Workshop Presentation - Basic Pay Part 2: Wage Types for

Basic Pay and Salary Calculations

November 8-9, 2011

Department of Finance and Administration
Office of the Mississippi Management and Reporting System

11/16/2011

AGENDA
1.
2.
3.
4.
5.
6.
7.

Workshop Ground Rules

Workshop Guiding Principles
Workshop Objectives
Workshop Agenda in Detail
Workshop Roles
Workshop Content
Workshop Wrap-up

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Workshop Ground Rules

All participants should be familiar with the requirements and the

topics to be covered;

The workshop scribe is responsible for documenting the parking lot

issues and follow up questions;

The workshop facilitators are responsible for keeping the discussion

centered on the topic being discussed. If an issue is determined

that cannot be resolved during the workshop, the facilitator will
note the issue for future resolution and enter it into the workshop
output document; and

Parking of discussion item if the required knowledge is not in the

room.

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Workshop Guiding Principles

Workshop

Demonstrate how requirements are met

using Standard SAP functionality

Utilize standard SAP functionality (80/20

rule)

Avoid the what wont work mindset

Essential to dos:

Review Business Process Model

Update/Create process Flow
Diagrams
WS Output Documents
Identify RICEFW Objects
Document process
changes/implications
Solution Manager:
Create Business Blueprint
documents
Identify Issues and Risks

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Participant

Be attentive and open minded

Explore questions and answers

Encourage input from other participants

Refrain from absolutes and mandates

Focus on current issue being discussed

Avoid war stories

Manage cell phone, pagers &

interruptions

Keep the conversations to one at a time

Workshop Objectives
Develop and agree upon content/input that will drive the development of
Business Blueprint deliverables (Workshop output Template, Workshop
Questions and Flows) that describe the to-be processes for Payroll
Inform and demonstrate standard SAP functionality for use as to-be
processes in Payroll
Define Integration, inputs and outputs from and to other processes
Identify impacts (e.g., benefits, change implications, policy changes,
technology implications, etc.) associated with the to-be models
Utilize standard SAP functionality to design processes that address key
issues, exploit areas of opportunity and embrace strategic intent
imperatives (i.e., commonality)
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Workshop Agenda
Teaml

Payroll Team

Date

November 8 & 9, 2011

Topics

Overview of integration components for Basic Pay Infotype (IT 0008)

Define key fields on Basic Pay Infotype (IT 0008) for Payroll
Define features and attributes that determine the key fields
Demonstrate Basic Pay Infotype Maintenance
Identify Basic Pay wage types to be used for the State of Mississippi
(e.g. Hourly Rate, Salary, etc.)
Define and discuss Basic Pay reduction process for salaried employees who
are transferred, hired, or terminated in mid-period

Deliverables

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Business Process Design Document

Business Scenario Design Document
Master Data Requirements and Design Document
Organization Structure Requirements and Design Document
Key Design Decisions Document
Functional Specifications for any Functional Gaps identified (RICEFW)
6

Blueprint Workshop - Roles

SAP Facilitator

Kuong Tang

Customer Facilitator

Mary Hill

Scribe

Christian Thomas, Leisa Wood

OCM

Iris Griffin

A successful workshop is the result of interaction and participation!

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Pay Scale versus Pay Grade

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Pay Scale versus Pay Grade

Pay Scale Attributes:

Usually associated with Unions

Set Wage Structures
Controlled through Collective Bargaining Agreements tied to Time Frames
Applied to Wage earners
Usually paid as Hourly but can be Salaried in rare circumstances
Based on employees who have contracts with set increases

Pay Grade Attributes:

Used for Salaried employees so that compa-ratio requirements can be flexible

Can use Compensation Administration to manage pay increases more effectively
SAP standard compa-ratio configuration settings allow you to decide whether to:
Use midpoint or reference salary to calculate the compa-ratio
Use base salary or annual salary to calculate compa-ratio
Use midpoint/reference of the grade or level in the compa-ratio calculation
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Pay Scale Structure

Pay scale type

The collective agreement type defines the sector of industry

for which the collective agreement is valid (i.e. Type of
employees, salary vs. hourly).

Pay Scale Area

A pay scale area is a special area in which a collective

agreement is valid (i.e. type of structures can vary by agency
and is commonly shared).

Pay Scale Group

A pay scale group is a criterion used for grading job

evaluation. A pay scale group is divided up into several pay
scale levels (e.g. grading or job codes, level of certification
(per teachers)).

Pay Scale Level

The pay scale level is a criterion for job evaluation within the
pay scale group (e.g. steps, seniority, etc.)
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Pay scale area

Pay scale type

Finance/Budget

EE group/subgroup

Work Schedule
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Personnel Structure Org. Structure

Represents a user-defined
unit which conducts certain
functions within a company

Org Units
Jobs

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Positions

Is a general
classification/description of
task areas

Is an individual employee
assignment in a company
(e.g. head of marketing) 12

IT1005 Planned Compensation Pay Grade

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IT1005 Planned Compensation Pay Scale

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IT0008 Basic Pay (Integrated with OM/CM)

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Default Pay Scale Type and Area (in Personnel

Administration and Payroll only)
T001P Default using PA/PSA
Feature TARIF

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Questions

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Infotype 0008 Basic Pay

4
3

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1. Capacity Utilization Level

Capacity Utilization Level represents the percentage of the salary that the employee
should receive.

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2. Work hours/Pay Period

Work hours/period displays the work hours per pay period for the employee and is
used to determine the hourly rate for a salaried employee or the per pay period average
pay for an hourly employee during payroll run.

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3. Pay Wage
Pay Wage display wage type, currency, and its associated rate/amount to be used in
payroll to determine regular pay or salaried amount.
Table

Feature
LGMST

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3. Pay Wage

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3. Pay Wage

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3. Pay Wage

3
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3. Pay Wage

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4. Annual Salary
Annual salary displays a calculated amount that either multiplies the hourly rate by
the annual hours, or the other pay frequencies (ex. monthly by 12).

3
=18.21213 x 102 x 12

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T510N

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4. Annual Salary

27

Sandbox Demo

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Earnings on Paystub for Salaried EE

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Earnings on Paystub for Hourly EE

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Questions

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Salary reduction for mid-period hire,

transfer, and termination
Three standard reduction/proration processes are available in SAP Payroll. Any
changes outside of standard delivered functionality for prorating salary is
considered a customization.
- Salary reduction/proration based on calendar days
- Salary reduction/proration based on planned working days
- Salary reduction/proration based on planned working hours

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Example 1: Salary reduction/proration based on

calendar days
Nov-2011

Work Hour

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Scenario:
Employee salary: $2000 / month with hourly rate $12.50
Pay Frequency: Monthly
Employee is terminated effective: November 17th, 2011
Calendar Days in November: 30
Calendar Days that EE is active: 16
Reduction salary amount = (16/30) x $2000 = $1066.66

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Example 2: Salary reduction/proration based on

planned work days
Nov-2011

Work Hour

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Scenario:
Employee salary: $2000 / month with hourly rate $12.50
Pay Frequency: Monthly
Employee is terminated effective: November 17th, 2011
Planned Work Days in November: 22
Planned Work Days that EE is active: 12
Reduction salary amount = (12/22) x $2000 = $1090.91

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Example 3a: Salary reduction/proration based on

planned work hours
Nov-2011

Work Hour

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Scenario:
Employee salary: $2000 / month with hourly rate $12.50
Pay Frequency: Monthly
Employee is terminated effective: November 17th, 2011
Planned Work Hours in November: 176
Planned Work Hours that EE is active: 96
Reduction salary amount = (96/176) x $2000 = $1090.91

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Example 3b: Salary reduction/proration based on

planned work hours
Nov-2011
1
Work Hour

10 10

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

10 10 10

10 10 10

10 10 10

10 10 10

Scenario:
Employee salary: $2000 / month with hourly rate $12.50
Pay Frequency: Monthly
Employee is terminated effective: November 17th, 2011
Planned Work Hours in November: 180
Planned Work Hours that EE is active: 100
Reduction salary amount = (100/180) x $2000 = $1111.11

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Wrap-up

Lets verify that we are on the same page

Clarify any Strange Jargon
Validate Parking Lot Items
Record Key Decisions

Plus/Delta
+s
What worked well today?

s
What can we improve for future meetings and project activities?

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Questions

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Thank you!

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MAGIC Project
WORKSHOP MINUTES/ HCM_PY_02 Basic Pay Part 2: Wage
Types for Basic Pay and Salary Calculations
(Session One)
November 8, 2011

PROJECT IDENTIFICATION
Project Name

CPI/Project Number

MAGIC

Project Type
(CBI, Implementation, CSS, Upgrade, Internal, other)

Implementation

Customer Name

Customer Number

State of Mississippi

600260

Planned Start/Finish

SAP Customer Partner

Project Sponsor

Program Manager

SAP Project Director

Customer Project Director

Partner Project Manager

Bill Bevil

Becky Thompson

GENERAL INFORMATION
Workshop Title
Workshop Facilitators
Process Owner
Scribe

HCM_PY_02 - Session One

Mary Hill, Kuong Tang, Carlton Luckey
Christian Thomas, Leisa Wood

ATTENDEES
Name (including Role/Organization)
Darryl Womack
Crystal Dedmon
LaShonda Bingham
Barbara Smith
Ryan Beard
Theresa Abadie
Penneye Thurmond
Latonya Moore
Diane Langham
Donna McFarland

Agency
Military Department
Military Department
HRC
MWDFP
MSPB
Governors Office / MSPB
MDOT
MDOT
DFA / OFM
DFA / OFM / BFR

ATTENDEES
Name (including Role/Organization)
Shauna White
Jennifer Little
Alicia Harris
Pamela Porter
Warren Williams
Susan Wadsworth
Joel Kohler
Bonnie Sides
Alison Brown
Brenda Stewart
MarQuaita Lampkin
Karen Ware
Cynthia M. Butler
Dan Harriger
Rani Oswalt
Carol Allgood
Leslie Swilley
Gail W. Marshall
Alex Dye
Sheila Kearney
Ann Brandon
Joycelyn Johnson
Richard Smith
Susan Perry
LaKenya D. Moore
Susie Smith
Jason Carter
Kelly OHey
LaWanda McGhee
Carlton Luckey
Mary Hill
Leisa Wood
Kuong Tang
Christian Thomas

Agency
DFA / OFM / BFC
DFA / OFM / BFR
MS State Hospital
MS State Hospital
MS State Hospital
DFA / MMRS
Ag & Commerce
MDOT
MDOT
Attorney Generals Office
OSA
MDOC
MDAH
STA
Supreme Court
Supreme Court
ITS
DFA / MMRS
Dye Management for MDOT
STA
Senate
DFA / MMRS
DFA / MMRS
DFA / MMRS
DFA/ Payroll
District Attorneys
Community Colleges Board
SAP
MDOT
DFA / MMRS
DFA / MMRS
SAP
SAP
SAP

SUMMARY OF THE MEETING

REFERENCE DOCUMENTS
FOR DETAILS REFER TO THE FOLLOWING
BUSINESS PROCESS DESIGN DOCUMENT

Covered agenda and gave outline of the workshop rules, guiding principles,
and objectives
Discussed job codes and how they are consistently or inconsistently used
across different agencies
Explained pay scale vs. pay grade as they apply to SAP
Discussed default pay scale type and area
Reviewed infotype 0008 and went into detail about the different elements
(fields) of the form and how they are populated and interact with payroll.
Fields expounded: Cap Utilization Level, Work Hours/Period, Pay Wage,
Annual Salary
Presented sandbox demo of IT0008 (basic pay)
Walked through elements of a generic pay stub
Addressed concerns about hourly rate calculation drivers for salaried
positions

DECISIONS ANSWERED

REFERENCE DOCUMENTS
FOR DETAILS REFER TO THE FOLLOWING
KEY DECISION DOCUMENT

CHANGE IMPACT ITEM

AREA IMPACTED

State of Mississippi occupational codes (occu-codes) are shared between

SPB purview and non-SPB purview agencies. This may be different in SAP
to distinguish between the salary ranges that are followed for SPB
agencies.

ID
AI-1
AI-2

ACTION/PARKING LOT ITEM

SPB is supposed to provide a list of occu-codes with min/max
salaries.
Schedule/facilitate a meeting to further explore how the system will
account for teachers that earn a years salary in 9, 10, or 11 months,
but have it paid out over 12? Between phase one and phase two,

OWNER
Ryan Beard

DUE DATE
11/10/11

Carlton
Luckey

ID

PL-1

ACTION/PARKING LOT ITEM

solution must be determined to pay a teacher over the length of their
employment.
IT0008 user exit may be needed to control what gets
accepted/saved for calculation of annualized salary (ANSAL) gap

OWNER

DUE DATE

Carlton
Luckey

Need to schedule session to discuss BCP concerning this.

Group Questions
Question: Could you tell us how we would use pay scale type in an organization without bargaining units
(unions)?
Answer: We would not utilize the pay scale in the application; we would use a pay grade. It would still need
to be configured and set up though.
Question: There are two different ways to calculate hourly rate: 1) Salary divided by month (hours per year)
2) Based on total working hours for the year. I dont understand the latter calculation, could you clarify that?
Answer: Infotype 0008 has basic definitions of how employees are paid. Determination for hourly rate is
based on annual salary divided by planned working hours.
Question: Can you assign a wage differential to a position?
Answer: No.
Question: Can a control be put in place to lock out HR master data maintenance.
Answer: Yes, that will be handled by security. There shouldnt be a problem and an audit trail is always kept
of changes made.

Group Worksheets/Output
Hourly Rate = Annual Salary / Annual Hours - > defined by employee type; classes (regular office workers,
state troopers, etc.)
Rounding of decimal places should be standardized across all payroll calculation. It still should be truncated
for display purposes.
Different job classifications are needed for contract workers who are strictly hourly.