What is vesting schedule in SAP PA-CM - Compensation Management?

SAP Term: vesting schedule

• Component: PA-CM

• Component Name: Compensation Management

• Description: The timetable that specifies when awards vest or can be exercised. A typical vesting schedule is 25% per year on the anniversary of the grant date. This means that after one year, up to 25% percent of the awards granted may be exercised; after two years, up to 50%; after three years, up to 75%; after four years, all of the grant. As another example, cliff vesting describes a vesting schedule in which all awards can be exercised on a single, specific date.

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• Key Concepts: 
  A vesting schedule is a feature of SAP's Compensation Management (PA-CM) module that allows employers to set up a timeline for when employees can access their benefits. This timeline is based on the employee's length of service and can be customized to meet the needs of the organization. The vesting schedule is used to ensure that employees are rewarded for their loyalty and hard work over time. 
  
  How to use it: 
  The vesting schedule is set up in the SAP system by the employer. It can be customized to meet the needs of the organization, such as setting different vesting periods for different types of benefits or setting up a vesting schedule that rewards employees for their length of service. The employer can also set up a vesting schedule that allows employees to access their benefits at certain milestones, such as after five years of service or after ten years of service. 
  
  Tips & Tricks: 
  When setting up a vesting schedule, it is important to consider the needs of the organization and the employees. It is also important to ensure that the vesting schedule is fair and equitable for all employees. Additionally, it is important to keep in mind that the vesting schedule should be reviewed periodically to ensure that it is still meeting the needs of the organization and its employees. 
  
  Related Information: 
  For more information on SAP's Compensation Management (PA-CM) module, please visit SAP's website at https://www.sap.com/products/compensation-management.html. Additionally, there are many resources available online that provide more detailed information on how to set up a vesting schedule in SAP.