Explaining the Variable Pay Plan Components

A single Variable Pay template can contain multiple Bonus Plans. Each Bonus Plan can contain multiple Business Goals and their weights. Each Business Goal contains details of a payout. Business results can be added or multiplied by the Individual and/or team goal results. A Bonus Plan calculation can have three components (sections): Business Performance, Individual Performance, and/or Team Performance. The sections can be added (additive formula) or multiplied (multiplicative formula) to determine the final bonus payout for each employee.

SAP SuccessFactors Variable Pay requires five separate data sources. All these data sources are interconnected for bonus calculation to work.

• The User Data File (UDF): Stores the unique identifier of each employee (userId); the userId is used to identify the employees in the Employee History Data (EHD) file.
• Employee History Data (EHD) File: A list of bonus-eligible employees. Each assignment row will have the inclusive dates of the assignment and bonus target amount, which will be used as part of the bonus calculation.
• Eligibility File: Identifies which bonus plan the employees in the EHD belong to.
• Bonus Plan: The incentive program the company is offering. There can be multiple incentive programs in one Variable Pay plan.
• Business Goals: The objectives laid out by the company typically measuring profits and revenues against a given target.
• Goal Weights: A weight assigned to each business goal that indicates how goal payouts will be calculated. Some goals are more important than others.

Data integration between SAP SuccessFactors and your Human Resource Information System (HRIS) or payroll system allows single source updates for your employee data. You will decide how to map SAP SuccessFactors fields with your current database during implementation.

SAP SuccessFactors has a set of standard functions that support the majority of implementations. Complex configuration is possible if required.

Rating Sources

Rating source is used to determine the individual and team performance. Rating sources include:

• Performance Management
• Employee Profile
• Import through UDF
• Import through History data file

Note

You'll be able to work with your consultant to figure out the best option for your organization.

Guidelines are available for the Individual and Team bonus components.

Every guideline formula provides the minimum and maximum amount that recommendation planners can give based on certain criteria.

Guidelines can be configured to have a hard stop. This way, planners will not exceed the maximum allowed recommendation, or it can be configured to allow planners to exceed the maximum. Still, they will be forced to add a comment and justify the additional increase.

There are two types of eligibility for SAP SuccessFactors Variable Pay:

• Manager Form Eligibility: this eligibility rule dictates which employees are displayed on the Variable Pay form. It can be configured to display the names of employees, though they are not included in the bonus plan cycle.
• Bonus Plan Eligibility: this dictates which bonus scheme the bonus-eligible employees belong to.

• A single Variable Pay template can contain multiple Bonus Plans, which can contain multiple Business Goals and their weights.
• SAP SuccessFactors Variable Pay requires five separate data sources: the User Data File (UDF), Employee History Data (EHD), the Eligibility File, the Bonus Plan, Business Goals, and Goal Weights.
• SAP SuccessFactors can display bonus information in local currencies. The exchange rate is set through currency conversion tables.
• Bonus calculation starts with determining the employee’s bonus target amount or basis. This can originate from Employee History Data or the User Data File, or a custom amount can be calculated.
• Guidelines provide the minimum and maximum amount that recommendation planners can give based on certain criteria.