SAP Job Pricing Part 2: Compare Your Salaries to Market Rates

  • by Jeremy Masters, SAP HCM Consultant, Worklogix
  • January 15, 2007
Master key tasks to gain a competitive edge in the job market using SAP Job Pricing functionality. Match your internal jobs to survey jobs, create a job composite, age data, and compare your internal salary structures to market salary structures.
Key Concept

Using SAP Job Pricing functionality, you can create custom job composites that blend job descriptions from different vendors. Using what are called weight factors, compensation specialists can weight a certain job as more relevant than another. As a result, the composite result is more exact and relevant to your business.

In today’s competitive job market, it’s critical to pay your employees at or above market salaries. If you offer low wages, you risk losing key talent to competitors, while if you pay too much, your bottom line may suffer. An effective way to assess your salary structure is to see what your competitors pay. Job Pricing allows you to see whether you undercompensate or overcompensate by seeing how your salary structure matches up to market figures. SAP Job Pricing functionality, a new module in Enterprise Compensation Management (PA-EC), is available as of SAP Enterprise 4.7 Extension Set 2.0.

Once you’ve set up the foundational components of Job Pricing in your system (which I explained in part 1 of this series), you need to match your internal jobs to survey jobs and then age your data. I’ll explain that process and describe how to create a job composite. Lastly, I’ll discuss how to compare your internal salary structures to market salary structures.

Matching internal jobs to jobs out in the market provides you with the ability to determine how competitive your compensation is and enables you to proactively recruit and retain key talent in your organization. If, for example, your company wants to lure IT professionals, it might sweeten compensation deals for these positions (including their base salary).

Creating a job composite allows you to create job hybrids to assist in your benchmarking analysis. Comparing your internal salaries to market rates gives you an overall view of how you pay your employees (from administrative assistants to executives) and provides you a basis on which to adjust your pay ranges if warranted based on market conditions.

Jeremy Masters

Jeremy Masters is an author, speaker, and SAP ERP HCM subject matter expert with more than 12 years of experience. Jeremy is also the co-founder and managing partner of Worklogix, which provides SAP ERP HCM professional services and software solutions to Fortune 1000 companies. Jeremy has been involved in more than 20 projects, many of them global in scope. In addition to ECM, Jeremy has worked with the talent management functionality, including performance management, succession planning, and e-recruiting as well as the employee and manager portals in SAP ERP. For more information on Enterprise Compensation Management, you can reference his book Enterprise Compensation Management with SAP ERP HCM.

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