SAP SuccessFactors Compensation Introduction & Overview – Part 2

Hi All,


This is the continuation of the document SAP SuccessFactors Compensation Introduction & Overview

Thanks for all for you comments and feedback for my first post


I’m introducing About in Part 2

  1. The Components introduction
  2. Employee Specific Data (UDF)
  3. Plan Specific Data(Currency Conversion / Pay Matrix)
  4. Proration with types / options
  5. Benchmarks for Salary (Compa-ratio / Range Penetration)
  6. Budgets
  7. Guidlines
  8. Eligibility
  9. The Rote Map Process
  10. Executive Review
  11. Approvals Based on Hierarchy


The Components:- 

Every business has a different pay plan. Numerous diverse circumstances can be managed using SAP SuccessFactors configuration.

To replicate your current system, you could want to adopt SAP SuccessFactors Compensation. Your system might alter as you gain knowledge and experience with SAP SuccessFactors’ ability to streamline adherence to industry best practises for pay. For instance, the remuneration Planning Template defines the guidelines for remuneration. Therefore, it will be simpler to implement a set of rules in the system the more generally they may be applied.

Employee Specific Data:-

Your payroll system or human resource information system (HRIS) may update employee data from a single source thanks to data integration between SAP SuccessFactors and those systems. You will select the mapping between SAP SuccessFactors fields and those in your current database during implementation.

UDF(User Data File)

It is necessary to configure the User Data File (UDF) before uploading it to SAP SuccessFactors. The employee information needed for compensation planning is in this file. The Appendix contains a complete list of the standard fields that are offered. But there are many different standards for compensation data. Together, you and your PS consultant will go over the standard fields to identify the ones that apply to your needs.

Note:-Customers using Employee Central or an API, the data will be mapped to fields in a different manner.

Plan Specific Data

Aside from employee data, SAP SuccessFactors Compensation also uses auxiliary which supports the different calculations.

Currency Conversion

Compensation data can be displayed in local currencies on SAP SuccessFactors. Currency conversion tables are imported into the system to set the exchange rate.
There are three different currency views: functional currency, local currency, and planner currency. Functional currency means that all forms will be displayed in the same currency for all users. Planner currency means that all employees’ salaries and other information will appear in the local currency of the compensation planner.
It is necessary to include exchange rates for all conceivable currency pairings. The exchange rate between the pound sterling and the euro, for instance, is necessary for a manager in Great Britain (GBP) who is making plans for a team in the Eurozone (EUR). Use

Pay Matrix

The salary pay matrix is a table that establishes pay scales depending on grade level and up to three optional characteristics (for instance, nation, city, and/or job level). Pay matrices, which are necessary for compa-ratio and range penetration calculations, specify the minimum, midpoint, and maximum pay levels for each grade.

Proration :

SAP SuccessFactors has a set of standard functions that support the majority of implementations. Complex configuration is possible, if required.

Proration:- It is possible to correctly pay employee raises in proportion starting on the date of hire or the date of the most recent review. Prorating may be used to raise either a single component or the total. Salary prorating and raise prorating are the two prorating types.

Salary Prorating:- Adjustment is not applicable to a single increase component, such as prorated merit. Budgets can also use proration %.

Raise Prorating:- The overall wage rise will be prorated in accordance with this; the proration percentage will also be used to merit, adjustment, and promotion.

Benchmarks for Salaries:-

The benchmarks listed below are provided by SAP SuccessFactors and are computed using both employee and pay matrix data:

Compa-ratio : The percentage of the wage range’s midpoint that the employee’s remuneration represents.

Range Penetration : the ratio of a person’s compensation to the entire pay range as opposed to the middle.

These can both be listed on the compensation form, or just one of them. One of these options may potentially be utilised as a component of the guidelines’ selection criteria.



The overall budget for each employee is decided by the company based on a number of different factors. The processes used by some organisations to create the compensation budget are quite formal, while those used by others are just percentage increases.

In order for planners to view the amount allotted for their teams, SAP SuccessFactors Compensation offers the capability to mirror the calculation. The form displays the team budget. In a soft budget, overspending is permitted but would be noted in red language for those with approval levels to view. By prohibiting entry outside of the budgetary limits, on the other hand, the budget can be upheld.

Budget management can be done in a variety of ways. Based on your needs, your consultant will work with you to determine the best course of action.


According to a set of criteria, guidelines provide planners instructions on how much pay rise to give employees. Such criteria may, for instance, be based on employment level, budget group, performance evaluations, where they fall within the range, and so forth.
There are guidelines available for the following aspects of compensation, including:

Merit,Promotion,Stock,Lump sum

The entire component list will be discussed with you by your consultant.Guidelines can be set up to have a hard stop (so that planners won’t recommend more than what is allowed) or to allow planners to recommend more than the maximum (but they will have to include a note and justify the additional increase).


You can establish eligibility rules that function as filters to identify who is eligible for merit raises, salary increments, promotions, and other rewards. But first, it’s important to define where eligibility begins. Options consist of:

All current workers are qualified.
No staff members are qualified.

Rules can be defined at three levels:

A.Compensation plan template level

B.Component Level

C.Field Level

The Process (Introduction)

Once the Compensation Form Template is configured for the compensation cycle, the forms are launched. The route map determines the chain of approvals and reviews.

While Executive Review offers an alternative method of reviewing, compensation planners are notified in their To Do lists that they have compensation planning to complete.

Route Maps

A compensation worksheet’s workflow is determined by a route map. Upon entering a recommendation, the form is sent through a programmable approval process. Until it is finished, the worksheet is sent back and forth between the planner(s) and approver(s), occasionally between two workers.


Executive Review:-

SAP SuccessFactors planning A Compensation Planner’s team is the focal point of compensation. Executive Review, on the other hand, allows access to all planning and visibility into the entire process.
Without having to open individual forms, managers with Executive assess access can assess compensation proposals for all of their areas of accountability and down the hierarchy. In this approach, they might be aware of the compensation planning without necessarily taking part in the approval of the route map. Managers can use Executive assess to assess budget allocations and guarantee equity among teams and personnel.
Executive Review can be set up to be read-only or to allow editing. Individual employee compensation suggestions can be changed with edit access.

Hierarchy-Based Approvals:-

Alternative management strategy for the approval of compensation planning that does not involve a route map is hierarchy-based approvals. The compensation manager can use this technique to go deeper into an organisation and see the decisions that have been made. A single button allows the management to “approve all” for their entire organisation once they are pleased.
It is crucial to note that hierarchy-based approvals are invalid for Variable Pay configuration. If utilising Variable Pay, it may not be advisable to employ hierarchy-based approvals to avoid confusing end users with two different approval processes. If you believe that your business should take this approach into consideration, be sure to have a thorough discussion with your implementation expert.


Scroll to Top