SAP SF - Compensation and Variable Pay

Compensation, variable pay, and bonus are a part of Compensation management package in SuccessFactors and are available under same license. Compensation deals with fixed salary paid to the employees.

Bonus and Variable calculations are based on the following three goals −

  • Individual goals
  • Team Goals
  • Group Goals

Bonus in compensation management also depends on performance management. When you are using variable pay, calculations are done with a separate program in SuccessFactors instance. The resulted calculations are shown to People manager who can edit the sheet for final bonus and variable pay.

Standard bonus calculation has a disadvantage that calculations can be performed using one performance form per employee. When you change the organization assignment of an employee in mid-year, there is a need to define separate objectives and they have to be calculated separately.

Variable pay, on the contrary, allows you to perform separate calculations for different time periods in a same year. You can perform separate calculation for employees who move from one project to other or move from one part of business unit to the other. Later, this can sum up to calculate one amount for the payment.

If you are not using Employee Central, you need to upload additional data to perform the calculation. The following file types are required in addition to the user master data.

Import File Name Content & Use
Employee History Import File Multiple rows per employee with validity dates, Assignment to bonus plan, Data relevant for determination of eligibility, Base of calculation (salary), score on each business goal.
Business Goals Import File Business goal definitions, goal forecasts, and goal results for every participating employee.
Eligibility Rules Import File List of rules to which employees are assigned via Employee History File.
Bonus Plans Import File Weighting of different types of goals in bonus plan(group/team/individual)
Business Goal Weights Import File Weighting of business goals per bonus plan

Now, let’s go step by step and see how compensation and variable pay are managed using SuccessFactors.

Step 1 − Go to Compensation.


Step 2 − When you go to compensation, you will find the following options −

Compensation Options
  • Forms − A Form contains data for comp planner and the data exists only for those employees, which are part of comp planner hierarchy.

  • Executive Review − You can use Executive review to check and manage the compensation planning process for a large population of employees. It allows you to group the data from multiple forms into a single view.

    Executive review allows a user to check all the data that a comp planner can see on a form and this includes demographic data, merit increases, adjustments, and any other data field that appears on a comp form.

The key difference between Forms and Executive Review is that in executive review all the employees from multiple forms are listed on one page. The user with Executive Review permission does not necessarily have to be included in the form’s route map in order to see the data.

Executive Review

Step 3 − In Executive summary, you have display and filter options. The Display option allows you to select all the fields in executive summary.

Display Option

The screen will be updated.

Update Screen

Executive review gives users the ability to filter, sort, view, and export data based on division, departments, locations, etc.

Step 4 − Open the Filter Options menu to see the options.

Filter Options

Step 5 − You also have an option to Import/Export in compensation plan. Once you click Export, you have an option to select the File type −

Import or Export

In a large organization, the following staff have access to Executive review −

  • Senior level management/Executive
  • Human Resources
  • Administrators
  • Site Managers/Division managers, which are not part of hierarchy.