Chapter 8- Awarding employees

Awarding the employees for their hard work and efforts is very important.

The objective of this chapter to cover the process of awarding employees eligible for compensation plans. We will explore the 2 ways of awarding. We will introduce Manager Self-service for the first time. We will also see how the compensation specialist can affect that change. We will take the happy path and explain the entire configuration. Then in subsequent chapters pick up as many exceptions as possible.

8      Awarding Employees

The whole purpose of compensation planning is to award the employees for their contributions. Each company has different approach to this. Some companies are more decentralized and allow managers that lower levels to make decisions on the awards, the other are more centralized and the decision making takes place at a higher level in the organization. In some companies, the lower level manager does initiate the award but then it has to go through hoops of approval. Most of these processes are supported by the system with some limitation. The limitations come from the fact that it is very difficult to create a system where processes are not standardized. For example, if Sales wants are much decentralized system and IT wants a very centralized system, it will become difficult to build one consistent system efficiently and maintain it efficiently.

During the awarding process, all the items come together. We will see the budgeting information, we will see eligible and ineligible employees, we will see where the guidelines are applied. We will also see how the compensation plan, compensation review and compensation review items play into the mix.

8.1      Manager Approval Process

The portal provides a great front-end for the manager to process awards to the employees. The manager will need to login to the Manager Self-service.

Figure 8.1   Manager Self-Service starts

There are many things that a manager can do with MSS. We will navigate to the compensation management section. Manager Self-service • Planning • Compensation Planning

Figure 8.2   Navigate to Compensation Planning

Clicking Compensation Planning launches the page Figure 8.3. You will now see the Compensation Reviews that we have configured. We have chosen the ‘Annual Review’ below. After selecting the process, we select the employees based on the organizational unit they belong to. We then move to on to Plan mode.

Figure 8.3   Select the employees for award process

Before we move out of the screen, let’s review the screen in a little more detail.

It lays out the steps at the top of the screen. In our case, there are 4 steps:

§   Select- Select the employees to be reviewed

§   Plan- Plan their award

§   Review and Send- Review and send the award proposal to the one up manager

§   Completed- See the overview and changed status.

It’s important to select from the list of Compensation Review, which review we want to do. In our case, it’s Annual Review. After that you need to select the employees and click Plan, the page Figure 8.4 comes up.

The compenation review items are represented by the tabs. Each compensation review item will show the eligible and ineligible employees along with the relevant budget information.

Typically, an employee is reviewed for merit plan and bonus plan. If the employee is on a higher side of their pay range, then there might be an option to provide a lump sum merit bonus to avoid them from crossing over the pay range. Also if the organization feels that there needs to be equity adjustment that has to be made any male/ female pay alignment or other kinds of adjustment then an equity adjustment can be given separately. These different adjustments are helpful since it helps in reviewing each categories different and managing them appropriately.

Figure 8.4   Annual Review with multiple plans

The executives are sometimes awarded with Long-term incentive plans or stock options. This award can be included in the Annual review cycle. If an employee under a manager is eligible, the manager can award the employee.

Figure 8.5   Annual Review with Stock Options Plan

Before we move on, let’s see what else is on the screen.

You would continue to see the steps to complete on the top. The ‘Show Statistics’ and ‘Show Additional Information’ provide information to the manager to help them make their decision. The manager can see the budget information on the screen itself. The can also click on the employee or position to see extended information on them.

All the compensation review items that we saw in the previous screen Figure 8.5 have been configured using the path in the screen below Figure 8.6.

Figure 8.6   IMG path for adding review items

Each of the compensation review items are maintained here so that they can be reviewed when the manager is in the MSS.

Figure 8.7   Adding a compensation plan to the compensation review as a compensation review item

8.1.1       Configuration of the Portal Screens:

The employees seen in the team viewer are not directly controlled by configuration for ECM but are driven more so from the portal configuration.

What you see in the team viewer is controlled by the configuration in the Object and Data provider section of the IMG.

Figure 8.8   Object and Data Provider

Changing the column headings for the Portal

We will see how we can change the column name. We can change the default column name from Employee to Employee name’ by following the configuration path below and changing it on the screen Figure 8.9

IMG • Integration with other mySAP components • Business Packages/ Functional Packages • Manager Self-Service (mySAP ERP) • Object and Data Provider • Data Provider • Define Columns

Figure 8.9   Changing the column names on the Portal

Changing the employee population displayed

Under each compensation review items, the standard SAP configuration will show all eligible as well as ineligible employees who are the subordinates of the manager. Currently it will show all the employees with a column that shows whether they are eligible or not.

Figure 8.10   All employees displayed

If you want to see only the eligible employees, please refer to SAP note 919298 for detailed steps.

8.2      Employee Record Update

When the manager saves an employees award, it creates the infotype 0759 in the R/3 system.

Figure 8.11   Compensation Process Infotype 0759

The awards normally follow an approval process. ECM doesn’t provide any standard workflow to handle approvals hence any workflow requirements has to be done as a custom development. The different status are Planned, Submitted, Approved, Rejected, Active. When the record is being created for the first time and has not yet been saved, the portal will show the status as New. Once it’s saved, the status will become Planned. Then it gets submitted to the manager’s manager, the status is Submitted. Depending on decision, the record will either be Rejected or Approved. Till this point, everything is happening within ECM. All the approved records need to be paid and this is when the last step happens. It can’t be done by the managers but it needs to be done by the compensation specialist. They ensure that at the right time, the status is moved from approved to active.

Figure 8.12   Activating the award

Once the compensation specialist runs the process in test mode, they can check if there were any errors or issues. If the result is as you expect, then remove the test run flag and let the program make updates to the right infotypes viz Basic Pay, additional payments, off-cycle payments or any other infotype as per the activation BAdI.

The selection criteria are very flexible. It also allows for the employee selection based on an Org structure. The compensation specialist can make any change to the status of the award using this program. It is important to review the important OSS notes.

8.3      Technical Points

The configuration of different plan attributes is a critical part.

Figure 8.13   Configuration of plan attributes

Based on the compensation area, the compensation plans are available for maintenance. Each plan is displayed with its start date and end dates.

Figure 8.14   Different Plans

We select the plan we want to maintain. The core attributes are eligibility of the plan, guidelines associated with plan and rounding rules for the plan. Also the plan can have different attributes in different time period. This scenario can happen when there is a change in company policy for th plan.

Figure 8.15   Setting up the compensation plan attributes

Payroll integration is very important. We can select the plan we want to maintain in the similar steps for configuring the payroll data.

Figure 8.16   Plan selection for payroll configuration

We also need to define the wage type that needs to be updated on employee’s IT 0008, 0015 or 0267 when the compensation award is activated. This is defined here and one wage type can be captured. If more wage types need to be captured, then custom solution needs to be used.

It is also required to provide the calculation base for calculating the increases.

If a particular reason is associated with compensation that needs to be captured for the off-cycle payments, it needs to be provided here.

Figure 8.17   Setting up payroll attributes and off cycle reason if necessary

If the calculation base is not based on standard annual salary calcuations, ECM provides the BAdI HRECM00_CALCBASE to design the custom program.

Figure 8.18   Business add-in for calculation base

There also other BAdI that are available to provide flexibility but it comes at a cost of creating your own code and testing it out. ECM has been cognizant of the fact that your might want to use the standard feature most of the time and only use custom code for exception. Though once the BAdI has been activated, it will always be executed, ECM provides the routine from within the BAdI to call standard feature.

Figure 8.19   Other setting to assist in checking consistency before making the award

Implement this Business Add-In to define additional customer-specific consistency checks. Whenever the manager performs an action in the Manager Self-Service Compensation Scenario, consistency checks are performed on the changed or selected data. The standard routine already inlcudes several checks, for example guideline and budget checks, before you can save the data.

This Business Add-In consists of the method described below, to which you can add customer-specific checks. These checks can be used to reject data records and generate error messages. To allow checks involving more than one person or plan, the method is not called for each record separately, but only once per dialog step receiving the complete set of records in internal tables.

For Example: You want to ensure that the effective date for a particular compensation plan is within the months in which the employee's anniversary falls. If the manager enters a date outside this period, the system should generate an error message.

Figure 8.20   Business add-in for check consistency of data

Implement this Business Add-In to change the activation process and determine the new records of secondary infotypes. It consists of the methods described below.

ACTIVATE_PROCESS: During the activation process, the system does not only change the status of the infotype Compensation Process (0759) record in the standard coding, but also creates or updates a record of a secondary infotype. Depending on the plan category, this can be either infotype 0008, 0015, 0267 or 0761. This method enables you to replace the update or creation of the secondary infotype during the activation, for example by an update of a customer-specific infotype. The other part of the activation, that is, the modification of the status of the 0759 record to Active, remains unchanged.

For Example: You want to process compensation plans that on activation should not update any of the standard secondary infotypes but a customer-specific infotype. In this case, you must implement method ACTIVATE_PROCESS.

You want to apply a rounding rule on updating infotype 0008 records when a salary adjustment is activated. In this case, you must implement both methods ACTIVATE_PROCESS and CALC_SAL_ADJUSTMENT.

Figure 8.21   Business add-in to make changes to infotypes updated with activation of the awards

Implement this Business Add-In to make changes concerning the evaluation of an employee's base salary and salary-related quantities.

For Example: The employee's salary should be evaluated based on the data stored on a customer-specific infotype.

The compa-ratio or percent-in-range should be calculated using reference or minimum, maximum salary values stored in a customer-specific table.

Figure 8.22   Business add-in with evaluation of employee’s base salary and salary related quantities

When a manager is awarding an employee using the standard MSS transaction, it is important to test it thoroughly before releasing it. The following kinds of errors are easy to fix.

Figure 8.23   Missing eligibility configuration

The table series beginning with T71 is used for ECM. These tables are populated using by configuration but the errors refer to a table. You might need to use transaction SE16 to see the content of the table and decipher which configuration needs to be fixed.

There are multiple SAP notes that are very useful and should be reviewed and its impact well-understood to design a good system.

8.3.1       Object/Infotype details

8.3.2       Limitations

8.3.3       User Exits

8.4      Summary

In this chapter, we have covered the different configuration relate to compensation plan configuration. The MSS has been introduced for the first time with some of the navigation aspects. We also reviewed how the R/3 configuration plays out on the Portal for compensation review, compensation review items, budget, eligibility and guidelines.