Explaining Customer Analysis

Pre-Kickoff Meeting:

• Hold a requirements meeting with the customer before the kickoff meeting.

• Determine how the customer is currently calculating bonuses.

• Obtain all customer documents about their Variable Pay program (plan definition document, spreadsheets, and so on).

Discovery Meeting:

• Attend a formal meeting with the customer project team to document requirements.

• Use the prekick off meeting information to prepare and possibly create a mock-up Variable Pay form in your training/demo instance.

• Use the Readiness to Start checklist (found in the SAP SuccessFactors Community) as a guide for this meeting.

• What metrics do you use to calculate bonus payout (Business, Individual, and/or Team sections)?

• How do you calculate your final payout?

  • Each section has a weight (additive)

  • Each section is multiplied (multiplicative)

• What Performance Management forms do you use for Individual/Team sections?

• Do you use rating or achievements percent for Individual/Team sections?

• What are your Individual/Team guidelines?

• What currencies are you using?

• What is the Variable Pay form approval route map?

Analyze the information collected from the customer to perform the following:

• Define a Variable Pay program

• Capture employee data

• Design the bonus plan(s)

• Establish a Variable Pay budget

• Configure the Variable Pay form

• Determine how to communicate Variable Pay results

Variable Pay program settings include:

• Date range of the plan period (used to calculate proration)

• Goal calculation sections (business, individual, and/or team)

• Bonus calculation formula (additive or multiplicative)

• Performance Management form for individual and/or team sections

• Individual and/or team guidelines

• Currency exchange rate and views

• Manager instructions

• Route map

Variable Pay has five formulas to calculate the final payout based on the Business, Individual, and/or Team sections.

An option to disable Business goal is available in cases where employee’s bonus is not tied to any business objectives.

Base is the Bonus Target Amount (in the employee history data file, the column header is Basis).

Customer requirements can vary. The following are some reasons to implement multiple variable pay programs:

• Different plan period date range

• Different bonus calculation formula

• Different columns on the Variable Pay form (Entry Level, Employee History Data, or Calculation fields)

• Different currency exchange rate sets

• Different route map

In Variable Pay, you can pull user data from the user data file to be displayed as custom fields in the Entry-Level section. These are pulled into the form by using an Import Key–the same way as in SAP SuccessFactors Compensation.

An employee’s record must first exist in the User Directory–you cannot import employee history unless the employee exists in the User Directory.

When using point-in-time or MBO bonus calculation, basis is pulled from the user data file using an Import Key.

Employee history data file:

• Employee fields that display in the assignment details

• Lookup field is used for bonus plan assignment (eligibility)

• Lookup field is used to associate business goal achievement

Eligibility rules determine who are eligible for which bonus plans based on one or more lookup fields in the employee history data file. Application-Specific Rule Scenarios can be created via the Eligibility Engine with enhanced functionality. As an example, a specific rule scenario can be created to define bonus eligibility based on background elements for the Variable Pay and Total Compensation templates. Refer to the Help Documentation for more information.

Application-Specific Rule Scenarios can also be imported from the eligibility rules data file.

If more than one lookup value is used, then the bonus plan is assigned to employees with ANY one of the matching values.

Variable Pay assigns the specified bonus plan when the employee’s bonusCode in the employee history data file equals:

• Corp = Corporate Bonus Plan

• BU1 or BU2 or BU3 = Business Unit Bonus Plan

Some questions to gather employee-related data are:

• What fields from the user data file do you want to display in the Entry-Level section?

• Are you importing a rating from the user data file instead of a Performance Management form?

• Do you prorate the target amount?

• What fields do you want to display on the Employee History Data section (Job Title, Start/End Dates, Salary, and so on)?

• What field(s) do you use for eligibility (Department, Division, Bonus Code, Store, and so on)?

• Can people be eligible for more than one plan during the plan period or at the same time?

• What employee field do you use to associate business goal achievement (Department, Division, Bonus Code, Store, and so on)?

Bonus plans can be imported or can be configured in the UI. Includes the following settings:

• Section weights for the Business, Individual, and/or Team sections (Additive formula).

• Cap percent (maximum final payout).

• Eligibility rules.

Plans are linked to business goals via goal weights file.

Business goals are associated to a bonus plan using the weights and mappings data file. It includes the following information:

• Business goals’ min, low, target, max, high, and achievement.

• Achievement payout function which determines how achievement is calculated (direct, interpolation, or step).

• Displays as an amount (money), percent, or number.

• Goals map to employee history file via lookup field and lookup value.

Multiple bonus plans can be created in one Variable Pay program. Reasons for designing multiple bonus plans include:

• Different section weights (Business, Individual, and/or Team)

• Different set of business goals

• Different business goal weights

• Different bonus plan caps

Some questions to ask the customer to help guide you in determining the bonus plan design:

• What are the bonus plan weights for the Business, Individual, and/or Team sections?

• What are the business goals and weights that you measure on each bonus plan?

• Do you have the same business goals for employees, but different measuring points?

• If using different measuring points, what field do you use to assign an employee the measuring point (for example, Division, Department, Location)?

• How do you calculate achievement percent (direct, interpolation, or step)?

Budgets are optional in Variable Pay. Variable Pay can budget and track the discretionary component of incentive plans, allowing managers to monitor and manage spend/costs.

Some probing questions to ask the customer to help guide you in determining budget calculation:

• Do you use budgets?

• Do you forecast or model the business goal payout?

• Can the manager enter a discretionary value that draws from the budget?

• Can a manager go over the allocated budget amount?

• Is the budget funded differently per group (for example, Division, Department, or Location)?

Select the Entry-Level section standard/custom columns and display the order. Admins use the Column Designer to configure Entry-Level fields.

Select the Calculation section columns that display in the Business, Individual, and/or Team sections.

A rounding format is used.

Override:

• Entry fields that can be used to override a calculated payout.

• Fields that can be given specific view/edit rights to Manager, Second Manager, HR, and/or Admin.

Here are some probing questions to ask customers to help guide you in designing a Variable Pay worksheet:

• What fields do you want to see in the Entry-Level section?

• What fields do you want to see in the Calculation section?

• What are your rounding rules for money, percent, or specific columns?

• Do managers have the authority/discretion to change payouts?

• Do you need an override field?

• Employee History Report: Run this report for output audit.

• Employee History Gaps Report: Shows employees with gaps in service (have a proration < 1 for a full year).

• Employee History Overlaps Report: Shows employees whose start dates and end dates overlap for bonus plans (not goal assignments). The overlap could be a valid case (or not). For example, some companies allow employees to be covered by more than one bonus plan.

The Bonus Payout Details report is the aggregate report (export). It shows multiple pay items per employee. It is used to prove assumptions and calculations. It is a critical report for a Variable Pay administrator.

There are multiple rows per employee–it delivers calculated payouts for every goal within a bonus plan. The column names and labels are defined in the Report Definition Files (RDF) by SAP SuccessFactors.

The Result Payout by User (AK) shows the final calculation for an employee before individual performance modifier.

Suggestion: Sort on User Name and Start Date.

Column AJ shows the payout per assignment (read: per bonus plan).

Assignments are determined by Start Date and End Date. If more settings are enabled, dates are matched on the worksheet instead of outlying assignment dates.

Reviewing the example in the following figure, Result Payout by User (AK) Column–Example, Marcus Hoff has one assignment and is covered by one bonus plan. However, Richard Maxx has two assignments and is covered by two bonus plans. Column AI shows the payout for each employee per goal.

The Bonus Payout Details Report can be run after the Calculate Bonus process is completed. It shows Bonus Payout per employee per form. Sums pay items per employee. It includes a manager’s discretionary input (performance modifier) if applicable. It shows the matching of employee assignments with business goals.

Variable Pay has table (ad-hoc) report options, allowing clients to create customized reports in Report Center. Clients can choose to send table reports to the HRIS rather than the previously mentioned standard Bonus Export reports, as it allows the user to choose the data being generated. These reports can be generated in local or other currency.

In Report Center, users with create permissions can create, edit, run, and share reports in Report Center.

In addition to single domain reports, Cross Domain reporting is also available. With Cross Domain reporting, permissioned users can create one report joining data from both the Bonus Detail and Bonus Payout domains.

Variable Pay Audit reports can be run to give more insight into data changes during a planning cycle. The Audit Tool provides a report in spreadsheet format on which field values have been entered or changed for worksheets, profiles, and Executive Review. Customers use this report to track who is changing the system along with what changes are made. The report displays both before and after values.

When changes are made via proxy, the report also captures the user and proxy name. The audit data is stored for 90 days. The Activity Audit page allows customers to specify which data to extract for an employee or for a worksheet, over a particular date range.

The Audit Tool is only available on customer production environments. Customers on the SAP HANA database can self-activate the Audit Tool by following these steps:

• Enable these permissions from Role Based permissions → Administrator Permissions → Admin Center Permissions → :
  • View Read and Change Audit Configuration
  • Edit Read and Change Audit Configuration
• From Action Search, enter Manage Audit Configuration.
• On the Change Audit tab, switch on the Change Audit option, and save.
• Switch on General Audit. This activation process normally takes about 24 hours.

Once you have activated the audit tool:

1. Navigate to Actions for All Plans → Company Settings and enable the setting, Allow Compensation Administrator to export compensation plan activity audit.
2. Navigate to Manage Worksheets → Plan Activity Audit.
3. Select the appropriate report parameters:
   • Activity by Template or Employee
   • Desired Worksheet
   • Date ranges
4. Export the results.

Variable Pay results can be communicated to employees via:

• Reward Statements

  • Generating statements that summarize employee payout.

  • Can be combined with SAP SuccessFactors Compensation.

  • Can be linked to the Employee Profile.

• Employee File–Individual View

  A live profile page that allows the employee to view their bonus plan(s)

Some probing questions to ask the customer to help guide you on determining reward statement design and reports:

• How are the bonus plans communicated to employees?

• Do you use confirmation/reward statements? If so, what fields must be included on the statement?

• Should the employee be able to review their bonus plan(s) in their Employee File?

• What fields does your HRIS need to import the Variable Pay data?

1. How many Variable Pay programs does the customer need?

2. What reporting structure are they using?

3. What Calculation sections will the customer use in the Variable Pay program (Business, Individual, and/or Team)? If used, are they weighted? If so, what are the weights?

4. What bonus calculation formula should the customer use for their program? Why?

5. What are the program plan start and end dates?

6. Are they using SAP SuccessFactors Performance Management (PM) forms for the Individual or Team sections? If so, do they use rating or achievement percent?

7. What are the guidelines for the Individual and/or Team sections?

8. What currencies are they using?

9. What custom data field(s) must be populated from the user data file?

10. What fields must be in the employee history data file?

11. What are the business goals and weights for the bonus plan(s)?

12. What are the business goals achievement measuring points?

13. How should they calculate business goal achievement (direct, step, or interpolation)? Why?

14. Is there a bonus plan cap?

15. How many bonus plans do they need to create? Why?

16. Is there a budget? If so, which budget value formula will they use? Do managers have to stay within budget?

17. What fields should be displayed in the Entry-Level section?

18. What fields should be displayed in the Calculation section?

19. Do they need the Override field?

20. What are the rounding requirements?

21. Can managers change the individual payout amount?

22. How do they communicate the bonus payout results to the employee?