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

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.

Compensation Management comprises the following components:

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.

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.

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.