Creating a Compensation Plan

The worksheet represents all the elements which are configured in the plan.

• Planning Sheet tabs: Salary, Stock, Summary

• Configured Budget calculation

• Approval or Route Map steps

• Form instructions

• Currency Views enabled

Every configuration should be checked thoroughly against the worksheet to see if the behavior is as expected.

Note

Pre-configured XML plans are available in all Sales demo instances that can be copied and used as a baseline; however, we recommend using the SuccessStore Leading Practice Template as a starting point.

There are some elements in the worksheet that can be displayed according to the user’s preference.

• Local number format – Planners can change their number format by going to the Options → Compensation Number Format menu.

  
• Show/ Hide columns – Planners can choose to show or hide columns or a group of columns while planning. They can also apply filters. This is a sticky feature which will be applied every time the same worksheet is opened.

The Salary sheet is used to allocate salary increases for the planner’s group. The sheets are configurable but typical fields you see on a Salary sheet include:

• Employee information

• Current and final salary information

• Merit guidelines

• Lump sum

Additional employee information can be viewed from the worksheet, if enabled:

• Compensation Profile

• Continuous Performance Management (see note below)

• Promote link (if Employee Central is integrated)

• Compensation Statement (from completed forms)

• Custom Views

Note

SAP SuccessFactors Continuous Performance Management is a solution that enables employees to get quick feedback on their work through frequent and structured conversations with their manager. Managers are able to track their team members' progress effortlessly and the solution offers a simple way to provide coaching advice.

The Stock sheet is used to allocate stock or equity for the planner’s group. The stock planning sheet does not support vesting and is used for planning and recommendation only. SAP SuccessFactors Compensation does not have a standard feature to keep track of stock vesting schedules. Typical fields you see on a Stock sheet include:

• Stock/Options guidelines

• Recommendations

• Hierarchy

  • Determines form creation

  • Determines the employees included in the form

• Compensation planner

  • Is the person designated to enter compensation recommendations

  • Can be the direct manager, second level manager, or anyone assigned to do so. The compensation planner depends on how the customer’s hierarchy is set up.

SAP SuccessFactors Compensation supports different hierarchy methods and each one has its own advantages and disadvantages. The method is set up at the plan level. In the compensation home interface, choose a plan, navigate to Plan Setup → Define Planners. The three options are:

• Standard Suite Hierarchy

• Rollup Hierarchy

• Compensation Hierarchy (Second Manager)

• Designates every employee that has at least one direct report as a compensation planner.

• The line manager (direct manager) becomes the planner of the team.

• Hierarchy follows the organizational structure defined by the Manager column in the user data file. If an employee has at least one direct report, the system will create a compensation form for that employee.

• Advantages:

  • Simplest method of planning

  • No additional configuration

  • Dynamic

• Disadvantages:

  • Creates too many forms

  • Since the planner is also the people manager, this hierarchy is susceptible to organizational changes

  • Planning is impacted in case of reorganizations

• Also referred to as Designated Hierarchy or Second Manager Hierarchy

• The compensation planner can be customized using the SECOND_MANAGER column in the user data file. The system creates a separate hierarchy from the organizational structure for compensation planning purposes. This does not affect the hierarchy structure of other solutions.

  • The second manager column in the user data file is designed for compensation where compensation planning hierarchy is different from reporting relationships.
    • In the example below, the planner in green is responsible for a group that they do not directly manage.

Advantages

Compensation planners are different from people managers, hence they are not generally impacted by organizational changes

Disadvantages

• Requires administrative work to maintain and it is easier to break than the other two methods.
• To identify head of the hierarchy, the second manager column must be blank.
• When creating a route map, be mindful of custom roles (EA, EAA) when assigning steps to planners. Additional configuration is required such as route map roles (EA, EAA, and so on).

• Compensation form created for each associate with direct report ONLY if designated as compensation planner

• Who has direct reports is based on the Manager (or Second Manager) column of the user data file

• Designation can be set in the user data file or on the Define Planners page

• Not every manager or supervisor needs to be a planner

  • In the example below, the manager marked with the X is not a planner.

  • The employee responsibility rolls up to the planner at the next level up.

Advantages

• Can be used in combination with Standard or Compensation Manager Hierarchy

• Can reduce complexity/number of forms in use

Disadvantages

• Remove inactive users, add, move, and user to manager form functions will not work since it is not using any manager from logic

• Rollup reports will not function properly

• Requires defined communication

Note

See the Implementing and Managing Compensation guide for more information.

Rollup hierarchy can be configured in the user data file or on the Define Planners page of the admin interface. To define in the user data file, observe the following steps:

• In the user data file, add a column, COMPENSATION_PLANNER_XXX, where XXX is the Form Template ID (can be verified in Provisioning → Form Template Administration).

• Only those flagged as TRUE in the COMPENSATION_PLANNER_XXX column will have forms created for them.

• The system can intelligently determine all the people who should be on the planners form by using the information you have defined in your MANAGER or SECOND_MANAGER columns.

The type of hierarchy and rollup is also indicated in the XML plan.

When the Rollup option is selected in the admin interface (Define Planners), the system uses the Standard Hierarchy as the point of reference.

Put a check beside the standard manager name to indicate if that manager will be a compensation planner. This is the same as flagging the employee TRUE in the COMPENSATION_PLANNER_XXX column.

Note

To use Rollup with Second Manager, planners have to be designated in the user data file. Users should be flagged using the COMPENSATION_PLANNER_XXX column.

As a compensation planner you can review field change history on your compensation, variable pay, and total compensation worksheets.

Once enabled your planners are able to download a file with details of field values that have been modified by other planners. The Planner Audit feature can be enabled for up to 10 fields for a template. Some standard fields and all custom fields can be selected to be auditable. See a link to the list of standard fields that aren’t supported for auditing in the Related Information. Also, you can’t enable the feature or add additional fields for Planner Audit if worksheets have been created for a template.

Compensation planners can be given permission to grant/revoke planning privileges if the plan uses Rollup Hierarchy.

Note

See the Implementing and Managing Compensation guide for more information.

Compensation planning normally requires an approval process and a route map is the tool which configures the approval process for SAP SuccessFactors Compensation and other form-based solutions. It determines the workflow a worksheet follows through the system. A route map is defined at the plan level.

When you route a compensation worksheet, you’re electronically passing the worksheet around. The worksheet continues to transfer from employee to employee, until all work on the worksheet is complete.

Note

Modification to the route map only impacts compensation forms created from that point forward, not previously created forms.

Route maps for compensation use the "E" role specifically for users identified as compensation planners, unlike in Performance Management where "E" refers to individual contributor. The roles in a route map may differ depending on the hierarchy method used. In the image, Route Maps – Roles, we are using Standard Suite Hierarchy.

• The Staging Step is assigned to "U step" or User step. This is typically used as a final comp admin check before forms are routed to managers.

• Recommendation Step is assigned to Employee (E) and Manager (EM) roles in an iterative type. E role refers to first level managers while EM refers to second level managers in a Standard Suite Hierarchy.

• HR review is assigned to HR Rep (EH) role.

• Holding Step is assigned to "U Step". This step in the route map is used to hold all compensation forms in the comp admin’s inbox, while Executive Review is ongoing.

An alternative to using an iterative step type is using the Enable form routing to previous step setting in Plan Setup → Advanced Settings.

Worksheets can be configured to allow them to be sent back on the route map so that the owner can make changes.

To mass route the form backward, the administrator also must enable the permission in RBP Administrator Permissions → Manage Documents.

Compensation worksheets can be mass routed forward a step while skipping validation. This allows the administrator to mass route all forms to the next step and ignore validations.

• Workflow refers to two main components:

  1. Who conducts initial planning recommendations.

  2. What types of review occur following the initial recommendation.

• General principles:

  • Only include those that would alter a decision, not simply review.

  • Use reporting and Executive Review for reviewing trends and aggregate budgets.

  • Don’t over-complicate by including too many levels of approval. For example, the CEO does not need to personally review every individual recommendation.

• Signature Stage is not used in SAP SuccessFactors Compensation.

• Collaborative steps are supported but not recommended.

• The Staging Step is used for Comp admin accounts to verify forms.

• The Holding Step is used for Comp admins to do final review and approvals. Executive Review during this time is open for all to read, none to write.

• The use of "Get Feedback" edit and comments is not recommended.

• When using Second Manager Hierarchy, take note of the following role code convention:

  • E = Comp planner, as uploaded in the Second Manager column in the user data file.

  • EA = Second level manager of Comp planner, as designed in secondary hierarchy.

  • EAA = Third level manager of Comp planner, as designed in secondary hierarchy.

Note

You can use a custom role to enter the role value as EA or EAA. This will ensure the form will be routed following the Secondary hierarchy setup in the user data file.

• When the trigger occurs, the bubble icon displays. Hovering the mouse over the icon will give a message to the planner.
• At this time, the planner can still save the form if the bubble is red or in violation.
• If the planner tries to send the form, the system will perform a hard stop and a message will display below the route map.
• To enter a comment, the planner simply clicks the comment icon.

Comments can be edited and deleted. When combined with the "return to previous route map step", this allows comments to be updated or removed to reflect changes to recommendations.

There are no rules on the content or minimum size of the comments.

Force Comments can be configured in XML or on the admin user interface. Placement within the XML is after /comp-salary-rule but before comp-rating-source.

• useFor can be salary or stock
• mode can be no-raise, raise, or guideline
• fieldId can be any of the standard entry fields in the Salary or Stock tab.

Force Comments warning messages can be customized at the field level, such as:

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

• Display Budget: Determines if the budget panel will be displayed. If not selected, the budget panel will not display, even if there is budget calculation configured in the plan.

• Display Total: Setting which determines if the column total will be displayed or not. If not selected, even custom fields configured to show the column total will not be displayed.

• Rating Label Format: Determines how performance ratings will be displayed – text, numeric, or number-text. Leading practice recommends using text to have more meaningful impact at steering rewards than simply numeric.

• Pay Guide Format: Determines Pay Guide pattern. You can only use the following keywords: min, def, and max. (Def refers to midpoint.)

• Salary Guideline Pattern: Determines guideline display pattern on the Salary tab. You can use the following keywords: min, low, def, high, max.

• Stock Guideline Pattern: Determines guideline display pattern on the Stock tab. You can use the following keywords: min, low, def, high, max.

• Default Sorting: Administrator sets the default sorting options for employee names on worksheets. The choices are First Name, Last Name, and by Ascending or Descending order.

• Benchmarks (compa-ratio and range penetration) may be color coded based on the percentages of where an employee’s current pay sits.

Extensive testing of the configuration is needed to validate and ensure that:

• Data accurately pulls from Employee Central to Compensation.
• Salary ranges pull correctly from Employee Central.
• Eligibility rules include the correct employees.
• Compensation final results are published correctly in Employee Central.

Similar to plans that are not integrated in Employee Central, you can start by uploading a baseline compensation template or use the preconfigured plans from SuccessStore. When uploading your own baseline templates, take note of the following:

• Ensure that the XML template does not have any references to "importKey".
• Since the Employee Central-enabled template does not accept data from the user data file, "importKey" must be removed from the fields if it is used.
• Stock factor tables are not supported.
• Add the appropriate comp-ect-output element for publishing.

To use Employee Central integrated plans from SuccessStore, take note of the following as these may need to be created/ enabled in Employee Central beforehand:

• Event reason ANSALREV is referenced as the event reason for publishing. This event reason will have to be created prior to downloading the preconfigured plan from SuccessStore. The event reason can be changed later.
• Component Code LUMPSUM is referenced as the non-recurring pay component for publishing.
• Job function is referenced for mapping promotion related fields (that is, job codes).

Many of the records in Employee Central are effective-dated, meaning each time a transaction is entered, the system prompts to provide an effective start date, which creates the historical, present, and future records in Employee Central.

The worksheet effective date will control which records are pulled to the Compensation worksheet. In the figure, Worksheet Effective Date, any transaction with an effective date AFTER December 31, 2099 is NOT pulled to compensation planning.

Example: A transaction to update M. Hoff's pay grade was entered via Manager Self Service (MSS) on December 1, 2099 with an effective date of January 15, 2100. For planning purposes, M. Hoff's pay grade as of December 31, 2099 will be used in the compensation worksheet because the transaction effective date is AFTER the worksheet effective date.

The current employee records for Employee Central are end-dated far in the future, so choosing a worksheet effective-date that is in the future will ensure the most current record is pulled. With a future effective date, the customer should run the "Update Compensation Worksheets" job regularly to ensure the latest data is displayed on the compensation forms.

There is a single effective date per template. The effective date can be set in the Admin Center by navigating to Plan Setup → Settings → Employee Central Settings or directly in the XML plan template. Entering an effective date initiates the integration between Compensation and Employee Central. This date cannot be changed when forms are already launched.

Different worksheet effective dates based on common customer requirements are as follows:

• Customer wants to pull Employee Central data (salary, department, and so on) as of a cutoff date

  Worksheet effective date: End of plan period, end of fiscal year, and so on

• Customer wants to pull data as of form launch date

  Worksheet effective date: Form launch date

• Customer wants to pull the most current data from Employee Central including any future changes already scheduled to take place

  Worksheet effective date: 12/31/2099

A special scenario exists for some companies when a portion of employee population is stored in Employee Central and the other half in another HRIS solution, such as in cases of mergers or consolidations. SAP SuccessFactors Compensation supports dual data source of employee information, by using hybrid templates.

• A hybrid template is where some users are stored in Employee Central, and others outside, though both are planned within the CMP.
• Hybrid templates use both import keys (user data file mapping) as well as Employee Central data mapping.

Hybrid does NOT mean you can have mixed data sources for a single employee. It is NOT possible to select some field-level data from Employee Central and the remaining field-level data from the user import for the same user.

Employees MUST still exist in SAP SuccessFactors (that is, they must have user id records and People Profile records).

Caution

A hybrid scenario can increase complexity and is not preferred.A recommended alternative is to have a template for each separate population: an Employee Central-integrated plan for employees stored in Employee Central and another plan for employees stored in an external HRIS.

Publish settings reflect how recurring and non-recurring pay components are mapped and configured in XML. The effective dates and event reason are editable so company administrators can easily update payout dates within the UI.

User Publish Filter: Controls which reportable custom field can be used as a filter when publishing selected employees. Only one custom field can be used per plan.

Effective Date: Specifies the default start-date for recurring pay components and the pay date for non-recurring pay components. Dates specified at the employee-level will take precedence over the default.

Event Reason: Specifies the reason for the payout. This is OPTIONAL for non-recurring pay components. If an event reason is configured at the employee-level in the Compensation template, (for example, by use of a lookup table), the event reason specified here is used only as a default value in case an employee-level value does not exist.

Mapping the publishing information in the XML will be discussed in the succeeding steps.

Relevant employee information must be pulled to Compensation for effective planning decisions, with an Employee Central-integrated compensation template, these data must exist in Employee Central. To pass information from Employee Central to the compensation form, the fields must be mapped.

Compensation can retrieve data from the following Employee Central entities:

• Job Information
• Compensation Information
• Pay Component Recurring
• Pay Component NonRecurring
• Personal Information
• Employment Information
• Job Relationships
• Pay Component Group

Compensation can also retrieve data from custom MDF objects and Employee Profile (standard elements in Succession Data Model, for example, riskOfLoss, talentPool, and so on).

Guidelines for using Employee Central-field mapping in Design Worksheet:

• The Employee Central Category specifies the type of Employee Central component that data will be retrieved from.
• When planning in the User's Pay Rate type, the fields Current Salary, Units Per Year, Pay Rate and Local Currency Code can be left blank.
• The Employee Central Component name is only valid for component types: Pay Component Recurring, Pay Component Non-Recurring, Pay Component Group and Job Relationships. It will be ignored for all other component types.
• When mapping to the Pay Component Group, the fields Current Salary, Units Per Year, Pay Rate Type and Local Currency Code MUST be mapped to the same Pay Component group.
• Fields should be mapped to the correct element type. A "string" field should not be mapped to a "number" field or vice-versa. While the system will attempt to make that conversion, it can fail. Strings with commas or dollar signs will not properly convert, as an example.
• Custom fields can display translated values in the form. To achieve this, you need to configure the custom fields as translatable in the Design Worksheet page and then map to an Employee Central translatable field. Only read-only custom fields with the column type String are currently supported to be translated.
• In cases where customers use generic objects (for example, stock portlet, rating history, leave stats, and so on) to hold additional employee information, field mapping has been extended to pull data directly from generic objects. Previously, customers had to replicate data from generic objects to Job Information or Compensation Info to use it for compensation planning. For generic objects to be used for the compensation process, externalCode must be of the type User. Generic objects are available for mapping under the Employment Details Employee Central category.

The same mapping functionality is available for rating source and budgets. In the absence of Performance Management (PM) form, ratings can be pulled from Employee Central. BasedOn="user" budget settings will require fields to be mapped from Employee Central.

The pay matrix defines the minimum, midpoint, and maximum pay levels for each pay grade and is required for compa-ratio and position in range calculations.

If Employee Central integration is enabled, you can choose to use either the Employee Central salary pay matrix or the salary pay matrix table defined within the Compensation solution itself. Though not required, it is always best to use the Employee Central salary pay matrix table if Employee Central integration is enabled.

To use the Employee Central pay range in Compensation:

1. Identify the pay range associations from the Corporate Data Model.

   Normally, pay range in Employee Central is associated to Geozone, Legal Entity, and Pay Grade. For integration purposes, Pay Grade needs to be the first association in the corporate data model, as payGrade is always the first factor in compensation pay range mapping. Any other associations configured in the corporate data model must be added to the compensation plan and mapped to Employee Central.

2. Make sure each of these required fields are also added to the compensation plan and mapped correctly to Employee Central:

   • Pay Grade

   • Currency Code

   • Salary Type (Annual, Monthly, Hourly)

   • Client-specific attributes (for example, Geozone, Legal Entity, and so on)

3. Select Use Employee Central salary pay matrix.

   The effective date should be the date that the pay range information is effective in Employee Central. Typically, this is the start date of the beginning of the compensation cycle.

   The attributes are the associations found in the pay range foundation object in Employee Central. Pay Grade and Currency do not need to be added as attributes as they are by default used as a matching criteria.

   

   To know the pay ranges that are currently in the system, you can generate an Ad Hoc Report. As pay ranges are foundation objects, select Foundation Objects as the report definition type and select the columns for Pay Range.