SAP HR Configuration Nagigation Steps (Part 1)

COMPENSATION MANAGEMENT CONFIGURATION

BASIC SETTINGS. 2

PLANNING AND ADMINISTRATION – COMPENSATION PACKAGES. 3

PLANNING AND ADMINISTRATION- GUIDELINES. 5

PLANNING AND ADMINISTRATION - ELIGIBILITY.. 8

PLANNING AND ADMINISTRATION - ADJUSTMENTS. 10

BASIC SETTINGS

Personnel Management à Compensation Management à Basic Settings

1. DEFINE COMPENSATION AREA (See Configuration Spreadsheet for values)

- Compensation is used for macro-level eligibility determination and is generally associated with country grouping

a. Enter Compensation Area Code (Country Grouping unless multiple compensation areas are required for one country grouping)

b. Enter Country Grouping

c. Save Entries

2. DEFINE COMPENSATION AREA FEATURE

- Sets default for employee based on country grouping.

a. Map Country Grouping to Compensation Area (Consult R/3 Configuration documentation for details on feature configuration)

3. DEFINE PLANNING PERIODS (See Configuration Spreadsheet for values)

- Period used for compensation planning

- Must encompass the effective date of adjustments

a. Enter the Planning Period which is generally the calendar year.

2. Enter the Start (January 01) and End Dates (December 31) for the corresponding planning period year
3. Enter key date

- Key Date is used for two purposes: Currency Conversion and MSS Column value determination. April 01 of the planning year was chosen because the MSS column “Compa-ratio” is determined using new pay grade ranges.

4. Save Entries

4. DEFINE INFOSET

- Infoset used by Object Manager in Comp. Admin Transactions and the Excel Spreadsheet for compensation administration.

- Custom Infoset provides fields that are not available in the standard infoset and override the standard infoset.

- Infoset must be configuration in the Global Query Area

a. Enter the following entry:

Scenario: CMPADJ

Object Type: P

Infoset: Z_COMPENSATION

Group: PPOME_P

b. Save Entry.

PLANNING AND ADMINISTRATION – COMPENSATION PACKAGES

Personnel Management à Compensation Management à

Planning and Administration à Compensation Packages

1. DEFINE COMPENSATION COMPONENTS (See Configuration Spreadsheet for values)

- Links type of compensation offered to employees with SAP delivered compensation categories (Fixed, Variable, Long Term Incentive)

- LTI (i.e. Stock Components are coded with the last the digits equivalent to the last two digits of the corresponding planning year)

a. Enter Component code and description

b. Choose an SAP delivered compensation category

c. Save Entries

2. DEFINE FIXED COMPENSATION COMPONENTS

(COMPENSATION AREA SPECIFIC)

- Define wage type on IT0008 used for activation

- For each compensation area, links compensation component with wage type on IT0008. If no wage type is specified, the primary wage type on IT0008.

- Unless there is a specific need, “BASE” is the only compensation component required for fixed adjustments

a. Enter Compensation Area

b. Enter Component “BASE”

c. Enter appropriate start date

d. Enter end date = 12/31/9999

e. Leave wage type field blank

f. Save Entry

3. DEFINE VARIABLE COMPONENTS

(COMPENSATION AREA SPECIFIC)

- Define wage type used for activation

- For each compensation areas other than US, links compensation component with wage type on IT0015. Wage Type codes for a component should be consistent across all compensation areas.

- For Compensation 10, Activation is user defined. IT0267 is created for all variable awards.

a. Enter Compensation Area

b. Enter Component

c. Enter appropriate start date

d. Enter end date = 12/31/9999

e. If Compensation Area = 10,

· Choose “User Defined” under characteristics

· Otherwise, Choose Infotype 0015 and the appropriate wage type

f. Save Entry.

4. DEFINE LONG TERM INCENTIVE

- Define wage type on IT0008 used for activation

- For each compensation area, links compensation component with wage type on IT0008. If no wage type is specified, the primary wage type on IT0008.

- Unless there is a specific need, “BASE” is the only compensation component required for fixed adjustments

a. Enter Component

b. Enter Planning Year dates for Start and End dates

c. Enter total number of shares approved by the Compensation Dept.

PLANNING AND ADMINISTRATION- GUIDELINES

Personnel Management à Compensation Management à

Planning and Administration à Guidelines

1. MATRIX à DEFINE METHODS FOR MATRIX DIMENSIONS

(See Configuration Spreadsheet for values)

- Dimension values for employees are determined by function module. The dimension method defines function module for dimensions.

- The interface parameters for dimension methods are standard. Custom dimension methods were create by copying the standard function modules. See technical/functional specification for more details on function modules.

a. Enter Dimension Method (1-9 Reserved for customer Specific Dimensions methods, A-Z for SAP delivered dimension methods)

b. Enter text and long text.

c. Enter the corresponding function module (use transaction SE37 to see function modules)

2. MATRIX à DEFINE MATRIX DIMENSIONS

(See Configuration Spreadsheet for values)

- Link dimension to a dimension method

- Define additional criteria for dimension such as dates and parameters. For appraisal dimensions, the parameter is 8 digit object code of the

a. Enter Dimension (0000-9999 Reserved for customer Specific Dimensions, AAAA-ZZZZ for SAP dimensions)

b. Choose a Dimension Method.

c. Enter a parameter (as necessary)

d. Enter Key Date. Date is assumed to be within the planning period unless previous year box is checked. If no date is specified, the begin date of the planning period is defaulted during compensation administration.

e. Save Entries.

3. MATRIX à DEFINE MATRIX GUIDELINES (HRCMP0030/31)

(COMPENSATION AREA SPECIFIC)

- Create 1-3 dimension guideline matrix using dimension defined in previous step

- Matrix guidelines are maintainable using transaction HRCMP0030 in any client

- Transport of matrix guideline is not automatic and must be forced.

- Matrix codes must be standard across all compensation areas

a. Choose Compensation Area

b. To maintain, highlight a matrix value and click on the ‘Choose’ icon. To create, click on the ‘Create’ icon.

c. On the ‘Matrix’ tab, Enter Matrix Code, Name, and Validity Period. First two digits of the matrix code should reference the corresponding compensation component.

d. On the ‘Dimensions’ tab, choose one or more dimensions.

e. On the ‘Entry Values’ tab,

i. Choose the appropriate field (Amount, Percent, Number)

ii. Click to the appropriate characteristics as defined by requirements (Default, Minimum, Maximum)

iii. Choose the appropriate message type (if required)

f. On the ‘Calculation Variant’ tab, choose the appropriate Calculation Variant. In general, ‘Absolute Amount’ is always used. It applies the same guideline each time a guideline is applied. ‘Difference’ causes a guideline to be added to an existing adjustment value, if one exists, each time the guideline is applied.

g. Save Entries

4. DEFINE GUIDELINE GROUPS (See Configuration Spreadsheet for values)

- Logical grouping of employees for guideline definition.

- As of GEMS Rollout 2, the requirement is a distinction between hourly and salaried. Future guideline group distinctions may be necessary in the future.

- Guideline groups apply to all compensation areas.

a. Enter Guideline Group and Description

b. Save Entries

5. DEFINE GUIDELINE GROUP FEATURE

- Defaults guideline group based on Employee Group, Employee Subgroup and Personnel area (Consult R/3 Configuration documentation for details on feature configuration)

6. DEFINE GUIDELINE (See Configuration Spreadsheet for values)

(COMPENSATION AREA SPECIFIC)

- Define Guideline code and text consistently across all compensation areas

- Guideline codes are generally equivalent to the corresponding adjustment type code.

a. Choose Compensation Area

b. Enter Guideline and Text description

c. Save Entries

7. ASSIGN GUIDELINE ATTRIBUTES

(COMPENSATION AREA SPECIFIC)

- Associate guideline groups with guideline and define the appropriate guideline type for each guideline group.

- Although configuration is generally consistent across compensation areas, some compensation area specific difference may be necessary in this step.

a. Choose Compensation Area

b. Choose Guideline

c. Choose Guideline Group (One entry is necessary for each appropriate guideline group)

d. Enter Characteristics:

- If Fixed, Enter the calculation variant along with the appropriate fixed value

- If Matrix, Choose a matrix from the dropdown menu

- If User Defined, a user exit must be activated with code in place (As of GEMS Rollout 2, there are no user defined guidelines. Any customization is done in the Matrix Dimension methods)

PLANNING AND ADMINISTRATION - ELIGIBILITY

Personnel Management à Compensation Management à

Planning and Administration à Eligibility

1. DEFINE ELIGIBILITY GROUPS (See Configuration Spreadsheet for values)

- Logical grouping of employees for eligibility definition.

- Eligibility groups apply to all compensation areas.

a. Enter Eligibility Group and Description

b. Save Entries

2. DEFINE ELIGIBILITY GROUP FEATURE

- Defaults Eligibility Group based on fields such a Employee Group, Employee Subgroup, and Personnel Area.

- As of GEMS Rollout 2, Distinctions are necessary for executives, sales incentive employees, and union vs. non-union.

3. ADDITIONAL ELIGIBILITY CRITERIA à DEFINE PAY GRADE CRITERIA

- Define pay grade ranges for eligibility purposes.

- In general, unique pay grade criteria is defined for each adjustment type (if required)

a. Enter Pay Grade Rule and Text

2. Highlight the Pay Grade Rule and Click on ‘Grades’
3. For each combination of country code, pay grade type, and pay grade area, define the appropriate group/level range for the corresponding adjustment type.
4. Save Entries

4. ADDITIONAL ELIGIBILITY CRITERIA à DEFINE PERFORMANCE CRITERIA

- Define Performance criteria for eligibility purposes

- In general, a rule is defined for each type of performance appraisal.

- Should only be used when an appraisal must exist in order to determine employee eligibility

a. Enter Performance Criteria Rule and Text description

b. Choose the appropriate appraisal model

c. Enter Key Day and Month. In general, performance appraisal are created for previous periods. Therefore, click the “Previous Year” check box as necessary.

d. Save Entries.

5. DEFINE ELIGIBILITY RULES

- Link appropriate Eligibility Groups with Eligibility Criteria.

- Defined the Seniority and Work schedule requirements as necessary

- In general, there is an eligibility rule defined for each adjustment type. In some cases were eligibility is consistent across all adjustment types within as adjustment reason, one eligibility rule is defined for multiple adjustment types.

1. To create a new rule, click on “New Entries” button and enter Eligibility Rule and Description. In general, the name of the rule relates to the corresponding adjustment type.
2. Highlight the eligibility rule and click on “Eligibility Criteria”
3. One entry is required for each appropriate eligibility group. For a new entry, click on the “New Entries” button and choose an eligibility group.
4. Configure a seniority rule as appropriate for the adjustment type:

- Seniority is calculated based on a fixed date (starting point) within the planning period and counting back.

- Number of days is the number of days to count back from the starting point.

- Key Date is the starting point.

- Date type is the date type referenced from IT0041.

5. Enter a minimum work schedule, in hours, if required for the adjustment type.
6. Choose any additional criteria, as defined in previous steps, as necessary.
7. Save Entries

PLANNING AND ADMINISTRATION - ADJUSTMENTS

Personnel Management à Compensation Management à

Planning and Administration à Adjustments

1. WAGE TYPES FOR ADJUSTMENTS à CREATE WAGE TYPE CATALOG

(See Configuration Spreadsheet for values)

- Wage Types are copies of standard model wage type CM01-CM04 and CSAL.

- Wage Types must be consistent across country groupings.

- If model wage types do not exist for a country grouping, consult OSS notes 368606, 185343, 167275.

- All wage types are included in wage type group 0380.

- Use option under the IMG step “Checking Wage Type Catalog” to verify wage type configuration

3. Choose “Copy” as the method of maintenance.
4. Select the Country Grouping.
5. Enter an existing wage type in the “Old Wage Type” field.
6. Enter a new Wage Type, Text, and Short Text in the “Copy Wage Type” area. (must begin with a “9”)
7. Uncheck “Test Run” (as necessary)
8. Click the “Copy” button.

2. WAGE TYPES FOR ADJUSTMENTS à DEFINE VALUATION OF BASE WAGE TYPES

- Defines wage types used for calculation base.

- For annual salary, must be equivalent to configuration for IT0008 Annual Salary. Individual may differ based on country requirements.

- All countries must have a ‘9SAL” valuated wage type configured for consistency across country groupings

1. If a new entry, Click the “New Entries” button.
2. Enter the following values for each wage type used on IT0008 :

- “ANSAL” as the valuation module.

- “9SAL” as the valuated wage type.

- The next whole number, “1:” for initial entry

- Appropriate Start Date and End date

- Choose IT0008 wage type

- “100” as the Percent

(Hint: Copy all valuated wage type entries for IT0008 Annual Salary and change the valuated wage type to “9SAL”)

3. DEFINE WAGE TYPE MODELS FOR ADJUSTMENTS

(COMPENSATION AREA SPECIFIC)

(See Configuration Spreadsheet for values)

- The wage type model defines the wage types for a compensation adjustment. An adjustment is made up of 1-10 adjustment wage types.

- Each adjustment wage type can be linked to a guideline (as necessary)

- Rounding Rules are configured for each adjustment wage type as necessary.

- Wage Type model should be kept as consistent as possible across multiple compensation areas.

- Text used for wage type models must relate to the corresponding adjustment type.

1. Choose a Compensation Area.
2. To create a wage type model, click the “New Entries” and enter a Wage Type model.
3. Highlight a wage type model and double click on “Wage Types”
4. Configure an entry for each required adjustment wage type:

- Enter a sequential number

- Enter an appropriate start and end date

- Choose an appropriate wage type from the dropdown

- Choose a guideline (if required).

- Choose a rounding type and degree of exactness (if required). For example, “100” rounds to the nearest dollar (for US employees)

5. Save entries.

4. DEFINE ADJUSTMENT TYPES

- Define adjustment types and text.

- Link adjustment types to compensation components.

- Standard for naming convention (as of Rollout 2) for 4 character code across ALL compensation areas is as follows:

	Examples	Position 1	Position 2	Position 3	Position 4
Merit Increases and Other Salary Adjustments	AAM1 AEM1	“A” - Activated	Two characters unique to the adjustment		Sequential Number
Corporate Bonus and other Bonuses	PB1T AB1 AB1N	“A” – If activated “P” – If for Planning and/or Information	2-3 Characters equivalent to the corresponding compensation component
LTIP		“L”	“A”- LTIP Award “S” - LTIP Standard	Last two digits of the planning year

Configuration Steps:

a. Enter a adjustment type and text description.

b. Enter valid start date and end date.

c. Choose the appropriate compensation component

d. If the compensation component type is not fixed (i.e. “BASE”), click on Hide Total Amount Total.

5. ASSIGN ADJUSTMENT TYPES

(COMPENSATION AREA SPECIFIC, See Configuration Spreadsheet for values)

- Assign attributes to adjustment types for each compensation area.

- Links guidelines, eligibility, and wage types to the corresponding adjustment type.

1. Choose Compensation Area.
2. Choose an Adjustment Type.
3. Enter valid start and end dates.
4. Enter the Effective date of the adjustment. As of GEMS Rollout 2, all effective dates are fixed. Choose a Month and Day within the planning period based on requirements. Effective dates should be coordinated with GEMS Payroll
5. Enter Calculation Base data:

- Choose ‘Calculation Base” as appropriate. As of GEM Rollout 2, the calculation base for fixed adjustments is wage 9SAL. For variable components, a user exit is used (See technical/functional specification for more information).

- Enter a key date for determination of the calculation base. As of GEM rollout 2, the calculation base for fixed adjustments is the “Effective Date”. For variable components, the key date is the end date of the previous planning period.

6. Choose corresponding Wage Type Model.
7. Choose corresponding Eligibility Rule.
8. Save Entries.

6. DEFINE ADJUSTMENT REASONS

- Groups adjustment types into a single adjustment reason for planning purposes.

- If budgeting used, budgets are assigned to adjustment types.

a. If new entry, Click “New Entries” button and enter a two character adjustment reason and text.

b. Enter the appropriate time unit for planning

c. Highlight an adjustment reason, and double click “Compensation Adjustment Details”

d. Choose one or more adjustment types as appropriate.

e. Save Entries.