In this article, we’ll introduce the various stages of the Compensate and Pay sequence of the Calculation process, and explain how each relates to your compensation plans.
Knowing the various stages of the Calculation is really useful, no matter your role. Running one stage at a time is useful for developing, testing, troubleshooting, and opens up the possibilities for custom data management. Although there exist a number of other stages, we will focus on the four that can be selected in the user interface: Classify, Allocate, Reward, and Pay.
Let’s start with a look at a diagram of the stages of the Compensate and Pay sequence, which shows the actions of each stage and the rules which each stage processes.
Let’s look at what happens in each of these stages.
The Classify stage has the job of classifying Transactions. In this context, Classify means to organize these Transactions so it will be easier for the rules to determine who gets credit for a Transaction. For a Transaction to be classified during this stage, the Comp Date field must be within the range for the current period as defined in the Calendar.
You can see in the diagram that the Classify stage processes Classification Rules, which are not part of the compensation plan. If you’d like to know more about how classification rules work, here’s a link to a very helpful series of microlearning video on OpenSAP.
The output of the Classify stage is a set of classified Transactions. These are not records you can see in a workspace, although you can use the Related Search on a Transaction to see how it has been classified.
The Allocate stage does two things. First, it uses the Credit Rules to allocate both Direct Credits, which originate from the Transaction, and Indirect Credits, which originate from subordinate positions, to each Postion Assignment. Second, it uses the Primary Measurement Rules to aggregate Credits for each Position Assignment.
The output of the Allocate stage, then, is a set of both Credits and Primary Measurements for each Position Assignment for the current period.
The Reward stage is an interesting one. This stage processes all of the remaining rules in the Compensation Plans: Secondary Measurement Rules, Incentive Rules, and Deposit Rules. The output, then, are Secondary Measurements, Incentives, Commissions, and Deposits, according to the settings in these rules.
If we’ve already processed all the rules, what’s left for the Pay stage? This stage is possibly the most important of all. Using the output from the Reward stage, this final stage uses all internal calculations to aggregate Deposits into trial Payments and/or Balances for the period.
Why can’t the Deposit be used on its own? There are many reasons, but here are a few common ones:
- A Payee may have several Deposits in their plan. The Pay stage determines whether each Deposit should be paid out separately, or combined with other, similar Deposits.
- Outstanding balances may be held over from prior periods. The Pay stage determines whether these balances should be applied to the current period.
- The compensation administrator may determine in the system preferences where the cutoff is between Payments and Balances. By default, a Payment is stored as a Balance if the amount is less than zero; however, it’s possible to set the cutoff to a different amount. The Pay stage then stores any amount below this cutoff as a Balance.
Now that we’ve covered the four basic steps in the Compensate and Pay stage, we’ll continue with the Post and Finalize stages. This will be coming soon.
Watch here for more blog posts on the options for running a Pipeline in SAP Commissions.