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 Enterprise Compensation Management


Enterprise Compensation Management ( PA-EC ) is a comprehensive solution, combining both SAP backend and web-based technologies, that helps you:

  • Plan remuneration policies effectively and keep costs under control while remaining competitive.

  • Motivate and retain your employees, allowing them to contribute to the success of your company.

  • Create and allocate budgets.

  • Handle job pricing with the salary survey tool.

You can either implement the current component, Enterprise Compensation Management ( PA-EC ), or migrate the old component, Compensation Management ( PA-CM ). However, you cannot execute the old and new components at the same time.


SAP does not provide a standard migration tool. You can, however, perform a migration on a customer-specific basis. The details of such a migration process should nonetheless be worked out in cooperation with consulting resources. For more information, see also the related section in the release note for Enterprise Compensation Management .

Implementation Considerations

Enterprise Compensation Management enables individual Customizing and thoroughly explains how you can configure your system. Example entries show you which changes you can make to make suitable adjustments for your requirements. For more information, refer to the Customizing for Enterprise Compensation Management ( PA-EC ).

To implement this component, you must first activate it in your system. To this end, in Customizing for Enterprise Compensation Management ( PA-EC ), choose Start of the navigation path Global Settings Next navigation step Activate Enterprise Compensation Management End of the navigation path . By doing so, you grant users access to the related functionality and ensure that the correct interfaces for other components – for example, Objective Setting and Appraisals – are called.


To use Enterprise Compensation Management , you are required to have implemented the following components:

  • Personnel Administration

    You can call and update employee master data.

  • Organizational Management

    You can set up an organizational structure for budgeting, determining line managers and selecting employees.

  • Payroll

    You implement and configure payroll on a country-specific basis to ensure that compensation data and LTI (tax-)relevant information is written to the correct wage types.

Also, you can benefit from:

  • Manager Self-Service

    Line managers are taken through the entire compensation process. Similarly, employees can view their Total Compensation Statement (TCS) in Employee Self-Service whenever required.

  • Personnel Cost Planning and Simulation

    You can generate compensation budgets based on results from Personnel Cost Planning and use compensation guidelines for Personnel Cost Planning.

  • Personnel Development– Appraisal Systems (previous component: PA-PD-AP) or Objective Settings and Appraisals (new component: PA-PD-PM).

    You can use appraisal results to measure employee performance.

Data Extraction

Use SAP Business Information Warehouse or the SAP Query functionality to perform queries on the various compensation infotypes.


Enterprise Compensation Management covers the following areas:

  • Compensation Administration

    Use this component to handle compensation reviews effectively, whether they are for fixed/variable pay or for long-term incentives. Extensive customizing capabilities allows you a great deal of flexibility with regard to guidelines, proration and eligibility.

  • Long-Term Incentives

    Use this component to:

    • Set up equity compensation plans.

    • Define vesting and exercising rules.

    • Grant awards to your employees.

    • Cancel LTI plans.

    • Export LTI grant and participant data to the bank or broker via a custom interface, if desired.

    • Import up-to-date exercising data from the bank or broker via the same interface.

    • Transfer tax-relevant exercising data to Payroll .

  • Budgeting

    Use this component to:

    • Create and maintain budget structures that reflect the organizational structure for different budget types and periods.

    • Create, delete and rename individual budget units in the budget structure.

    • Assign, re-assign and move budgets within the budget structure.

    • Perform top-down budgeting.

    • Perform bottom-up budgeting

    • Change or update budget values, including mass percentage changes.

    • Import data from Personnel Cost Planning (PCP)

    • Manage budgeting of Long Term Incentives (LTIs)

    • Check and release budgets.

  • Job pricing

    Use this component to:

    • Export company compensation data to salary survey providers.

    • Import and store survey data from multiple salary surveys into the SAP System.

    • Match internal jobs against survey jobs from multiple salary surveys.

    • Age and weight market data.

    • Determine composite market results.

    • Compare internal salaries against survey market data.

    • Adjust internal salary structures.