2076792 - Admin 101 - Program Common Definitions - Variable Pay

SAP Knowledge Base Article - Public

2076792 - Admin 101 - Program Common Definitions - Variable Pay

Symptom

  • A list of common terms used in a variable pay program.

Environment

  • Variable Pay.

Resolution

  • Employee Demographic Data - the standard data set imported into the system via User Import.
     
  • Employee Compensation Data - the additional data imported into the system for compensation purposes (current salary, pay grade, etc).
     
  • Employee Historical Data - the additional data imported into the system for employee bonus purposes. This data is effective dated and may contain 1 or more records per employee. This data is very customer specific, includes eligibility related data, and basis data.
     
  • Compensation Form Template - xml file that stores business logic definitions. Variable Pay uses the compensation xml template, but it is created within the application as the Variable Pay admin GUI screens are completed rather than being imported through Form Templates.
     
    Variable Pay/ Manager forms replicate business logic from the form template at creation. Compensation forms are routed to different inboxes through the system's workflow.
     
  • Compensation/Bonus Plan - a specific set of compensation rules used to pay out an employee's compensation. This term is used primarily to describe a customer's business process rather than the Successfactors' configuration. A compensation bonus plan contains many weighted business goals.
     
  • Compensation/Bonus Program - a set of compensation plans applied during a specific time interval. The compensation plans are associated with and has a one-to-one relationship with a compensation form template.
     
  • Compensation Planner - the user who makes compensation allocation recommendation in the system. The compensation planner can be different from the employee's manager. Compensation forms are routed to the compensation planner's inbox.
     
  • Compensation Administrator - the user who sets up and maintains the compensation data, plans, and forms by using the system administrator screens.
     
  • Compensation Plan Eligibility - the set of business rules that attach an employee to a compensation plan for a specific time interval. These business rules depend on employee historical data and can be very complex.
     
  • Assignment - the attachment of an employee to a bonus plan for a specific time interval. This assignment is determined by applying the compensation plan eligibility rules to the employee historical data for each bonus plan and each employee. Note that it is possible for an employee to be eligible for more than 1 bonus plan per time period and thus occupy two or more assignments at once.
     
  • Assignment Basis - the base amount in functional currency used to calculate bonuses for a specific assignment. This assignment basis is stored in the employee historical data in an annualized fashion.
     
  • Assignment Proration - the coefficient that represents the portion of the employee's time in the assignment over the total review period. For example, if the review period is 360 days and the employee assignment for a particular bonus plan is 180 days, then the assignment pro-ration would be 180 days / 360 days = 0.5. The assignment pro-ration is calculated by Successfactors.
     
  • Assignment Target Percent 1 -the coefficient that represents the bonus target percent for the overall assignment. The source for the assignment target percent is configurable.
     
    Assignment Target Percent 2 - an additional coefficient that multiples against the entire assignment. The source for this target percent is configurable.
     
    Assignment Target Percent 3 - an additional coefficient that multiples against the entire assignment.
     
    Assignment Target Percent 4 - an additional coefficient that multiples against the entire assignment. The source for this target percent is configurable.
     
  • Assignment Target Amount -
    Assignment Basis * Assignment Pro-ration * Assignment Target Percent 1 * Assignment Target Percent 2 * Assignment Target Percent 3 * Assignment Target Percent 4.
     
  • Business Goal - Specific business goals are defaulted to specific bonus plans. Per assignment, the business goals and weights can later be changed from these defaults. Business goals are similar to goals in the current MBO bonus system. The primary difference is that business goals can be evaluated by organization rather than just by person.
     
  • Goal Weight - each goal is weighted relative to the other goals in an assignment. All goal weights in an assignment must total 100%. The goal weight is multiplied by the assignment target amount to determine the goal basis . Default goal weight is determined by the bonus plan / business goal relationship. The goal weight can be changed per assignment.
     
  • Goal Basis - Assignment Target Amount * Goal Weight.
     
  • Goal Metric - the criteria on which the business goal is evaluated. For example for a fiscal business goal, the goal metric could be "earnings per share" or "EBITA". For a sales business goal, the goal metric could be "quota attainment" or "market saturation". Goal metrics can be measured in variety of different ways (amount, float, percentage, etc). For example, earnings per share is an amount while quota attainment is a percentage.
     
  • Goal Target - target values for goals. This is a set of target achievements for the goal metrics. These goal targets can be expressed as a single number or series of numbers for the specific goal target. This is configurable by bonus plan. For example, goal targets for a business goal may be:
     
    "Earnings per share = $20.00", or
     
    "Earnings per share minimum =$18.50, target = $20.00, maximum = $21.50", or
     
    "Earning per share min1 = $16.22, min2= $18.53, target = $20.20, max1= $22.23, max2 = $24.00"
     
    The goal forecasts and actual goal results will be compared against these guidelines to compute a goal forecast payout percent and a goal results payout amount.
     
  • Goal Forecast - estimated value of the goal metric. The goal forecasts are imported into the system by the compensation administrators. These values can be re-imported several times during bonus planning to determine several estimates. The rest of the bonus calculation will calculate based on these forecasts so that the compensation administrators can estimate their total spending.
     
  • Goal Forecast 2 - similar to goal forecast.
     
  • Goal Results - final achievement numbers for the goal. The goal results are imported into the system by the compensation administrators. These values can be re-imported several times during bonus planning to determine several estimates. The rest of the bonus calculation will calculate based on these results so that the compensation administrators can determine the final payout.
     
  • Goal Payout Function - the defined comparison between business goal forecasts, business goal results and goal payout percentages. This relationship can be defined as a step-scale model ("step") or a linear interpolation ("interpolation").
     
  • Payout function - the combination of targets and functions, i.e. the curve to find the payout for any result.
     
  • Goal Forecast Payout Percent - the coefficient used in the forecast payout calculation for the goal. The forecast payout percent is derived from goal targets and goal forecast.
     
  • Goal Forecast Payout Percent 2 - similar to goal forecast payout percent.
     
  • Goal Payout Percent - the coefficient used in the bonus payout calculation for the goal. The goal payout percent is derived from the goal targets and the goal results.
     
  • Goal Forecast Payout Amount - Goal Basis * Goal Forecast Payout Percent.
     
  • Goal Forecast Payout Amount 2 - Goal Basis * Goal Forecast Payout Percent 2.
     
  • Goal Payout Amount - Goal Basis * Goal Payout Percent.
     
  • Forecast Assignment Payout = Sum ( goal forecast payout amounts) for assignment.
     
  • Forecast Assignment Payout 2 = Sum (goal forecast payout amount 2's) for assignments.
     
  • Assignment Payout = Sum ( goal payout amounts) for assignment.
     
  • Calculated Forecast Bonus = sum (Forecast Assignment Payouts) per employee.
     
  • Calculated Forecast Bonus 2 = sum (Forecast Assignment Payout 2's) per employee.
     
  • Calculated Bonus = sum (Assignment Payout Amounts) per employee.
     
  • Employee Performance Targets- min / mid / max guidelines based on employee performance. These guidelines should operate similar to merit guidelines on the salary worksheet. Employee Performance Targets defined at the program level.
     
  • Employee Performance Modifier Percent - the discretionary coefficient representing the employee's performance. This is generally inputted by the compensation manager and bounded by the performance guidelines. Not all business goals are affected by the performance percent. This is configurable by bonus program.
     
  • Forecast Payout Amount - Calculated Forecast Bonus * Employee Performance Modifier Percent.
     
  • Forecast Payout Amount 2 - Calculated Forecast Bonus 2 * Employee Performance Modifier Percent.
     
  • Payout Amount - Calculated Bonus * Employee Performance Modifier Percent.
     
  • Exceptions - occurrences when the employee history data in the system of record are replaced by employee history data imported by the administrator .
     
  • Overrides - occurrences when parts of the calculated bonus data are replaced by administrator user inputted values.
     
  • Direct Results - this term describes the administrator's ability to circumvent the comparison of business goal targets to results in determining the results payout percent. The administrator can import a direct result with a business goal that equals the results payout percent.
     
  • Direct Results Reason Text - this term describes a short text description which is also imported in by the administrator. The direct results reason can be used to indicate why the direct results were imported in to the business goals.
     
  • Bonus Cap Percent - a percentage defined at the bonus plan level that represents the maximum bonus allowable for that bonus plan assignment. The application multiplies the bonus cap percent by the assignment target amount to determine the bonus cap amount. This bonus cap amount is compared against the assignment payout amount and the lesser of two values is used for the employee's bonus.
     
  • Bonus Cap Amount - an amount that represents the maximum bonus allowable for that bonus plan assignment. The application multiplies the bonus cap percent by the assignment target amount to determine the bonus cap amount. This bonus cap amount is compared against the assignment payout amount and the lesser of two values is used for the employee's bônus.

Keywords

KBA , sf varpay admin , LOD-SF-CMP-VAR , Compensation Integration Issues with Variable Pay , How To

Product

SAP SuccessFactors HCM Core all versions