Employees are compensated year round over and above their normal remuneration as a token for their work, as a motivation, as a compliment for their achievement, etc…
In this chapter, we will see how the ECM takes care of year round off-cycle bonus awards. We will follow a similar approach that we have taken in previous chapter to go through the process.
We will consider the generic off-cycle process for Recognition programs that most companies have. One has to do a cost-benefit analysis of managing this program using ECM. The cost of additional plans must be weighed in against the potential advantages of having a streamlined process of managing these programs.
12.1 Setup the budget
We will setup a separate budget for recognition reward. It will a monetary award.
Figure 12.1 Setup budget for recognition rewards
12.2 Setup the Compensation program
We will create a new compensation plan for recognition rewards that is of ‘Off-cycle bonus’ category. Also note that we will create a similar compensation plan for any other recognition award that we want to capture separately.
Figure 12.2 Setup compensation plan
The pay increase can happen anytime. Hence we will create an anytime recognition reward review.
Figure 12.3 Setup compensation review
We will create a compensation review item ‘Recognition rewards’ using the compensation plan ‘Recognition reward’ and the anytime compensation review ‘RERE’.
Figure 12.4 Setup recognition reward review item
The compensation review item attributes for Pay increase are defined in the screen Figure 12.5
Figure 12.5 Setup recognition reward review item in details
12.3 Setup the eligibility
Anyone in theUSis eligible for recognition reward. In this case the macro eligibility is sufficient. That means that anyone with the compensation program record with compensation area 10 and first grouping of ALL and second grouping of ALL are all eligible. There is no need to define micro eligibility using eligibility rules.
12.4 Setup the guidelines
We don’t need any elaborate guidelines since the recognition reward is for $100. We don’t need to create any guideline matrix. We will enter default, minimum and maximum as $100. We will create similar guidelines for all the guideline groupings.
Figure 12.6 Setup compensation guidelines
12.5 Setup the award Off cycle Bonus (IT 267)
We will define the compensation plan attributes along with the guideline variant. The absence of eligibility variant will make the macro eligibility as the only eligibility criteria
Figure 12.7 Setup compensation plan
We will also setup the compensation plan payroll data with the off-cycle reason of ‘Special Payment’.
Figure 12.8 Setup compensation payroll data
It’s very important to include it in the compensation program as shown in Figure 12.9
Figure 12.9 Setup compensation program
Create the budget and setup the budget amounts
Figure 12.10 Setup budget amount
Assign the budget to the highest unit. If anyone is given recognition reward and who is under the ExecutiveBoard-USAhierarchy will reduce the budget even though the budget is assigned to the highest level.
Figure 12.11 Setup budget release
When you apply the guidelines, $100 will be awarded. For this particular plan, there are just too many columns and don’t really help. The user can easily reduce the number of columns by clicking on the ‘Personalize’ button and removing redundant columns.
Figure 12.12 Personalization options
Awarding the employees
The manager comes in to do the pay increase and can pick a view to see only the directly subordinate employees.
Figure 12.13 Select the employee
The manager can apply the guidelines and award $100.
Figure 12.14 Grant the award
The award is reviewed and send for approval.
Figure 12.15 Submit the award
The initiator of the award and provide notes that helps the approver.
Figure 12.16 Add a note
Once the award has gone through the approval cycle and it’s in the approved state, the compensation specialist proceeds to execute the compensation process status change transaction. In this case it might also be done on a regular monthly basis. All the awards in the approved status will be changed to Active status.
Figure 12.17 Activate the award
The compensation process record IT 0759 is shown below Figure 12.18
Figure 12.18 Award in infotype 0759
On activation, the additional off-cycle payment infotype 0267 is created with the amount, effective date and reason for the payment.
Figure 12.19 Off-cycle infotype 0267
As awards are distributed, you can review the amount spent when you execute the transaction.
Figure 12.20 Check the budget
For the New Year, you can copy the existing budget and create a new budget. The new budget has all the features of the old budget including the budget amount.
Figure 12.21 Create a new budget structure for the next year
In this chapter, we have covered the creating of recognition rewards program. We have also created a budget for the new year based on the previous year’s budget. We have also created a fixed guideline for the budget that can’t be changed.