What is bottom up budgeting in SAP PA-CM - Compensation Management?

SAP Term: bottom up budgeting

• Component: PA-CM

• Component Name: Compensation Management

• Description: A percentage or an amount is applied to each employee. Individual employees' values are added together to come up with the budget for the organizational unit. The percentage/amount can be a fixed value or calculated from guidelines and eligibility.

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• Key Concepts: 
  Bottom up budgeting is a budgeting process used in SAP's PA-CM Compensation Management component. It is a method of budgeting that starts with individual employees and works its way up to the overall budget. This process allows for more accurate budgeting and better control of costs. 
  
  How to use it: 
  In order to use bottom up budgeting, the first step is to determine the individual employee budgets. This can be done by taking into account factors such as salary, bonuses, and other compensation. Once the individual budgets are determined, they can be aggregated to create an overall budget for the organization. 
  
  Tips & Tricks: 
  When using bottom up budgeting, it is important to ensure that all employees are treated fairly and equitably. It is also important to consider any potential changes in the future that could affect the budget, such as changes in salary or bonuses. 
  
  Related Information: 
  Bottom up budgeting is often used in conjunction with top down budgeting, which starts with an overall budget and works its way down to individual employees. Both methods have their advantages and disadvantages, so it is important to consider which method will work best for your organization.