Topic 61: Compensation Management

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Job Pricing

In this section of the Implementation Guide (IMG), you set up your salary structures and configure the system so that it can process and store survey data and job evaluation results.

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Pay Structures

In this section of the Implementation Guide (IMG), you set up your salary structures by defining your pay scale / pay grade structures and regions.
Salary structures are required by the Planned Compensation infotype (1005) and the Basic Pay infotype (0008).




Define Pay Grade and Pay Scale Types

In this step, you can define your pay scale types as well as your pay grade types.

Note
If you have already implemented the Personnel Administration component, you will have already defined all the pay scale types that you require.
Pay scale types and pay grade types are stored in the same table. You can either use the same distinctions for your pay grade types as you do for your pay scale types or you can define your own pay grade types.
If you have not already defined your pay scale types, see Define pay scale type

Activities
1. Determine which pay grade types you need in your own organization
Example
Management
Non-management

2. Choose New entries
a) Enter the relevant data to define your pay grade types
b) Enter a two-character code and a text

3. Save your entries


Define Pay Grade and Pay Scale Areas
In this step, you can define both your pay scale areas as well as your pay grade areas.

Note
If you have implemented the Personnel Administration component, you will have already defined all the pay scale areas that you require.
If you have not already defined your pay scale areas, see Define pay scale area.

Pay scale areas and pay grade areas are stored in the same table. You can either use the same distinctions for your pay grade areas as you do for your pay scale areas or you can define your own pay grade areas.

Activities
1. Determine which pay grade areas you need in your organization
Example
City
Non-city
2. Choose New entries
3. Enter the relevant data to define your pay grade areas
4. Enter a two-character code and a text
5. Save your entries


Define Pay Scale Groups And Levels
In this step, you represent the collective agreement governing payment of your employees in the SAP system.

Example
You would like to enter wage types in the Basic Pay infotype (0008) which should be valuated indirectly using the pay scale groups/levels.

Requirements
Pay scale types and areas must be defined.
The collective agreement provisions for each employee group and subgroup must be defined.

You must familiarize yourself with the collective agreements valid in your enterprise.

Standard settings
The SAP standard system contains model entries.

Recommendation
Use the above functionality.
Actions
1. Check the SAP model entries.
2. Delete any unnecessary entries.
3. Set up the pay scale classification and related data according to your requirements.
Take note of the field documentation for the individual fields.
a) In the dialog box, make your entries in the Pay scale type and Pay scale area fields.
b) Choose New entries.
c) Set up the collective agreement provision in the Grpg field as a means of differentiating between pay scales for the various employee subgroups.
d) Enter the pay scale groups and levels according to the valid collective agreement for a specific date.
e) Enter the wage type key in the Wage type field, if required.
This entry is used to check an employee's pay scale data and for indirect valuation.
f) Enter values in the Amount and Currency fields.


Define Pay Grades And Levels
In this step, you define your pay grades and levels to make up your salary structures.
Requirements

You must have already defined your pay grade types and areas. For more information, see Define Pay Grade Types and Define Pay Grade Areas.
Standard settings

The SAP R/3 System contains sample pay grades and levels that you can modify, copy or use as a basis for creating your own.
Activities
1. Determine which pay grades and levels you require in your organization
2. Enter a country grouping and choose Continue
3. You must now define your pay grades and their attributes, to do so, choose New entries or Copy
4. Now:
a) Choose a pay grade type and region
b) Enter an identifier of your choice for your pay grade
c) Define the validity period by entering a start and end date
d) Enter a currency and a unit of time
5. Save your entries
6. You must now define your pay grade levels:
a) Select a pay grade and choose Pay Grade Levels from the navigation area
b) Choose New entries and enter a minimum, maximum and reference salary for each of the pay grade levels. The reference salary can represent the midpoint, but it is freely definable.
Note

You can also use the Generate Salary Structure function to generate your salary structures. The system then writes this data into this table for the pay grades and levels.
7. Save your entries

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Job Evaluation Data

In this section of the Implementation Guide (IMG), you define the different job evaluation methods and groups that you use in your organization.