Managing Employee Compensation

Purpose

You can use this business process to manage all aspects of employee compensation, including:

1. Configuring your system

2. Administering compensation plans

3. Reviewing compensation

4. Managing compensation budgets

5. Managing Long-Term Incentives (LTIs)

6. Job Pricing

7. Producing Total Compensation Statements

Process Flow...

Execute Salary Survey & Benchmarking (SAP ECC)

Here you can analyze, evaluate and determine the compensation level for specific jobs, based on the current market rate. This enables you to offer competitive compensation packages that attract the best possible pool of applicants, thereby enabling you to hire the best possible employees for your organization.

Change Pay Structure (SAP ECC)

Define Compensation Structure and Plans (SAP ECC)

A compensation plan is a key entity that allows you to calculate the new amount or quantity of a salary component following a review.

Compensation plans are assigned to compensation categories, which help you determine which master data records are updated/generated on activation of infotype Compensation Process (0759).

Define LTI Plans (SAP ECC)

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

Define Compensation Budgets (SAP ECC)

Start Central Compensation Review Process (SAP ECC)

A compensation review helps you determine the set of compensation plans to be processed within a specific timeframe called compensation review period.

A compensation review may include salary adjustments, various bonuses and long-term incentives (LTIs). In addition to period-dependent reviews, you can also define spot reviews to reward employees for outstanding performance. Spot reviews can be processed anytime and as often as required.

Start Decentral Compensation Review Process (SAP Enterprise Portal)

Central Monitoring of Compensation Budgets (SAP ECC)

Here you can check the accuracy of the budgets you have created, release/finalize your budgets, and reset the status of released budgets.

Decentral Monitoring of Compensation Budgets (SAP Enterprise Portal)

Activate Compensation Adjustments & Payroll-Relevant Data (SAP ECC)

Transfer LTI Grant Data to Bank (SAP ECC)

Once awards have vested, the eligible employees are allowed to exercise them via a bank or broker, that is, to buy the stock to which they are entitled at a predetermined price. To do so, you must send the required data to the bank or broker, which then stores it in his own information system.

Receive LTI Exercising Data from Bank for Payroll Processing (SAP ECC)

Once your employees have exercised their awards online and all transactions have been deposited into their accounts, the bank or broker sends the up-to-date exercising information via the SAP Business Connector, which maps and converts the XML file back to IDoc format, so that you can update infotype LTI Exercising (0762) accordingly.

Compensation Review Statement (SAP ECC)

Here you can generate an overview of the compensation granted to a group of employees.

Total Compensation Statement (SAP Enterprise Portal)

The Total Compensation Statement is an online statement in PDF format containing a list of all the compensation elements and benefits paid by the company to an employee within a specific timeframe, typically one year. It can be generated by either the employee himself in Employee Self-Service, the HR Administrator or the Compensation Specialist for mass printing. For this purpose, two reports are available in the SAP System to generate the statement either on an individual or on a collective basis (mass-printing).

Transfer Analytics Data to BW (SAP BW)