Lessons Learned in Implementing SAP Enterprise Compensation Management

  • by Janet McClurg, SAP HCM Platinum Consultant, SAP
  • April 15, 2006
Become familiar with SAP Enterprise Compensation Management (PA-EC). Take away tips about how to optimize annual merit plans, variable pay plans, budget reconciliation, approval processing, promotions, and lump sums. Consider how EC affects your other modules.
Key Concept
SAP Enterprise Compensation Management (PA-EC) is not an add-on to the Compensation Management (PA-CM) module in SAP HCM. EC is a new module with new tables, infotypes, and configuration steps. The EC and CM modules share no tables except T710 (pay grade). Although you may use CM and EC in the same system, SAP recommends that you do so only temporarily to transition between CM and EC.

The SAP Enterprise Compensation Management (PA-EC) module allows companies to design a comprehensive, performance-based compensation program that supports their specific requirements. The module provides components for annual and variable pay administration, long-term incentives, budgeting, and job pricing.

Although the EC functions may support an enterprise-wide total compensation strategy, most companies tend to implement specific functions of EC at certain times and over several phases. I’ve found that most companies administer a scheduled (annual) merit increase review process and one or more variable pay plans (bonus plans) for employees.

I will focus on several key lessons learned that pertain to implementing annual merit plans, variable pay plans, budget reconciliation, and approval processing in the EC module. I’ll describe how to integrate promotions and lump sums into these processes. This information will allow you to evaluate how to best use the EC module in your business environment, what types of master and organizational data and process adjustments you must consider as you implement EC, and also how EC might facilitate some business process improvements within your company. I’ll also explain how to design a custom plan/budget review report and customize EC using Business Add-Ins (BAdIs). Refer to the sidebar, “Using BAdIs with EC,” for more details about BAdIs.

Janet McClurg

Janet McClurg is an SAP Platinum consultant specializing in the Human Capital Management application. She has worked for SAP for 12 years, the last eight in the platinum consultant role. Janet’s areas of specialization include Enterprise Compensation Management, Performance Management, Organizational Management, Personnel Administration and Succession/Career Planning.

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.