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© SAP 2007 / Page 2
ECM Content Overview
The mySAP HR Enterprise Compensation Management (ECM) modulesupports companies in defining, streamlining, and putting intopractice a strategic performance-based compensation programthroughout the enterprise. The system offers the following maincomponents to a complete compensation management solution:
Compensation AdministrationPerform compensation reviews including fixed pay, variable pay, and LTIs. Applyeligibility rules and guidelines based on different criteria such as performanceratings. Implement approval cycles if required feedback, and compensationadministration.Long-Term IncentivesAdminister LTI processes such as granting, vesting, life events, and taxation.BudgetingCreate and maintain monetary and non-monetary budgets for the compensationplanning and LTI granting process.Job PricingExport employee salary data for participation in salary surveys. Import salarysurvey data and create market composite results. Age and weight market data,compare internal and external pay and adjust company pay structure if required.
© SAP 2007 / Page 3
Compensation Administration
Compensation programs, plans and reviews
Unlimited number of plans supporting fixed, variable pay and stock options
Complex business rules, time dependencies supported
Eligibility
Defined at compensation program and plan level
Multiple employee, organizational and performance review attributes
Guidelines and proration
Proration rules for compensation plans proportional to employee’s eligibility
Multi-dimensional matrix, e.g. service, performance, compa-ratio
Flexible data maintenance
Exception handling supported
Salary changes tracked on payroll records (reason code on IT0008)
© SAP 2007 / Page 4
Compensation Administration II
Compensation planning tool for managers via Manager Self Service (MSS)
Configurable frontend for planning and execution of compensation changes
Employee compensation profile including job salary elements
Historical reference through notes functionality
Salaried and hourly-paid employees
Standard approval scenario
Total compensation statement
ESS enabled
Compensation review statement
Communication on compensation changes
© SAP 2007 / Page 5
Long-Term Incentives
LTI Administration
Granting process included in MSS
Vesting rules and exercise windows
Life event processing, stock splits, cancellations and forfeitures
Approval process
Standard approval scenario in MSS
Taxation in payroll
Payroll function delivered to support taxation of exercised options
© SAP 2007 / Page 6
Budgets established on monetary and non-monetary units
Budget reassignment tool
Integration with Personnel Cost Planning & Simulation
Creation of detailed line item budgets based on multiple scenarios
Budget reassignment tool supporting organizational changes
Budget monitoring tool
Budgeted vs. Spent analysis at any level of organizational hierarchy
Compensation Specialist’ user role
Budgeting
© SAP 2007 / Page 7
Job Pricing (Salary Surveys)
Data transferImport of multiple salary survey provider filesExport for participation in salary surveys
Aging of market data
Internal – external job matching with weighting capabilities
Market composite creationDerived values based on various survey dataComparison of composite results to internal compensation
Salary structure adjustmentSuggested salary structure changes based on composite analysis
‘Compensation Specialist’ user role
© SAP 2007 / Page 8
Controlling
Personnel CostPlanning and
Simulation
PersonnelAdministration
EnterpriseCompensationManagement
OrganizationalManagement
Prerequisites for use ofECM
Integration Overview
BusinessInformation
Warehouse (BW)
PerformanceManagement
(Objective Settingand Appraisals)
© SAP 2007 / Page 9
MSS Compensation Planning/Approval – Entry Point
To enter the Planning application navigate in the following path: Managers Self-Service -> Planning -> Compensation Planning
© SAP 2007 / Page 10
MSS Compensation Planning – Select
Standard Select Options are delivered offering abilityto mitigate number of employees to bring into aplanning or approval sheet.Details on Employee Search: Entry options: LastName, First Name, Middle Name, Personnel Number,Organizational Unit, Personnel Area, PersonnelSubarea
Roadmap process support
Additional links Personalization of columndisplay & filter line in list (filteris per default not displayed).
Example: MSS Compensation Planning (same selection also for Compensation Approval available)
© SAP 2007 / Page 11
MSS Compensation Planning – Select
Example: MSS Compensation Planning (same selection also for Compensation Approval available)
Selection Options:• Employees from Organizational Units• Employees from Organizational Structure
© SAP 2007 / Page 12
MSS Compensation Planning – Select
Example: MSS Compensation Planning (same selection also for Compensation Approval available)
Selection Options:• Directly Subordinate Employees• Employee Search
© SAP 2007 / Page 13
MSS Compensation Planning – Select
Example: MSS Compensation Planning (same selection also for Compensation Approval available)
Personalization of table viewvia: Strg + right mouse click
© SAP 2007 / Page 14
MSS Compensation Planning – Plan(Salary Adjustment)
Budget display and tracking.
Columns can be customized bysystem administrator andpersonalized by user if allowedby administrator, e.g. you canalso show performance ratings,reference salary or hire date.Additionally: Sorting of columns
Display of additionalinformation
© SAP 2007 / Page 15
MSS Compensation Planning – PlanExample – Integration with SAP Performance Mgmt
Via Apply Guidelines, the system can propose an amount based onthe employees performance appraisal score/result
Column with Appraisal Score
Existing Guidelines can bereviewed via clicking on anemployee’s name
© SAP 2007 / Page 16
MSS Compensation Planning – Plan(Regular Bonus Payment)
Example:Different column-setup for Regular Bonus plan
© SAP 2007 / Page 17
MSS Compensation Planning – Plan(Stock Options)
Example:Different column-setup for Stock Option plan
Example:Filtering, wild-card search possible
© SAP 2007 / Page 18
MSS Compensation Planning – Plan
Personalization of table viewand display of buttons via: Strg+ right mouse click
© SAP 2007 / Page 19
MSS Compensation Planning – Plan
Apply guidelines defined inCustomizing.
Bring selected employees tosalary range minimum.
Apply percentage specified toselected employees.
Graphical comparison ofselected employees per plan.
Functions can be shown/hidden per plan whereappropriate, e.g. Raise to Minimum not appropriate here.
© SAP 2007 / Page 24
MSS Compensation Planning – Plan
Messages appear as defined in Customizing.
The compensation planning can be reviewed beforesending for approval.
© SAP 2007 / Page 26
MSS Compensation Planning – Completed
Submitted changescan now be accessedby approving managerin ECM approvalscenario (see nextslide).
© SAP 2007 / Page 27
MSS Compensation Planning/Approval – Entry Point
To enter the Approval application navigate in the following path: Managers Self-Service -> Planning -> Compensation Approval
© SAP 2007 / Page 28
MSS Compensation Approval – Select
Same selection options as mentioned under MSSCompensation Planning.
© SAP 2007 / Page 29
MSS Compensation Approval – Approve or Reject
Approval/Rejection onindividual basis.
Approve/Reject allemployees and plans.
Get an overview of approval/rejection,check and send. See next slide.
Approving managercan read andedit/send back noteto planning manager.
© SAP 2007 / Page 30
MSS Compensation Approval – Review and Send
Go back to approval or reject stepfor changes after review or sendfinal approval/rejection.
Planning manager cancheck note, makechanges and resubmit toapproving manager.
Send to complete.
OverviewManager: Compensation AdministrationCompensation Specialist: BudgetingCompensation Specialist: Compensation AdministrationCompensation Specialist: Job PricingTotal Compensation & Compensation Review Statement
© SAP 2007 / Page 33
Budgeting Tool User Interface
Budget Maintenance:
Create budgets and maintain budget values. Import Personnel Cost Planning Data orcustom values. Also possible to maintain the budget structure such as adding anddeleting budget units as well as assigning budget or organizational units to thebudget.
Check and Release:
Check budget values are consistent. Release budgets so that they can be usedduring compensation reviews. Reset budget to planning if they have not been spent.
Budget Reassignment:
Reassign/move budget values from one budget to another when employee changesorganizational units.
© SAP 2007 / Page 34
Budget Maintenance – Create Budget
Enter budget type & period (defined inCustomizing), the organizational unit ID youwant to create the budget structure from.
Enter how many levels down you want to createthe budget structure. If left at 0, then all levelswill be taken into account.
Enter budget unitif non-monetary(LTI) budget(stock unit definedin Customizing).
© SAP 2007 / Page 35
Budget Maintenance – Display and Maintain Budget
Search for budget bydifferent criteria
Search result list.Select a budget fordetail display andmaintenance.
Enter/changebudget valuedirectly inbudget tree.
© SAP 2007 / Page 36
Budget Maintenance – Display and Maintain Budget
Only active when havingturned on the option‘Org. Unit On’.
Under budget structure, you can add, assignand delete budget units (and all subordinates),assign org. units and delete assignments (alsofor individual budget unit deletion).
© SAP 2007 / Page 37
Budget Maintenance – Percentage Change
You can change:• One value• All values below the selected budget unit• From the selected budget unit up to the highest.
You can increase and decreasebudget values by percentage. Totalbudget will then change.
© SAP 2007 / Page 38
Budget Maintenance – Import Values from PCP
You can enter up to 10 cost items.
Enter here from which personnel costplan and which cost item within thatplan you want to import data
© SAP 2007 / Page 39
Budget Maintenance – Check and Release Budget
Check for negative values.
Release budget for display & use inMSS Compensation Planning
Reset released budgets back tostatus ‘Planned’ if required forediting.
© SAP 2007 / Page 40
Budget Reassignment I
Reassigning budget values betweenorganizational units is a 4-step process.
1. Select the organizational unit that youwish to reassign values from (not thebudget unit).
© SAP 2007 / Page 41
Budget Reassignment II
2. Select an organizational unit that is toreceive the value of the organizational unityou selected in step 1.
© SAP 2007 / Page 42
Budget Reassignment III
3. The system displays the selectedorganizational units (sending and receiving) andallows you to select the amount that you wish totransfer between units.
OverviewManager: Compensation AdministrationCompensation Specialist: BudgetingCompensation Specialist: Compensation AdministrationCompensation Specialist: Job PricingTotal Compensation & Compensation Review Statement
© SAP 2007 / Page 46
Evaluate LTI Grants
This report lists all employees with LTI Grants and provides an overview aboutthe status of the grants, such as number of granted, forfeited, vested,exercisable grants etc.
OverviewManager: Compensation AdministrationCompensation Specialist: BudgetingCompensation Specialist: Compensation AdministrationCompensation Specialist: Job PricingTotal Compensation & Compensation Review Statement
© SAP 2007 / Page 51
Job analysis
Create internaljobs and jobdescriptions
1Select Survey Provider
Organization decideswhich salary surveys toparticipate in
2Receive survey data
Receive survey data(online, disk, Excel,etc.) from surveyproviders
3
Import data
Upload jobcatalog to thesystem
4Job matching
Match survey jobs tointernal jobs based on jobdescriptions
5Import data
Upload market data tothe system
6
Age data
Age marketdata toevaluation date
7Weight data
Weight market data fromdifferent provider
8Compile market data
Create composite resultfor internal jobs frommatched survey jobs
9
Job Pricing Process Overview I
© SAP 2007 / Page 52
Job Pricing Process Overview II
Data analysis
Evaluate andcompare tocurrent internalcompensation
10Determine market gap
Identify which jobs or jobfamilies requireadjustments
11Philosophy
Determine or createcompensationphilosophy of company
12
Identifytargets
Create markettargets forcertain jobs orfamilies
13Adjust salary structure
Create proposaladjustments for internaljobs. Job to be priced “at”or to “lead” or “lag” themarket.
14Activate adjustment
Adjust the currentsalary structure
15
© SAP 2007 / Page 53
Job Pricing – Functionality I
Import and store survey dataCreate and maintain list of survey providersSelect and filter information from data filesUpload function for job catalog, job descriptions and market data
Job matchingExtended search functionality for internal and external jobsDisplay job detailsMatch one internal to many external jobsWeight job matching
Age survey market dataMass agingAge all data for one internal jobAging by age factor or by market movement rate
© SAP 2007 / Page 54
Job Pricing – Functionality II
Market data analysisCreate composite result for internal jobsChange matching factor and age factor and view result
Reporting and AnalysisCompare market data to internal compensation dataCompare by job, employee, job family, etc.BW reporting: Survey job catalog, Job matching list, Job catalog with marketdata, comparison lists
Salary structure adjustmentMarket results by jobs, grade, familyCreate and maintain proposal values for salary structure adjustmentCalculate costs for adjustment
Export Compensation dataDownload functionalityParticipate in surveys
© SAP 2007 / Page 56
Imported Provider Data II
Imported survey whichrepresents imported market data.In this case the effective date ofthe market data is 1st of July,2003.
© SAP 2007 / Page 57
Imported Provider Data III
Applicable slice of market datawas provided in the importedsalary survey provider file.
© SAP 2007 / Page 58
Imported Provider Data IV
There are 4 rows of data for PayCategory because 4 differentslices of market data have beenimported and can be reviewedunder Market Criteria
Aged data of marketdata is displayed.
Imported jobdescription. In thiscase, job descriptionfor Project Manager
© SAP 2007 / Page 60
Import Data: Import Survey Job Catalog I
Import of data is a 3-step process.The 3-step process is to be done for• Survey Job Catalog• Survey Job Descriptions• Survey Market Data
1. Specify the importparameters for the import.
© SAP 2007 / Page 61
Import Data: Import Survey Job Catalog II
2. Match provider fieldnames to SAP field names.
© SAP 2007 / Page 62
Import Data: Import Survey Job Catalog III
3. Review the imported valuesfor confirmation. Click on SaveImported Data to complete theprocess.
© SAP 2007 / Page 63
Job Matching: Match Internal Benchmark Jobs toExternal Survey Jobs I
Once the data is imported, you can matchinternal to external jobs. This is done sothat market data from the providers can beconnected to the SAP structure.
Internal and external jobdescriptions can be displayed.
© SAP 2007 / Page 64
Job Matching: Match Internal Benchmark Jobs toExternal Survey Jobs II
When a match is created, you canapply a weighting factor to thevendor if applicable.In this example:Towers Perrin results are weightedtwice as much for marketcomposite result build comparedto Watson Wyatt results.
© SAP 2007 / Page 65
Aging Survey Market Data
Data may become outdatedaging of imported survey data ispossible.
© SAP 2007 / Page 66
Building a Composite Result of Market Data I
1. Under Select MarketCriteria, select theproviders you want to usefor the composite.
When more than one survey job ismatched to an internal benchmark job,then the compensation specialist needto view a composite or blended result ofthe market data. That’s a 3-step process
© SAP 2007 / Page 67
Building a Composite Result of Market Data II
2. Under Build CompositeResult, select the marketdata and click on BuildComposite.
© SAP 2007 / Page 68
Compare Market vs. Internal Data I
Compare Market vs.Internal Data:Select the compositeresult, set the parametersand click on CompareValues.
© SAP 2007 / Page 69
Compare Market vs. Internal Data II
3. Comparison can bemade and displayed onjob, position andemployee basis.
© SAP 2007 / Page 72
Salary Structure Adjustment – Plan SalaryStructure
Plan new structure by enteringvalues here and save new structureas planned salary structure.
Get planned salary structure (either existing one or createnew from market data as starting point for planning).
Display graphic e.g. for internal vs marketvalues on different aggregation levels.Possibility to show regression lines(linear, exponential, logarithmic...) etc.Possibility to analyze data based on jobgroups.
OverviewManager: Compensation AdministrationCompensation Specialist: BudgetingCompensation Specialist: Compensation AdministrationCompensation Specialist: Job PricingTotal Compensation & Compensation Review Statement
© SAP 2007 / Page 74
Provides an overview of all compensation data and benefits thatan employee received over a specific period of time, such as ayear, for example.
Payroll
Total CompensationStatement
CompensationManagement
Training & EventManagement
PersonnelDevelopment
Benefits
Total Compensation Statement
© SAP 2007 / Page 79© SAP 2007 / Page 79
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