Describing Advanced Topics

When using ALCF, it is important to know the levels on which you can create custom fields.

• Lower levels can reference data at higher levels.

• Higher levels can aggregate data from lower levels.

To demonstrate, let us use a specific use case:

ABC company is using the job levels and PM rating as their guideline criteria, however, they consider job levels of employees for each assignment, and not just the end of year job level. ABC is using Overall Rating sourced from one Performance Management (PM) template.

Here is a list of ABC’s guidelines:

• If the employee is at Director level:

  • PM rating of 5 = 200% payout

  • PM rating of 4 = 150% payout

  • PM rating of 3 = 100% payout

• If the employee is at Manager level:

  • PM rating of 5 = 150% payout

  • PM rating of 4 = 125% payout

  • PM rating of 3 = 100% payout

• If the employee is at Contributor level:

  • PM rating of 5 = 125% payout

  • PM rating of 4 = 110% payout

  • PM rating of 3 = 100% payout

To enable ALCF, the process must start from the lowest level and then aggregate the calculated values to higher levels.

1. Business goal level

   1. Pull Rating into business goal level.

   2. Pull Job Level from the history file.

   3. Pull the PM modifier from the lookup table.

   4. Calculate the modified payout amount.

2. Business section

   Aggregate all calculated goal values into an aggregate field.

3. Assignment level

   Aggregate all calculated goal values into an aggregate field.

4. Entry

   Aggregate all calculated goal values into an aggregate field.

To pull data from entry level, reference the column ID of the field into the new custom field.

When using Import Key, specify the source of the field.

• Employee history record – use the data-field ID as Import Key.

• User data file – use the user data file column header.

ABC’s guidelines were translated into a lookup table with Job Level and Rating as input and Payout Modifier as output. Make sure to reference the correct column ID in the formula.

Calculate the required information using the previously created custom fields.

Aggregate calculated goal values into the Business Section.

Aggregate calculated values from the Business Section to assignment level.

Aggregate all calculated values from Assignment into Entry-Level.

• Used with both SAP SuccessFactors Compensation and Variable Pay.

• Allows different admin groups, teams, markets, countries, or regions to manage their compensation processes using a single template for the organization.

• With decentralized admin, a U.S. headquartered company can create ONE compensation template for the entire organization (all countries) and each country’s admin has access to only their country’s data and processes.

• The ability to manage compensation in one template significantly reduces administrative overhead and provides the ability to view all organization-wide data in one location providing a holistic view.

• There are many security features that have been added to ensure that admins can access data only for their markets/regions/teams/groups.

In Provisioning, select the following in Company Settings. Role-based permissions and Comp 2.0 are also required for the Decentralized Administration process.

Decentralized admin uses administrator groups which are associated to several functions in Variable Pay. One of these functions is the process of importing/exporting business goals. In order to associate admin groups to business goals, the Variable Pay Goal Plan Template must be edited to contain an Admin Group field.

1. Navigate to Provisioning → Managing Plan Template.

2. Choose Import/Update/Export Variable Pay Goal Plan Template.

3. Export the applicable Variable Pay Business Goals XML Template.

   

4. Add the following field-definition code after the lookupValue field.

   Code Snippet

   Copy codeSwitch to dark mode

   123
   <field-definition id="Administrator_Group" type="textarea" required="false" detail="false" viewdefault="on" showlabel="false" field-show-coaching-advisor="false" cascade-update="push-down"> 
   <field-label>Associated Group Name</field-label>
   </field-definition>

   

5. Save the file as a new name and import back to Provisioning. No other changes are needed.

With decentralized admin, two types of administrators are necessary:

• Super Admins – admins who supervise the compensation process across the organization.

  • Access to all data across all markets/regions/teams

  • Example: A super admin can access both Canada and U.S. admin data

• Local Admins – admins who manage data only for their market/region/team

  Example: A Canadian admin manages compensation only for Canada employees and has access to only Canada guidelines, bonus plans, business goals, and so on.

Super admin roles are defined in RBP:

• Any RBP role with the Decentralized Super Admin Permission selected is considered a Super Admin in terms of the Decentralized Admin process.

• Manage Administrative Dynamic Groups turns on the ability to define groups of users to complete administrative tasks.

Local Admins are defined within administrative groups.

Example: Wilma Sown (wsown) is a compensation admin for Canada, so she should be part of the Canada Admin Group.

This type of group is different than an RBP group, but associated users should also have applicable Compensation and Variable Pay admin permissions in RBP (just not the two Super Admin permissions mentioned previously).

Admin groups are a type of dynamic group.

• Created and managed by any admin with the RBP Manage Administrative Dynamic Groups enabled.

• Navigate to Compensation Home → Action for all plans → Group Assignments → Manage Administrator Groups.

1. Select Create New Group (group assignment works similarly to RBP Permission Groups).

   

2. Select a category from People Pool and the associated parameters.

3. Select Update to view the members of the group. Exclude any members from the group as needed.

   

4. Select Done.

It is possible for people to be members of multiple admin groups.

Decentralized admin applies to the following objects:

• Variable Pay and Compensation Guidelines

• Variable Pay Bonus Plans

• Variable Pay Business Goals

• Variable Pay Business Goals Weights

• Variable Pay Exports/Validation Reports

  • Gates and Accelerators import and export (admin should have permission to both bonus plan and business goals)

  • Export of Bonus Plans

  • Export of Business Goals

  • Export of Business Goal Weight

  • All Validation Reports

Access to compensation and variable pay objects is determined by membership of an admin group.

• Decentralized Admin adds a new column to guidelines on the right: Administrator Group.

• Super Admins have CRUD (Create, Read, Update, Delete) access to all guidelines within a Variable Pay program.

In this example, the Super Admin can see and edit all varpay guidelines.

• Formulas in yellow can be viewed and edited only by admins in the US Admin Group.
• Formulas in pink can be viewed and edited only by admins in the Canada Admin Group.
• As shown in blue, the Super Admin can assign or re-assign visibility/edit capabilities to a particular Admin Group. Local Admins cannot do this.
• The unrated formula is unassigned. Super Admins are the only users who can view/edit this formula.

Super Admins can lock guideline rules. Once locked, a guideline rule cannot be changed. If a change is required, the Super Admin has to unlock the rule.

• The Super Admin should ensure that no formulas are unassigned, there are no duplicate guidelines, and the ordering of the formulas is correct.

• The associated admin group only determines which admins can view/edit/delete the guidelines. The application of the guideline formula on the employee population for Compensation and Variable Pay calculations has not been changed.

Local Admins have access to create, view, and edit only those guidelines that belong to their admin group.

In the example in the following figure, Guidelines: Local Admin – Example, the Local Canada Admin can:

• See and edit only Canada Admin Group guidelines

• Add a new formula by choosing Add New Formula

Choose Export or Import to extract/import only Canada Admin Group guidelines only in a CSV file.

Similar to guidelines, bonus plans are associated to admin groups. Super Admins can access all bonus plans.

Super Admins have full bonus plan export/import capabilities.

• An ADMINISTRATOR_GROUP column displays in the bonus plan export to show the associated admin groups.

• Super Admins see all groups and all bonus plans upon export.

• Super Admins can leave the admin group column blank on import but local admins do not.

Super Admins also have full edit capabilities within Configure Bonus Plans and can assign bonus plans to admin groups on the Configure Bonus Plans screen.

Any bonus plans that have no associated admin groups are accessible only to Super Admins.

Local Admins can access and import only those bonus plans that belong to the admin groups they are a member of.

A bonus plan export only populates with applicable ADMINISTRATOR_GROUP values.

If values are incorrect, the import job throws a validation error and sends an error e-mail to the Local Admin.

Super Admins have access to all business goals.

Local Admins can access only those business goals that belong to the admin groups that they are a member of.

• The following figure, Decentralized Admin - Bonus Goals File: Super Admin is a Super Admin business goals file. Super Admins can leave the Administrator_Group column blank in the import file, but Local Admins cannot.

• Any business goals that have no associated admin groups are accessible only to Super Admins.

• While importing the business goals, Local Admins can associate only those groups they are members of in the Administrator_Group columns. If incorrect admin groups are named in the file, an error e-mail is sent to the Local Admin.

• Super Admins can export the entire list of business goals. However, Local Admins can export only those business goals their admin group has access to.

• The weights and mappings file is different from bonus plans and business goals.

  • There is no admin group associated with a business goal weight.

  • For an admin to define the business goal weights for a bonus plan, the admin must have access to both the bonus plan and the business goals.

• There is no change in the file format for the weights and mappings import.

  The import job checks the access to bonus plan and business goals to validate access for the admin initiating the import job. If the validation fails, an e-mail message is sent to the admin.

Some best practices to consider:

• An admin who has access to bonus plan A must also have access to all business goals associated with that bonus plan.

• This is required to make sure the weights always add up to 100%.

• If an admin has access to bonus plan A, however, has access to only three of the four business goals associated with the bonus plan, then the system shows an alert message for the Super Admin to correct the problem.

For all validation reports:

• Super Admin has access to all data.

• Local Admins can access only data associated to their admin group.

In the future, more RBP is added to further define more granular Compensation and Variable Pay tasks.

For example, if the Canada Admin Group’s only admin task should be to set guidelines, they are assigned to an RBP role with only guidelines selected.

Assignment-Based Rating (ABR) calculates prorated payouts of each of these jobs, or assignments, based on the job-specific rating.

You must identify the correct Performance Management form applicable to an employee for the given time period (assignment) and to copy the goal and rating information to Variable Pay in order to calculate the correct payouts based on the job-specific ratings.

Assignment-Based Rating can also be used when an employee has multiple team goals or individual goals that must be considered for the bonus calculation.

Example:

• Employee changes roles or locations

• The first manager completes a performance review that is part of the individual component

• New manager completes a year-end review, based on the new role or location, which also contributes towards the bonus calculation

With ABR, a team or individual component can exist for every employee history record.

1. Navigate to the Bonus Calculation Settings of the applicable program.

   Select Yes for Is this Bonus Program based on Assignments? Determine how you want assignments and currency to be displayed.

   

   ABR supports aggregating all assignments to one summary row for payout, or allows one summary row for each assignment.

   The second case might be favorable for global companies where each assignment may have to be sent to different payrolls or cost centers for processing.

   This information presents a high-level description of ABR. Refer to the SAP SuccessFactors Variable Pay Implementation Guide on the SAP Help Portal for more detailed information on ABR configuration and functionality.

2. Select the individual or team rating source:

   • In general, three types of rating sources are supported (by form, import by employee, import by history).

   • For rating source by form, ABR will:

     • Find the matched Performance Management form based on configured rating sources for the team and the individual section.

     • Extract the rating information from the Performance Management form.

     • Calculate the team or individual section payout based on those ratings. (This process is completed during calculation time).

     

     Make selections for how assignments are matched with Performance Management forms. Select the applicable Performance Management forms.

     Be sure to select Save at the bottom of the page. For the individual and team rating source, a Performance Management form template can be used only once. The same form template with overall/calculated rating cannot be used for both individual and team rating source.

In this example, two Performance Management forms have been selected in the ABR program.

Program start and end dates are 5/26/2014 to 4/25/2015.

The first form start date is 5/26/2014 and the second form start date is 1/27/2015.

Since the startDate is selected as the match rule:

• Ratings for the first assignment come from the calculated rating of the first form and the target amount are 100% prorated.

• Ratings for the second assignment come from the calculated rating of the second form and are prorated close to 25% (about three months of the program).

Example: Sid’s bonus data in the planner’s form:

• Imported basis for each assignment: USD 15,000

• Section weights: Individual 20% and Business 80%

• Assignment 1: (Highlighted in pink in the following figure) Target amount is USD 15,000 or 100%

• Assignment 2: (Highlighted in yellow in the following figure) Target Amount is USD 3,990 or 26.6%

• Sid’s ratings from each form earned him a 100% Individual Payout

• Rollup totals are highlighted in purple in the following figure

Customers can add custom fields and add, subtract, multiply, or divide within the assignment level to calculate the assignment level payout for each component.

Configure the number formats in the user interface as needed.

Run the calculation engine.

Launch forms.

Extra configuration details are provided in the Assignment Level Custom Fields Implementation Guide found in the Resources tab of the SAP SuccessFactors Variable Pay Learning Room.

• Gates: Generally defined as some minimum performance level that must be met to receive payout on an associated goal, component (section), or the entire plan.

  Often tied to the incentive plan’s funding mechanism, such as revenue goals, and are used to ensure that a minimum level of funding is achieved before there is payout.

• Accelerators: Used to increase the incentive opportunity when certain performance criteria are met or exceeded.

• When a participant meets their respective accelerator performance criteria target(s), the accelerator can apply to the payout of the individual goal itself, other goals, other incentive components (sections), or the total plan payout.

Gates define a minimum or threshold level of specific performance criteria that impacts payout on another goal, bonus section, or the plan itself. Gates are most often used in one of two ways.

• The first is a minimum level of achievement required of a specific business goal to allow for any payout against another.

• The second is as a threshold level that must be achieved before another goal can exceed payout beyond a certain level.

The following figures contain examples of each scenario where the performance of one business goal impacts the payout of another business goal.

In the example in the following figure Gates – Example 7: Gate to Pay Total Payout, the gate must be met for the plan to payout any award.

• When using ABR, the gate can be applied at the plan summary level.

• Non-ABR configurations as shown after this can be applied at the overall summary level.

In the previous "cap" examples, the gate was "If Revenue<Target Achievement, then the total plan is capped at Target Payout".

This functionality is similar to the caps that we have in place today, but it is driven by the achievement of a single business goal.

The system calculates out all goals, sections, and final amount as it normally would and then cap the final payout at whatever percent was designated in the "gate" rule.

1. On the Program Calculation Settings page, select Yes for the Apply gates for business goals option.

2. Hover over the question mark to export a sample gate .CSV file.

   

3. Edit the file to meet your gate needs. In the example in the preceding figure, Gates and Accelerators: Gates – Configuration:

   • For the Business Unit Plan: If the performanceTarget of the revenue goal is not met, the operating profit goal receives a payout of 0.

   • For the Corporate Plan: If the performanceMax of the revenue goal is not met, the business goal section receives a payout of 0.

   

   • Valid options for GATE_METHOD are: performanceMin, performanceLow, performanceTarget, performanceHigh, performanceMax.

   • Valide options for GATE_LEVEL are: business_goal, business_section, team_section, individual_section, final_payout.

   • Use a MULTIPLIER of 1 if the level of performance is one of the defined performance levels.

     This can also be set as any decimal value (percentage) of one of the performance targets. (Example: The gate level of performance is 90% of target, then set the GATE_METHOD=performanceTarget and the MULTIPLIER as 0.9).

   • Leave TARGET_GOAL_NAME blank if setting a gate for an entire section.

4. Import the file: Plan Details → Import and Export Business Weights.

   Select the new dropdown option for Goal Gates.

   

   An e-mail notification is sent with details on successful and unsuccessful imports.

   All other import files must be configured and imported as described in this training.

   Be sure to calculate the bonus after all import files are imported and validated, and then launch forms.

User on the Corporate Plan: Revenue Achievement (pink) did not meet Performance Max (yellow). The system does the calculations in the business section, but the Business Payouts (purple) are 0.

User on the Business Unit Plan: Payout is only given for the revenue goal.

Revenue Achievement (pink) did not meet Performance Target (yellow). Therefore, there is a 0 payout for the operating profit goal (blue). In this example, the other goals did not receive payout either, due to their own low goal achievement. Payout is only earned for the revenue goal (purple).

Accelerators are another feature often included in incentive plans to focus the participants’ attention on specific goals. They act to accelerate payment of a goal(s) once specific performance criteria have been met.

Example: Accelerator on Goal Payout

• If specific performance criteria (a business goal) are met or exceeded, the payout opportunity for other business goal(s) increases 2% for each goal that exceeds its target.

• The accelerator is identified as a specific goal and when this specific goal hits target, it enables the accelerator. Which is a higher payout line for other associated goals when they hit target.

In the following Accelerator – Example figure:

The "accelerator" goal and rule (achievement level) must be identified.

The goals to accelerate payout opportunity must be identified.

The accelerated payline must be identified.

1. On the Program Calculation Settings page, select Yes for the Apply gates for business goals option.

2. Hover over the question mark to export a sample accelerator .CSV file.

   

3. Edit the file to meet the accelerator needs. In this next example, for the Corporation Plan:

   If the performanceTarget of the revenue goal is met, the payout for the operating profit goal increases by 50%.

   

4. Import the file by navigating to: Plan Details → Import and Export Business Weights. Select the new dropdown option for Goal Accelerators.

   
   • An e-mail notification is sent with details on successful and unsuccessful imports.
   • All other import files should be configured and imported as described.
   • Be sure to calculate the bonus after all import files are imported and validated, and then launch forms.

User on the Corporate Plan:

• Revenue Achievement (pink) met Performance Target (yellow).

• Operating profit payout must have been 100%, as the Performance Target was met, but the payout has been increased by 50% (purple).

• Business payout amount must have been 100% but has increased to 130% because of the accelerator (blue).

Some incentive programs use a combination of gates and accelerators. Since gates determine the threshold level or minimum level of performance before an award is paid, gates generally override any accelerator rule. Except in cases where a business goal has an accelerator and there isn’t a directly associated gate.

Use case: A client uses an incentive plan based on separate company, division, and individual results.

• Admin sets up one Variable Pay program in the SAP SuccessFactors Variable Pay solution.

• Imports goals for the company in one business goal section and goals for the divisions in a different business goal section.

Business goal sections are always additive, so the following example illustrates how bonus calculations would work out with Formula 2 and 3:

• Formula 2: Base X (Business 1 + Business 2 + Business 3) X Individual

• Formula 3: Base X (Business 1 + Business 2 + Business 3 + Individual

1. Select the Multiple Business Sections checkbox within Set Bonus Calculations.

2. Load multiple Variable Pay Goal Plan templates. Each section must be associated to a different Variable Pay goal plan template.

   

   Reminders:

   Load in Provisioning.

   Each template must have an ID from 8000 through to 8999.

   Don't forget about other requirements on importing Variable Pay Goal Plan templates previously discussed in this course.

3. Configure Bonus Plans – Can be loaded through import with the usual process, but must be further defined in Configure Bonus Plans.

   • Section weights must be defined in Configure Bonus Plans. Multiple business section weights cannot be defined in the bonus plan import file.

   • An option when importing would be to enter a "dummy" business section weight and then update the weight in Configure Bonus Plans.

   • You can opt to only configure through Configure Bonus Plans, but remember, if capping is used, this must be imported in the bonus plan import file.

   

   In Configure Bonus Plans, further define the business section weights within each plan – this overwrites the imported section.

   

   The employee history data file is imported with the usual process.

4. Import business goals.

   Must be associated to the applicable business sections through the ID of the applicable Variable Pay goal plan template.

   

5. Import weights and mappings.

   An additional column must be used to associate goal weights to the correct business section and Variable Pay goal plan template.

   

6. Define form columns in Configure Label Names and Visibility and Column Designer. Refer to other sections in this course for more details on how to define form columns.

   Configure Label Names and Visibility. A new Business Total section is available for column definition.

   

   In Column Designer, add columns and configure the separate business section in color groups, if desired.

7. Set number formats and be sure to attach the correct formats to the correct columns.

8. Calculate the bonus and launch forms.

Admins are now able to set up payout curves with an unlimited number of steps or interpolation points. It gives customers much more flexibility to set up more complex payout curves in their Variable Pay plans.

Areas impacted:

• Calculation

• Reports

• Goal Gates and Accelerators

• Compensation Profile

• Worksheet

1. Set the Enable Flexible Payout Curve radio button to Yes.

   

2. Under Plan Details, choose the Import and Export Flexible Payout Curves menu option. Business goals must have been uploaded in the system before importing flexible payout curves.

   

   The file must contain the following columns:

   • GOAL_NAME must be consistent with the Goal Name in the business goals file.

   • GOAL_PLAN_TEMPLATE_ID refers to a business goal template.

   • LOOKUP_FIELD and LOOKUP_VALUE refers to the lookup field and value used in the business goals file.

   • PEFORMANCE_STEP refers to the payout point.

   • PAYOUT_PERCENT refers to the payout percentage which corresponds to the payout point.

   

3. Import the file once file setup is completed. Wait for a success/failure notification.

4. Calculate the bonus payout. Wait for a success/failure notification.

5. Check the Bonus Detail Report.

   Notice the Forecast Threshold/Payout Percent column and the Goal Result Threshold/Payout Percent column. These columns display the information of the payout points within which the results lie. For example, if the goal results are 45, the Goal Results Threshold/Payout Percent shows the value as (40:60, 07:0.8), where 40 and 60 are the payout points and the 70% and 80% their corresponding payouts.

   This is a change from how the standard reports were shown previously with the information from five fixed points.

6. Import the gates and accelerators file, if required. If you are using gates and accelerators in your Variable Pay program, the setup of the import files for those also changes.

   

   Previously, for the import file for the goals and accelerators, the "GATE_METHOD" and "ACC_METHOD" column would have one of the values from one of the predefined levels (performanceMin, performanceLow, performanceTarget, performanceHigh, performanceMax).

   With the flexible payout curves, these predefined levels do not exist anymore. Hence, you must be using the actual values such as 20, 30, 0.2, 0.3, or whichever way you are defining those "PERFORMANCE_STEP" in the file uploaded earlier.

   Import file column definitions.

   • GATE_GOAL_NAME: Defines which business goals in which plans act as a gate (EBITDA).

   • GATE_LEVEL: Defines how the gate is applied (at what level) – business goal, section, or final payout: business_goal.

   • TARGET_GOAL_NAME: If applied to another business goal, the target goal is named (EBITDA – Division).

   • GATE_METHOD: Defines what level of performance must be achieved by the gate goal – performance min, low, target, high, and max: performanceTarget (previously), and 20–step value (now).

   • MULTIPLIER: Use a multiplier of 1 if the level of performance is one of the defined performance levels. This can also be set as any decimal value as a percentage of one of the performance targets. (Example: The gate level of performance is 90% of target, then set the GATE_METHOD = performanceTarget and the MULTIPLIER as 0.9).

   • TARGET_PAYOUT_PERCENT_CAP: Defines whether the target is capped by the gate achievement and, if so, at what percent?

7. Once the setup is complete, you can run Calculation of Bonus Payout and launch forms.

When you open the worksheet, you can see the graph for the payout curve when you click on the business goal.

The same graph is visible in the Compensation Profile.

1. Enable Role-Based Permissions.

2. Enable Generic Objects.

3. Enable the Attachment Manager.

4. Grant permissions for the Metadata Framework (MDF) on the RBP Permission Settings screen.

5. Enable MDF Rule for eligibility on the Settings screen.

6. Create rules in Configure Business Rules. The use of Application Specific Scenarios are used to configure eligibility for Bonus Plans based on background element data.)

   
   Note

   The first three steps are completed in Provisioning.

7. Migrate previously created rules through the .CSV eligibility file to MDF.

   • After selecting Migrate, the legacy rules of this program will be migrated to MDF Rule table and you can track migration status on the Monitor Jobs page.

   • Pay attention to rule name convention. For example, legacy rule name is "Corp1", new rule name becomes Corp1_VRP_3312 (3312 is program ID).

   

8. Reconfigure bonus plan setting for eligibility rule on the Configure Bonus Plan page, or after creating rules.

9. The eligibility page shows all the rules in the bonus plan.

   

1. Test eligibility of employees using the test rule icon.

2. Type the user IDs and choose which rule you want to test them against.