Describing SAP SuccessFactors Compensation

After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Outline the compensation process (salary and bonus)
  • Explain how the Reward and Recognition (Spot Awards) program works

Compensation Process

Begin the video to get started on SAP SuccessFactors Compensation.

SAP SuccessFactors Compensation can help you build and manage strategic compensation programs that align with the needs of your employees, your business, and your budget.

SAP SuccessFactors Compensation solution is comprised of these components:

  • Compensation Planning: Supports salary and long-term incentive planning
  • Variable Pay (Bonus) Planning: Supports short-term incentive planning
  • Reward and Recognition: Supports cash-based and point-based peer-to-peer award programs

Salary Planning: High-level Steps

  1. Salary Worksheets are launched.

    At the start of every compensation cycle, administrators create a compensation template to define all the settings necessary for the compensation review. A worksheet is created for each compensation planner.

    The worksheet has all the necessary information to assist planners to decide on a recommendation:

    • How much of an increase can be entered? Guidelines take away the guesswork from the planner. The system provides a range of increase based on certain criteria. For example, it could take into account the employee's performance rating, job level, salary benchmarks, and so on.
    • Who is eligible for an increase? Eligibility rules are created to either hide non-eligible employees from the worksheet or gray-out the entry fields.
    • How much is the allocated amount for my team? Budgets can be displayed to show the amount allocated to the team and how much is already spent. It can also provide a hard stop to avoid overspending.
  2. The worksheet is sent to planners

    A route map establishes the steps and roles that are involved in a compensation review. When the form is routed to a step, the user can go to HomeCompensation tabInbox to open the worksheet. The planner then proceeds to enter their recommendation and send it to the next step of the approval process.

  3. Completion

    When the recommendation has been approved and finalized, the final salary is published to SAP SuccessFactors Employee Central (or an external HRIS solution) to update the employee's compensation record.

  4. Compensation Statements

    Reward statements can be provided to communicate the salary increase, bonus, and equity incentives for employees.

Variable Pay (Bonus)

Variable Pay is the bonus component of an employee compensation, what is called short-term incentive. SAP SuccessFactors Variable Pay supports and standardizes the bonus planning process. The bonus planning process is the same as that of compensation planning.

Bonus Worksheet

The bonus worksheet breaks down how the total bonus payout was calculated. Payout results are typically comprised of business, team, and individual employee performance.

Rewards and Recognition

More and more organizations want to encourage peer-to-peer recognition to provide timely recognition for outstanding company contributions or participation in special projects. Organizations also want to reward years of service or other milestones reached by employees.

SAP SuccessFactors Reward and Recognition provides a way to manage, budget, and administer these spot and milestone award programs.

Types of Reward

The types of rewards are:

  • Currency: The award is given in cash.
  • Thanks: The award is an acknowledgment of appreciation with no compensation.
  • Points-based: Instead of cash, points are awarded. These points can be accumulated and then redeemed by the employee. You set up the points system, how the points can be redeemed, and which vendors the employee can use.

Similar to that of salary and bonus planning, awards are often subject to budget, eligibility, guidelines, and approval process.

High-level Steps in Nominating an Employee for an Award

  1. Search for the employee you would like to recognize.
  2. Choose the award program.
  3. Select the award category and level.
  4. Enter a message for the recipient.
  5. Submit for approval.

Once the awards are approved, the recipients are notified.

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