Using the Compensation Administration (CA) application, you can link employees’ performance to their compensation. In the first two parts of this series, published in December 2003 and January 2004, I showed you how to budget for and plan a compensation or award plan. Now I’ll describe the administration and distribution of adjustments through the CA module.

In the examples below, I will first describe and show a sample of the administration screen using MSS; the second example and explanation describe the administration process though the SAPGUI. Both examples are relevant for versions 4.6C and Enterprise Core 4.7, HR extension 1.1.

MSS Process

The MSS iViews for CA are the tools by which the appropriate managers administer increases, verify budget restrictions, and submit increases and adjustments to higher-level managers. An iView is a formatted screen that provides overview and detail information for specific management functions as well as integrated links to other associated tasks (workflow, etc.). Standard iViews are delivered with the SAP MSS function, and customers can also create their own iViews. The compensation plan definition controls not only which employees a manager can administer through MSS (eligibility) but also how much a manager can award to a particular employee (guidelines and budget).

Figure 1 shows a Compensation Planning iView in MSS used by authorized managers to administer a plan. A manager selects the organizational units for which he is responsible. When the manager selects the org units to administer, the view as displayed in Figure 1 allows the manager to review employee data, automatically apply reward amounts, and submit reward information to his own manager for review, approval, or rejection.

Figure 1

CA screen used to administer a plan using MSS

From this screen, the manager may perform many functions, including:

• View which employees are eligible for the selected award type. If an employee is not eligible, the Status column displays a red light and the data entry fields are blocked for that employee.
• Apply guidelines to the selected or to all employee records. The Apply guidelines function defaults an amount to the employee record based on the configuration that has been defined for the award type.
• Apply a percentage amount to the selected record or to all employee records. This action allows the manager to model amount distribution by entering a percentage amount for the award.
• Manually make adjustments to default award amounts populated by guideline application.
• Monitor the amount distributed to employees against the amount budgeted for the reward. If employees from multiple organizational units are included in the manager’s planning view, a sequence number determines which employees are linked to which budget amounts.
• Drill into the employee’s detailed information to review master data that is relevant. Figure 2 displays a sample of one of the views that can be displayed when the manager clicks on the employee name or on the summary information for the employee.
• Submit rewards to his manager for review and approval.

Figure 2

Sample view of an employee detail iView in MSS

SAPGUI Process

If compensation administration is performed through the SAPGUI and not in MSS, the adjustment screen utilized for this process is different from the MSS iView. The GUI screen is shown in Figure 3. The same basic functions are available for the manager to administer the bonus or pay adjustment as through the MSS iViews, but as you can see, the look is significantly different. Budget amounts and distributed amounts are shown, and only eligible employee records are open for date entry.

Figure 3

Compensation adjustment Change screen using SAPGUI

Standard Workflow Processes

Through both the GUI and MSS administration, standard SAP workflow processes are available so that compensation data can be submitted by a manager to his manager for approval or rejection. Notification messages for each step can also be accessed through the MSS screens, simplifying access for managers who have this tool available. When all employee records are approved, any additional reviews that are required can be completed by the compensation department or executive team. The data is then activated, usually by a compensation specialist. Activation automatically creates new pay infotype records to reflect the changes.

Throughout the administration process, data on each award type is captured in a specific compensation history infotype, where it is available for review and reporting.

Finally, employees are notified of an award or adjustment. Standard SAP total compensation statements can be created for employees, who can access them through self-service functions. Custom letters can be created and delivered via self-service. Some companies prefer to generate letters or notifications centrally, and this is also supported in standard CA functions. Frequently, companies require a combination of the two approaches.