Enterprise Compensation Management 

Purpose

mySAP HR Enterprise Compensation Management (PA-EC) is a comprehensive solution combining both R/3 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 new salary survey tool.

You can either implement the new Enterprise Compensation Management component (PA-EC) or migrate from the old Compensation Management component (PA-CM), but you cannot run the old component and the new one in parallel.

Note

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 of Enterprise Compensation Management.

Implementation Considerations

mySAP HR Enterprise Compensation Management is shipped with an implementation guide (IMG) containing detailed instructions on how to configure your system, as well as model entries you can change to meet your company-specific needs. For more information, see the IMG structure Enterprise Compensation Management.

To implement this component, you must activate it first in your system by performing the activity Activate Enterprise Compensation Managementunder the section Global Settings. By doing so, you allow users to have access to the related functionality and make sure that the correct interfaces to other components are called, for example Management by Objectives.

Integration

To use Enterprise Compensation Management, you must have implemented the following components:

·        The Personnel Administration component to access and update employee master data.

·        The Organizational Management component to set up an organizational structure for budgeting, determining line managers and selecting employees.

·        The Payroll component. Implement and configure payroll on a country-specific basis to make sure that the compensation amounts and LTI (tax-)relevant information are written to the correct wage types.

Also, you can benefit from:

·        Manager Self-Service, so that your Line Managers are guided through the whole compensation process. Similarly, employees can view their Total Compensation Statement (TCS) in Employee Self-Service whenever required.

·        Personnel Cost Planning and Simulationto generate compensation budgets on the basis of PCP results and to use compensation guidelines for personnel cost planning purposes.

·        Either the old Personnel Development's Appraisals component or the new Management by Objectives (MBO) component to use appraisal results for measuring employee performance.

Data Extraction

Use SAP Business Information Warehouse or the R/3 query functionality to perform queries on the various compensation infotypes.

Features

mySAP HR 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 long-term incentives. Extensive customizing capabilities allow 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/broker via a standard XML-based banking interface.

¡        Import up-to-date exercising data from the bank/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/reassign/move budgets within the budget structure.

¡        Perform top-down budgeting.

¡        Change/update budget values (including a mass percentage change).

¡        Import data from Personnel Cost Planning (PCP) allowing bottom-up budgeting.

¡        Manage budgeting of Long-Term Incentives (LTI).

¡        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.