Management Customizing under Basic Settings ® Define System Settings. Currency of average salary Identifies whether this amount is a monthly, weekly, annually, etc. paid amount Represents the number of evaluation points that have been assigned to the job in the Job Evaluation Results infotype (1050) Specifies whether job is a Benchmark job [Ext.] Specifies the number of incumbents (employees) that hold the job being reported Represents the unique identifier for each incumbent (employee) reported Annual salary which was paid for job last year, based on salary survey. Currency of previous year’s salary. Annual salary paid for job in current year, based on salary survey. Currency of current annual salary. Represents the minimum amount paid for a particular pay grade Currency of minimum of pay grade. Identifies whether this amount is a monthly, weekly, or annual, etc. amount Midpoint between the lowest amount in the pay grade and the highest. Currency of the midpoint of the pay grade. Identifies whether this amount is a monthly, weekly, or annual, etc. amount Represents the maximum amount paid for a particular pay grade Currency of maximum of pay grade. Identifies whether this amount is a monthly, weekly, or annual, etc. amount

Currency key Unit of time for compensation Evaluation points

Benchmark job Number of employees Personnel number Previous year's annual salary from survey Currency key Current salary from salary survey Currency key Minimum of pay grade Currency key Unit of time for amount Midpoint of pay grade Currency key Unit of time for amount Maximum of pay grade Currency key Unit of time for amount

126

April 2001

SAP AG

Compensation Management (PA-CM) Data Extractor for Salary Surveys(Query SALSURVEY_EXT)

Total incentives paid in a given period

Represents the total of all the payments recorded in the Additional Payments infotype (0015) in a given period of time. You can specify this period when you configure your system. For information on how to set this parameter, in Customizing choose Personnel Management ® Compensation Management ® Basic Settings ® Set System Parameters and refer to the documentation for the switch PCOMP SSINT. If you did not specify a period in Customizing, the system determines a period of a year from the date you entered on the selection screen. For example, if you entered May 12 1999, the system would define the period as May 12 1998 to May 11 1999.

Currency key City Postal code Country

Currency of the sum of all premiums Is the name of the city in which the incumbent's place of work is located Identifies where the incumbent's place of work is located Identifies the country in which the incumbent's place of work in located

Activities
1. The user starts the relevant query. 2. The system gathers all the data and outputs it in a list 3. The user determines how he/she wants to display the information by choosing one of the display options 4. The user can now download and send the information to the salary survey provider
See also:

Hay PayNet: Data Extraction for Participation in Salary Surveys (Query SALSURVEY_HAY) [Page 128]

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Compensation Management (PA-CM) Hay PayNet: Data Extraction for Salary Surveys (SALSURVEY_HAY)

SAP AG

Hay PayNet: Data Extraction for Salary Surveys (SALSURVEY_HAY)
Use
This report enables you to collect data available in the R/3 System for the Hay Group (providers of salary surveys) and take part in their salary surveys. Once you have gathered all the necessary data, you can correlate it into a list or table. You can then download this information and send it to the salary survey providers. This query is assigned to the HR: Compensation Management (/SAPQUERY/H0) user group within the Global Area.

Prerequisites
To provide the salary survey providers with as much information as possible, the following data needs to be available in the system:
· · · · · ·

Job Evaluation Results Infotype (1050) [Page 24] record per job Survey Results Infotype (1051) [Page 25] record per job Planned Compensation Infotype (1005) [Page 22] record per job Job codes and survey data per survey Address infotype (1028) [Ext.] record at the position Pay grades and levels

Features
Selection
Your entries under Period, Selection and Program Selections determine the employee for which you want to gather salary data.

Output
The report outputs the following data:
Column Definition

Organizational unit Job ID Job name Job code from survey

Is the internal code that identifies the organizational unit Is the internal code that identifies the job Is the name of the job Specimen job from Hay Paynetâ survey catalog. Assign the job to the specimen job.

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Compensation Management (PA-CM) Hay PayNet: Data Extraction for Salary Surveys (SALSURVEY_HAY)

Hay match level

Identifies the level of the match between your organization's job and the Hay Model Job. This information is not available in the SAP R/3 System and must be entered manually. The system displays NP (not provided) in the output. Identifies the Hay job family for jobs that you could not match to a specific model job. This information is not available in the SAP R/3 System Further identifies your professional/managerial positions in the Engineering family. This information is not available in the SAP R/3 System Represents the unique identifier for each incumbent (employee) reported Identifies where the incumbent's place of work is located Specifies the number of incumbents that hold the job being reported Represents the number of evaluation points that have been assigned to the job in the Job Evaluation Results infotype (1050) Midpoint between the lowest amount in the pay grade and the highest. Currency of the midpoint of the pay grade. Annual salary paid for the job based on the salary survey. Currency of annual salary from survey Represents the total of all the payments recorded in the Additional Payments infotype (0015) in a given period of time. You can specify this period when you configure your system. For information on how to set this parameter, in Customizing choose Personnel Management ® Compensation Management ® Basic Settings ® Set System Parameters and refer to the documentation for the switch PCOMP SSINT. If you did not specify a period in Customizing, the system determines a period of a year from the date you entered on the selection screen. For example, if you entered May 12 1999, the system would define the period as May 12 1998 to May 11 1999.

Hay job family number

Hay discipline code

Personnel number Postal code Number of employees Evaluation points

Midpoint of pay grade Currency key Annual salary from salary survey Currency key Total incentives paid in a given period

Currency key

Currency of the sum of all premiums

Activities
1. The user starts the relevant query.

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Compensation Management (PA-CM) Hay PayNet: Data Extraction for Salary Surveys (SALSURVEY_HAY)

SAP AG

2. The system gathers all the data and outputs it in a list 3. The user determines how he/she wants to display the information by choosing one of the display options 4. The user can now download and send the information to the salary survey provider
See also:

General Salary Survey Data Extractor (Query SALSURVEY_EXT) [Page 125]

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Compensation Management (PA-CM) ESS Services in Compensation Management

ESS Services in Compensation Management

April 2001

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Compensation Management (PA-CM) Executing Salary Surveys

SAP AG

Executing Salary Surveys
1. Enter a key date for internal salary data. 2. Select a benchmark job, a survey provider and a survey country. 3. Choose Display Job Information. A screen containing information on the benchmark job you selected appears. 4. Choose the link to the survey provider. If the survey provider has a corresponding job which has been assigned to the SAP system, the link leads directly to this job. If no job has been assigned, select the survey provider and a job. 5. Select the market criteria you require and transfer the data to the SAP system. A screen appears displaying salary data for the internal benchmark job (calculated in the same currency as the currency used for the survey results) along with the survey results. If there was no assignment to an external job, and you selected the job yourself from the survey provider, you can save this assignment in the SAP system by choosing Enter external job number in SAP system. All employees assigned to the benchmark job via positions are also displayed. 6. In the Calculate variation according to salary segment, select a segment and choose Recalculate.

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Compensation Management (PA-CM) Displaying a Total Compensation Statement

Displaying a Total Compensation Statement
Enter a period for the Total Compensation Statement and choose Refresh. The system displays your personal Total Compensation Statement for the period selected.

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Compensation Management (PA-CM) Exercising Awards

SAP AG

Exercising Awards
For One Granting
1. Enter an exercising date or use the current date which appears as a default. 2. Enter the number of awards you wish to exercise. 3. Select an exercising method. 4. Choose Save exercise.

For More than One Granting
1. Select an award A screen appears in which you can enter exercising data. 2. Enter an exercising date or use the current date which appears as a default. 3. Enter the number of awards you wish to exercise. 4. Select an exercising method. 5. Choose Save exercise.

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