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Chapter 2- SAP Enterprise Compensation Mgmt.

The key to effective compensation management, is knowing what you need before you set up your plan.  In this chapter, we will look at how SAP HCM EnterpriseCompensation can help you achieve your goals effectively.

In this chapter, we will briefly review the alignment of compensation management with ECM. We will touch on the front end and the backend of ECM and highlight the functionality and flexibility of this tool. The objective is also not to regurgitate the information available in the SAP documentation but to put it in the right context and flow so that the reader gets the 360 view of the object we are talking about.

Enterprise Compensation Management provides a lot of functionality, including:

  • Configuration of complex and global compensation plans including multiple currencies
  • Enabling line managers to take direct control for compensation planning and approval of comensation awards and removing the HR people from mundane administration
  • Providing decision makers with dynamic multi-source market data for benchmark jobs.
  • Providing compensation tools for effective management of budgets
  • Providing Total Compensation Statements for employees for effective communication

   The areas that are not covered by ECM include 

  1. In-direct cash compensation like Medical benefits
  2. Perquisites- Company car
  3. Education reimbursements
  4. Sales Incentive Programs (that are based on actual sales figures)
  5. Step Increase for union/ hourly workers.

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