Business Configuration

Business Configuration Guide for mySAP HR ECM

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SAP Online Help 04.09.2003

Copyright Copyright 2003 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, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390, AS/400, OS/390, OS/400, iSeries, pSeries, xSeries, zSeries, z/OS, AFP, Intelligent Miner, WebSphere, Netfinity, Tivoli, Informix and Informix Dynamic ServerTM are trademarks of IBM Corporation in USA and/or other countries. ORACLE is a registered trademark of ORACLE Corporation. UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group. Citrix, the Citrix logo, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, MultiWin and other Citrix product names referenced herein are trademarks of Citrix Systems, Inc. HTML, DHTML, XML, XHTML are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. JAVA is a registered trademark of Sun Microsystems, Inc. JAVASCRIPT is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. MarketSet and Enterprise Buyer are jointly owned trademarks of SAP AG and Commerce One. SAP, SAP Logo, R/2, R/3, mySAP, mySAP.com and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are trademarks of their respective companies.

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Business Configuration Guide for mySAP HR ECM ....................................................................... 5 Enterprise Compensation Management: Configuration Guide .................................................... 5

mySAP.com Solution and Business Scenario Documentation Landscape ............................. 6

Business Customizing .............................................................................................................. 8

General Settings ................................................................................................................... 8

Activate Enterprise Compensation Management ............................................................. 8

Define Stock Units & Conversion Rules............................................................................ 9

Budgeting.............................................................................................................................. 9

Define Budgeting Settings................................................................................................. 9

Compensation Administration............................................................................................. 10

Define Compensation Areas ........................................................................................... 10

Compensation Plans and Reviews ................................................................................. 10

Eligibility .......................................................................................................................... 11

Guidelines ....................................................................................................................... 11

Matrix ........................................................................................................................... 11

Plan Attributes................................................................................................................. 12

Compensation Programs ................................................................................................ 12

Long-Term Incentive Plans................................................................................................. 12

Vesting ............................................................................................................................ 12

Exercise Window............................................................................................................. 13

LTI Plans ......................................................................................................................... 13

Life Events ...................................................................................................................... 13

Job Pricing .......................................................................................................................... 14

Salary Surveys ................................................................................................................ 14

Job Evaluation Data ........................................................................................................ 14

Total Compensation Statement (TCS) ............................................................................... 14

Define Settings for Total Compensation Statement........................................................ 14



Business Configuration Guide for mySAP HR ECM

Enterprise Compensation Management: Configuration Guide Purpose This business scenario configuration guide applies to the business scenario Enterprise Compensation Management with the corresponding releases of their mySAP.com application components.

The Enterprise Compensation Management business scenario offers a broad range of tools and functions to:

Streamline your compensation processes.

Keep costs under control while remaining competitive.

Motivate and retain your employees.

Use this component to:

Export detailed salary information to survey providers and import job information and survey results, allowing you to collect information on market pay for positions, to perform salary benchmarking that is, the process of determining the appropriate rate or salary for a specific job - and to eventually set up your compensation policy.

Determine the available financial resources for compensation and monitor the budgeting process.

Set up the various processes related to your compensation policy.

Set up your companys long-term incentive (LTI) plans and describe how equity compensation should be granted and handled.

Business Scenario and mySAP.com application components

Business Scenario mySAP.com application component with minimum release

Enterprise Compensation Management

SAP R/3 Enterprise HR Extension 2.00 (EA_HR 200)

Business Information Warehouse 3.1

Manager Self-Service (Business Package 50.3.4)

Contents The business scenario configuration guide contains all steps required to implement Enterprise Compensation Management. The guide specifies the sequence of the configuration activities, and their dependencies.

It includes information about the following topics:

System connections

Generating middleware

Data replication



Business customizing

Creating component-specific master data

Current settings in production operation

For further information about Enterprise Compensation Management, see service.sap.com/ibc mySAP HR Enterprise Compensation Management in the SAP Service Marketplace.

Target group Technical consultants

Application consultants

Project team members during the implementation of a mySAP.com solution

SAP customer IT department

The System connections and Data replication sections are aimed at technical consultants in particular, while the Business customizing and Creating component-specific master data sections are aimed at application consultants. The remaining sections are of equal interest to both groups of consultants. The importance of sections to the other target groups depends on their responsibilities.

Integration mySAP.com solution and business scenarios documentation landscape The system landscape has already been created, using the Master Guide and other documentation. What other documentation exists, and where you can find their latest versions, is under mySAP.com Solutions and Business Scenarios Documentation Landscape [Page 6].

Business scenario configuration guide feedback Your feedback can help us to continually improve the business scenario configuration guide. If you find errors in the configuration guide, please send a message to the component Enterprise Compensation Management (PA-EC) under service.sap.com/message in the SAP Service Marketplace.

mySAP.com Solution and Business Scenario Documentation Landscape Purpose SAP has designed a special documentation environment for the implementation of mySAP.com solutions and Business Scenarios. In the following table, you can see an overview of the individual documents that are available. Ensure that you are using current documents for your implementation.

Current single documents:

Single Document Alias on the SAP Service Marketplace (service.sap.com)



Master Guide, Installation and Upgrade Guide installation Installation and Upgrade Guides ibc

Business Scenario description ibc

Business Scenario Configuration Guide ibc

Implementation Guide (IMG) Note: Not available on the SAP Service Marketplace. Only in the SAP system.

SAP Library helpportal with each release of a mySAP.com component

Note: Available in the SAP system under Help SAP Library

The following information serves to supplement the single documents:

Current Supplementary Information:

Information Alias on the SAP Service Marketplace (service.sap.com)

SAP Notes notes for notes search

instguides with listing in the relevant Installation and Upgrade Guide

Technical infrastructure (for example, hardware sizing, platforms, network security)

ti

You can find a list of all aliases on the SAP Service Marketplace under service.sap.com/quicklinks.

Features The following single documents are available for a mySAP.com solution:

Master Guide, Installation and Upgrade Guide This document describes how you perform an installation or an upgrade of a system landscape for a particular Business Scenario. The initial document for every mySAP.com solution is the Master Guide. For each Business Scenario, this Master Guide lists the required mySAP.com application components and applications from third-party providers, and links to the corresponding Installation and Upgrade Guides. These include the Component Installation Guide, Business Scenario Guide and Component Upgrade Guide.

Business Scenario Description This document describes a Business Scenario after all components have been installed and configured. The Business Scenario Description consists of a text (Business Scenario Documentation) and a graphic (Component View).

Business Scenario Configuration Guide This document describes what settings you need to make to configure the mySAP application components and applications from third-party providers for a Business Scenario. This involves system integration, middleware, and data replication, as well as Customizing and master data.



The Business Scenario Guide explains the sequence of the individual configuration activities and the dependencies of these activities. The configuration activities can be IMG activities, transactions in SAP systems, organizational activities, and so on.

The Business Scenario Configuration Guide contains the Business-Scenario-specific information for the IMG activity. It does not repeat the IMG documentation, but refers to it in the text.

Implementation Guide (IMG) This tool helps you to adapt SAP systems for specific customers. The IMG contains the IMG activities of all mySAP.com components and includes a general documentation for the activities. The IMG is structured by components and does not represent any Business Scenario. This representation is created by the Business Scenario Configuration Guide, which refers to the IMG in the text.

SAP Library This combination contains the functional documentation for all mySAP.com components. The documentation does not refer to Business Scenarios.

Business Customizing Purpose This section contains information about the customizing settings in each system. Business customizing adjusts the company-neutral delivered functionality to the specific requirements of the company.

This involves, e.g.:

Organizational Unit Customizing

Master Data Customizing

Process Customizing

Procedure Perform the steps in these guidelines in the sequence in which they appear.

General Settings

Activate Enterprise Compensation Management Use To allow users to have immediate access to the related functionality, you must activate Enterprise Compensation Management.

Note



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.

Procedure Set the ECMON switch in Customizing under Global Settings > Activate Enterprise Compensation Management. For more information, see the documentation of the related activity.

Define Stock Units & Conversion Rules Use In this step, you define:

Stock units to uniquely identify securities and to determine whether an LTI plan is pre or post split at a given date.

The settings that are needed to perform a stock split successfully, that is, the stock split ratio (for example, a 1-to-3 split) and the rounding rules for both the award price and number of awards.

Procedure In Customizing, choose Global Settings > Define Stock Units and Stock Unit Conversion Rules, respectively. For more information, see the documentation of the related activities.

Budgeting

Define Budgeting Settings Use In this step, you define the settings that are needed for the Budgeting component.

Procedure In Customizing, perform the following activities under Global Budgeting:

Define Reference Currency for Budgeting

Define Budget types

Define Budget Periods

Set Budget Control Parameters



Compensation Administration

Define Compensation Areas Use In this step, you define compensation areas. A compensation area enables you to group employees belonging to different countries or organizational units but with similar or identical compensation processes.

Procedure In Customizing, choose Compensation Administration > Define Compensation Areas. For more information, see the documentation of the related activity.

To set a default compensation area, perform the activity Define Compensation Area Feature.

Compensation Plans and Reviews Use In this step, you streamline the compensation process by defining the following:

Compensation plan A key entity used for calculating new compensation amounts/percents/numbers, and assigned to one of the following components:

! Salary adjustment

! Regular bonus

! Off-cycle bonus

! LTI Grant

Compensation review Enables you to group sets of compensation plans to be processed within a specific timeframe.

Compensation review item Enables you to determine which compensation plans are included in a compensation review (for example, salary adjustments, bonuses and long-term incentives).

Compensation review item attributes Enables you to define the various attributes of a compensation review item (key dates, message types for checks, etc.)

Procedure In Customizing, perform the activities under Compensation Plans and Reviews. For more information, see the documentation of the related activity.



Eligibility Use In this step, you define the necessary settings concerning eligibility.

You can define:

Eligibility groupings for grouping employees with common characteristics, for example, Managers, All employees, Salaried employees only and Hourly paid workers only.

Eligibility rules for determining whether employees are eligible for a compensation plan on the basis of various criteria.

Appraisal rules for measuring employee performance based on appraisal results

Procedure In Customizing, perform the activities under Eligibility. For more information, see the documentation of the related activity.

Guidelines Use In this step, you define the necessary settings concerning guidelines.

You can define:

Guideline groupings to differentiate guidelines that apply to at least one compensation plan. For example, to grant a 10% salary increase to the board members, an 8% to executive employees, a 6% to sales representatives and a 5% to your administrative staff, you would have to define four distinct groupings.

Rules to prorate guideline amounts, percentages or numbers.

Guidelines.

Procedure In Customizing, perform the activities under Guidelines. For more information, see the documentation of the related activity.

Matrix Use In this step, you define guideline matrices, that is, guidelines based on multiple criteria.

Procedure In Customizing, perform the activities under Matrix. For more information, see the documentation of the related activity.



Plan Attributes Use In this step, you define the attributes of each compensation plan (except LTI plans) by:

Assigning eligibility and guideline variants.

Defining rounding rules.

Setting a link to Personnel Cost Planning and Simulation by assigning the selected compensation plan to the relevant cost item.

Specifying the correct wage types.

Procedure In Customizing, perform the activities under Plan Attributes. For more information, see the documentation of the related activity.

Compensation Programs Use In this step, you group:

Employees into different groupings to differentiate them for compensation purposes.

Compensation plans into compensation programs.

Procedure In Customizing, perform the activities under Compensation Programs. For more information, see the documentation of the related activity.

Long-Term Incentive Plans

Vesting Use In this step, you define vesting rules, to which you assign vesting schedules.

Procedure In Customizing, perform the activities under Vesting. For more information, see the documentation of the related activity.



Exercise Window Use In this step, you define:

Rules that enable you to determine periods during which employees are allowed to exercise their awards.

Exercise windows.

Procedure In Customizing, perform the activities under Exercise Window. For more information, see the documentation of the related activity.

LTI Plans Use In this step, you define the attributes of each LTI plan by:

Delimiting it in time and maintaining the related stock information.

Setting the default exercise price.

Specifying the correct wage types for storing the exercise price, the fair market value, the imputed income and the withheld amount.

Procedure In Customizing, perform the activities under LTI Plans. For more information, see the documentation of the related activity.

Life Events Use In this step, you define:

Life events, that is, events that occur at the employee level (marriage, termination or retirement) and that affect the administration of LTI data.

Rules for handling vesting and forfeiture following a life event.

Procedure In Customizing, perform the activities under Life Events. For more information, see the documentation of the related activity.



Job Pricing

Salary Surveys Use In this step, you define the settings concerning salary surveys. These include:

Additional pay categories and their attributes.

Compensation job groups.

Procedure In Customizing, perform the activities under Salary Surveys. For more information, see the documentation of the related activity.

Job Evaluation Data Use In this step, you define the settings concerning job evaluations. These include:

Job evaluation methods.

Groups/classifications for your job evaluation methods.

Default values for job pricing.

Procedure In Customizing, perform the activities under Job Evaluation Data. For more information, see the documentation of the related activity.

Total Compensation Statement (TCS)

Define Settings for Total Compensation Statement Use In this step, you define the settings that are needed for the employee's Total Compensation Statement (TCS).

Procedure In Customizing, perform the following activities under Total Compensation Statement:

Determine Structure of Total Compensation Statement

Select Wage Types for 'Pay' Category

Create Form for Total Compensation Statement



Determine Standard Forms for Total Compensation Statement

Determine Address Types


CopyrightIconsTypographic ConventionsBusiness Configuration Guide for mySAP HR ECMEnterprise Compensation Management: Configuration GuidePurposeContentsTarget groupIntegration

mySAP.com Solution and Business Scenario Documentation LandscapePurposeFeatures

Business CustomizingPurposeProcedure

General SettingsActivate Enterprise Compensation ManagementUseProcedure

Define Stock Units & Conversion RulesUseProcedure

BudgetingDefine Budgeting SettingsUseProcedure

Compensation AdministrationDefine Compensation AreasUseProcedure

Compensation Plans and ReviewsUseProcedure

EligibilityUseProcedure

GuidelinesUseProcedure

MatrixUseProcedure

Plan AttributesUseProcedure

Compensation ProgramsUseProcedure

Long-Term Incentive PlansVestingUseProcedure

Exercise WindowUseProcedure

LTI PlansUseProcedure

Life EventsUseProcedure

Job PricingSalary SurveysUseProcedure

Job Evaluation DataUseProcedure

Total Compensation Statement (TCS)Define Settings for Total Compensation StatementUseProcedure

Business Configuration

Documents

Transcript of Business Configuration