What is a background Job in SAP?

Background jobs are non-interactive processes that run behind the normal interactive operations. They run in parallel and do not disturb interactive(foreground)  processes and operations.

It is scheduled from SM36. You can analyze it from SM37 by viewing its job log.
Advantages of Background Jobs 

• It reduces manual effort &  automates the task.
•  It can be scheduled as per user’s choice.
•  It reduces user interaction and can run seamlessly in the background without user input
•  Once you define the variant for background job, the user doesn’t have to worry about value input in the field. Thus, user confusion is also reduced.
•  Ideal for time- consuming/ resource intensive  programs which can be scheduled to run in the night(when system load is low).

Background jobs are classified in three categories -

1. Class A (High/critical Priority) :-  Some tasks are urgent or critical and  must be scheduled with class A priority job. Class A priority reserves one or more background work processes. Users have to decide how many background work processes should be assigned to Class A priority job. Suppose a user chooses 2 background work processes for this category then available background work processes for class B and C = (Total number of work processes set in operation modes RZ03)- (Background work processes allowed to class A category).
2. Class B(Medium Priority):- Once Class A jobs are completed , Class B job will start executing in the background before class C jobs.
3. Class C(Low Priority):-It runs after both  class A and class B jobs are completed.