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If you’re embarking on an SAP SuccessFactors Compensation and Variable Pay implementation, or simply want to ensure that your current processes meet standard practice, we’ve compiled the most common questions that our team fields for this solution.

What components of the compensation process can the solution handle?

SAP SuccessFactors Compensation allows organizations to do planning on merit increases, promotions, adjustments, lump sums, bonus and stock planning in multiple currencies. Managers can use a salary increase matrix or a guideline policy for all compensation components (quartile, lower-middle-upper tiered, linear-guideline structure) during planning.

Who is eligible to participate in compensation programs?

The solution supports compensation planning for all types of pay rates – Salaried, Hourly, Bi-weekly, Annually etc. It will also allow you to set up complex eligibility rules to determine employees eligible for compensation planning.

Can we setup multiple roles within the compensation process?

Yes. Compensation planning is usually performed by managers and then processed by HR managers, Executives, Compensation Administration, etc., multiple roles can be set up to handle your specific process.

How do we initiate a salary increase or bonus to an individual?

Typically, salary increases for individual contributors are contingent on completion of performance reviews and bonus increases are mostly driven by organization performances. If organizations do not have an integrated performance management solution, SuccessFactors also allows you to import external performance ratings or initiate the planning process without the performance reviews.

We provide allowances to our employees - is this something SuccessFactors can accommodate?

Yes, some organizations include car, housing, shift allowances, etc. during compensation planning. The solution can also help you with this aspect of compensation planning.

Can we prorate merit increases, adjustments, and/or promotions?

Prorating can be applied to merit, promotions, adjustments, bonus and guidelines. Prorating can either be based on hire date or percentage.

Can we use benchmarks for compensation planning?

Yes. Both Compa-Ratio which compares employee salary to mid-point and Range Penetration which compares employee salary to minimum and maximum can be used for compensation planning. SuccessFactors also allows you to leverage Mercer market data during compensation planning.

How many steps does a typical compensation form route map have?

Most clients may want to follow a complicated and/or complex approval process. Examples include:

  • Too many levels of approvals, leading to higher level managers getting numerous e-mails
  • Iterative steps, thus prolonging the process
  • Requiring signatures for certain exceptions to their process

We recommend clients to keep their workflow simple. This is especially true for their first year following an automated process. The average number of steps is five, but it can be more depending on the number of approvers/reviewers.

Does SuccessFactors allow us to calculate the cost of compensation or budgets?

Yes. It allows you to configure multiple budget rules. For example, budgets can be split based on demographic information or based on employee base salary, etc. You can also warn managers when they exceed budget during planning or stop them from exceeding the budget limit. Budgets can also be prorated.

How are compensation decisions communicated to employees?

Statement template can be set up which can be used for communicating increases. Statements can either be sent to managers or directly to employees.

Have additional questions? Let's chat! Schedule a call with one of our certified consultants to discuss your unique requirements.

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