Creating guidelines and budgets

Guideline rules provide the minimum and maximum recommendation planners can give to employees based on single or multiple criteria. For variable pay, guidelines can be set to be used on either Individual or Team sections by choosing the appropriate guideline type.

Guideline rules are copied during the cloning process, but can be modified in Plan setup→Manage Plan Details→Guidelines. Guideline criteria can be one or a combination of the following:

• Rating: Employee's performance rating is considered during the calculation
• Job Level: Current job level affects the guideline
• Pay Grade: Current pay grade affects the guideline
• Budget Group: Guideline applies to a specific compensation group
• Custom Field: A maximum of 5 Custom fields can be created to be used as guidelines

Additional settings are available such as:

• Yes, the manager cannot go outside the values defined
• No, the manager is allowed to set a value that is not within the range, but a warning will be issued

• If Yes, guideline values will follow how proration was setup in the system.

• This setting will reset the default guideline value when changes are made to Ratings or custom field.

• This action sets up a notification prompt for planners when guideline formula includes High/low data point.

Guidelines - Force Comment

When the Performance Percent field is set to editable, planners are given discretion on payouts for the Individual section on the worksheet.

A force comment feature can be added to trigger a justification comment if payouts are outside the defined guidelines. When configured, a bubble icon displays. If an amount outside the guideline is entered, the bubble turns red.

Forced Comments can be configured in admin interface by navigating to Plan Setup→Design Worksheet→Define Standard Validation Rules.

In the example in the figure below, the max guidelines is set to 90%, but the planner has entered 100%.

At this time, the planner can still save the form but cannot send to the next step of the route map.

To enter a comment, select the comment bubble icon and enters the comment in the pop-up window. Choose Save and Close to finalize.

Once entered, the comment may be edited or deleted.

Guidelines Using Editable or Formula Based Fields

Calculated or editable fields can be used as criteria for defining Guideline tables including the standard fields.

Only editable or formula-based columns of string, percent, or amount type are supported. The following example uses user entered data (Manager selects whether employee has been reviewed or not), a group of employees and a custom formula (Total Paid Previous FY).

When creating the formula you may now choose criteria that is static (Guideline Group) or non-static (Reviewed) data as well as formulas (Total Paid Previous FY).

Budget in Variable Pay is optional and used to track the discretionary component of the payout. When used, you can choose different ways to calculate for the budget base amount.

Budget Modes – Specify how the budget base amount will be calculated. SAP SuccessFactors Variable Pay supports the following modes:

• Direct Amount
• Percent of Custom Field
• Budget by Guideline (Individual & Team)
• Percent of Calculated Forecast (Forecast Business Achievement)
• Percent of Calculated Forecast 2 (Forecast 2 Business Achievement)
• Percent of Calculated Results (Actual Business Achievement)

The budget percentage can be determined using the following approach:

• User – The budget percentage is defined at user level, imported from UDF
• Template – The budget percentage defined at variable pay plan level, specified budget value will be followed for the entire plan
• Group – The budget percentage is defined at group level, specified in group assignments

There are three kinds of budget that can be displayed in SAP SuccessFactors Variable Pay:

• Forecasting
• Forecasting 2
• Results

Forecasting and Forecasting 2 are used only for building budget scenarios, when the final results are in, Results budget type is used.

Budget spent calculation is affected by the bonus equation being used in the Variable Pay program. For additive formulas, budget spent only uses the discretionary portion of the payout. For multiplicative formulas, budget spent includes business calculated amount.

Budget Example 1:

Formula 3 (Additive): Using percentOfCalculated mode

Budget amounts are calculated as follows:

• Budget = Sum of Individual Target amount* Budget Percent
• Budget Spent = Total of Individual Target amount * Individual Percent

Budget Example 2:

Formula 2 (Multiplicative) - Using percentOfCalculated mode

Budget amounts are calculated as follows:

• Results Budget = Sum of Results Calculated Target Amount * Budget Percent
• Result Spent = Total of Results Target amount * Individual Percent

• Forecast Budget = Sum of Forecast Calculated Target Amount * Budget Percent
• Forecast Spent = Total of Forecast Target amount * Individual Percent

• Forecast 2 Budget = Sum of Forecast Calculated Target Amount * Budget Percent
• Forecast 2 Spent = Total of Forecast Target amount * Individual Percent

Budget Display Grouping

The Budget panel typically displays total amounts in functional currency. However, a planner may have multiple employees paid in different currencies; in this case, displaying budgets in different currencies may be required.

The groupBy function addresses this need. This should not be confused with calculating budgets based on groups. groupBy is used to display budgets separately but still using one budget calculation. groupBy can use the following attributes to display budgets:

• Local Currency Code – the only standard field supported
• Custom Field – requires field to be read-only, reportable, and string type

• Guideline rules provide the minimum and maximum recommendation planners can give to employees based on single or multiple criteria. For variable pay, guidelines can be set to be used on Individual or Team sections, based on criteria such as Rating, Job Level, Pay Grade, Budget Group, or up to five Custom Fields. They are copied during the plan cloning process but can be modified under Plan Setup → Manage Plan Details → Guidelines.

• Additional settings include Hard Limit, which restricts managers to guideline values, and Prorating, which aligns guideline values with the system’s proration setup. The Force Default on Rating Change/Custom Field setting resets default guideline values when changes occur.

• The Guidelines - Force Comment feature requires planners to provide justification comments if payouts fall outside defined guidelines. This triggers a notification and prevents advancing the form in the route map until the comment is entered.

• Guidelines can utilize editable or formula-based fields, supporting string, percent, or amount type columns. Criteria for guideline tables can include static data, non-static data, or custom formulas to accurately capture guideline rule needs.

• In SAP SuccessFactors Variable Pay, the budget is optional and tracks the discretionary component of payouts, with various modes to calculate the budget base amount, such as Direct Amount, Percent of Custom Field, and Budget by Guideline. The budget percentage can be defined at the user, template, or group level. There are three budget types—Forecasting, Forecasting 2, and Results—with Forecasting types used for scenario building and Results for final budget calculations.