What is range penetration in SAP (SRD-HR-CMS - HCM-Compensation)?

SAP Term: range penetration

• Component: SRD-HR-CMS

• Component Name: HCM-Compensation

• Description: The relationship between the salary received by an employee and the value of the range covered by the employee's payroll group. This differs from compa ratio which compares the pay with the mid-point of the range. The formula to calculate range penetration, expressed as a percentage, is: actual salary - minimum salary in range / maximum salary in range - minimum salary in range &EXAMPLE& An employee belongs to payroll group MXXX. The employee's actual annual salary is USD 59,000. The salary range for group MXXX is USD 50,000 to USD 70,000. Thus, the employee has a range penetration of 0.45: 59,000-50,000 / 70,000-50,000 = 9,000 / 20,000 = 0.45

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• Key Concepts: 
  Range penetration is a feature of the SAP SRD-HR-CMS HCM-Compensation component that allows users to define a range of compensation values for a given job or position. This range is then used to determine the appropriate compensation for an employee based on their performance and other factors. 
  
  How to use it: 
  Range penetration can be used to set up a range of compensation values for a given job or position. This range can then be used to determine the appropriate compensation for an employee based on their performance and other factors. The range can be adjusted as needed to ensure that employees are compensated fairly and appropriately. 
  
  Tips & Tricks: 
  When setting up a range of compensation values, it is important to consider the current market rate for similar positions in order to ensure that employees are being compensated fairly. Additionally, it is important to review the range periodically to ensure that it is still appropriate for the current market conditions. 
  
  Related Information: 
  For more information about range penetration, please refer to the SAP SRD-HR-CMS HCM-Compensation documentation. Additionally, there are many online resources available that provide additional information about this feature and how it can be used effectively.