How to Use Standard Configuration to Automate Declining Negotiated Leave Balances

  • by Jennifer Adams, Principal Consultant, AspireHR
  • November 3, 2010
Many organizations allow their HR department to provide additional leave entitlement for potential new hires as part of a negotiated employment contract. In most cases, the additional leave entitlement is reduced as the employee’s seniority increases and, once the combined level is reached, is dropped altogether. This may also occur during an acquisition if the company acquired has more generous entitlement plans than the acquiring company. The employees are not “grandfathered” into their old plans, but are allowed to keep the additional leave entitlement. Once their seniority increases and reaches the level that entitles them to the current entitlement value in the acquiring company’s existing plan, they then revert to the acquiring company’s standard leave plans and seniority levels. You can manage this process within standard configuration and rules in the Time Evaluation schema and prevent the manual calculations and adjustment to the quota balances that you would otherwise have to complete annually.
Key Concept
Negotiated leave is additional paid time off that an employee is provided based on an agreement with the employer. The leave does not generally follow any set amount, but varies by employee based on the circumstance. It is generally given outside of the policy requirements of the paid leave plan. This differs from providing hardship banks — for example, extended illness leave. Hardship banks are generally given after all other paid leave entitlement has been exhausted. They are reserved for special circumstances and are provided only once.

If you configure SAP ERP HCM quota functionality properly with the judicious use of Time Evaluation rules and configuration, it can replace many of the manual tasks your HR department is frequently required to perform. This includes tracking additional paid time off given to new hires as part of a compensation package or agreements entered into by management for acquisitions. There may be other business scenarios in which the configuration to automate this process would be applicable or adaptable.

By automating this process, you not only relieve HR from the task of adjusting vacation for select employees each year, but once this process is established and the initial entry is performed, the system takes over the calculation and creation of the appropriate amounts. This reduces errors and allows you to establish a standard methodology that meets the base requirements and provides maximum flexibility.

I provide the basic setup of the quota configuration required and the rules that you can use as a base in your own environment to meet this type of business requirement. The rules are provided as a guideline and may need to be tailored for your specific system configuration and requirements, as each organization has its own naming conventions, existing configuration, requirements, and accrual schedules. I do not provide instructions on how to perform full quota configuration, but provide the required base time evaluation and quota configuration.

Configure the Time Types

A time type is a bucket used within Time Evaluation to track various balances. The time type is used to cumulate attendances and absences or combinations in configuration to generate values or control processing, and to facilitate calculation of values within Time Evaluation. To meet the requirements of the process I am describing, you need three time types. As the negotiated vacation value may vary by employee, providing a standard constant value (e.g., 40 hours) is not an option. The first time type holds the value for the negotiated vacation to meet this requirement. The second time type holds the previous year’s negotiated vacation and the third facilitates the difference calculation to determine if an adjustment is needed.

Jennifer Adams

Jennifer Adams has 15 years of SAP ERP HCM experience and currently works as a principal consultant with AspireHR, specializing in Time Management and US payroll. She will be a presenter at the HR 2011 conference to be held March 8 to 11 in Las Vegas. Her topic will be “A Comprehensive Guide to Configuring, Integrating, and Optimizing the Family Medical Leave Act (FMLA) Workbench.” Jennifer also has experience with Compensation Management, Personnel Administration, and Benefits. Before that, she spent 12 years in systems analysis and design for mainframe environments, supporting multiple business streams.

See more by this author


No comments have been submitted on this article. 

Please log in to post a comment.

To learn more about subscription access to premium content, click here.