Compensation Management Systems help organizations to stay competitive by implementing HR strategies that allow to incentivize performance and goals achievement and while doing so, also take care of ensuring that all employee budgets are in control; to ensure the right employee are in the right compensation buckets.


Manual handling of budget planning typically results in several worksheets being emailed across to several mangers and the Compensation Analysts is left with a strenuous task, of ensuring these worksheets are returned in time, duly filled in and then consolidated. Additionally, privacy and confidentially laws might be breached, when compensation related data of an employee is accidentally shared with a manager who is not on the “need to know” list. Typical situations would be transfer, change of department, change of location etc .


While I have listed sufficient reasons for companies, big or small to automate their entire Compensation Management process, companies that are already automated in this space face a different set of challenges. Compensation is almost always tied to Performance /Goals management, while their respective systems don’t quite enjoy the same level of integration. Also given the amount of background salary data, a potential hire has access to via social media, Glassdoor, LinkedIn etc , compensation management systems must be agile to allow managers to decide salary and bonus packaging to snatch the right talent, at the right time from the talent market.


Such issues among organizations have shown a rising trend, to adopt an integrated Suite approach to managing Core HR, Talent Management including Compensation, Recruitment, Performance and Goals Management etc. While doing so, companies are also eager to try new deployment models such a Full Cloud ( SaaS) , Hybrid Deployment Scenarios in accordance with their cost reduction goals and maturity of HR processes.


Addressing the changing trends and the increased need for an integrated Suite of HCM Cloud Solutions, I want to introduce the portfolio of SAP Best Practices for Human Capital Management that helps deploy Cloud Solutions from SuccessFactors for People (Human Capital Management) in an accelerated and value adding fashion. More specifically and related to the topic of “Compensation Management”, through this blog, I would like to introduce SAP’s Best Practices Package for Success Factors Compensation Management.


What is this package about?

SAP Best Practices for SuccessFactors Compensation helps implement the SuccessFactors Compensation Solution in the cloud and integrate the same with On Premise SAP ERP HCM. It enables you to implement quickly and easily end-to-end compensation management processes in a Hybrid HR environment.


In simpler terms…

Essentially, users of this solution now are empowered to perform compensation planning using a nimble cloud based solution for compensation management. Without disrupting the core HR functions, that are running on the On- Premise HCM solution, users can leverage their employee, organizational and salary data from their core HR system, for the purpose of planning.


What business scenarios are offered in this package?

End-to-end compensation management processes – covering

a) Compensation planning in SuccessFactors with different components of pay including merit, adjustments, promotions, and lump sum.

b) Equity planning in SuccessFactors including stock, options and restricted stock units programs.

c) Both processes are using integrated employee, organizational and salary data until the activation of compensation decisions for future payroll runs in SAP ERP HCM.


What deployment scenario is supported by this package?

Hybrid Deployment (left) , wherein the core SAP HCM in On premise, along with SAP ERP and the Compensation Management Solution from SuccessFactors on Cloud.

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What are the benefits of using this package from a business process point of view?

  • Complete elimination of use of Excel spreadsheets to collect, consolidate and analyze Compensation plans from various team managers in any organization
  • Singular and consolidated view of compensation packages of all employees, to their managers and for the HR compensation analyst.
  • Paves the path for future integration to other SuccessFactors Talent Management module for the cloud such as “ Performance and Goals Management, Recruiting, Learning etc


What does the BP content (this package) cost the customer?

It’s free of charge! – We want to ease and accelerate our customer’s journey into the cloud and the SAP Best Practices content offered in this package provide an excellent starting point with basic “Compensation Management” scenarios already pre- deployed on the customer’s cloud image.


How exactly does this package help get to cloud faster?

You need not to start from scratch. Best Practices for compensation planning are already pre-configured in SuccessFactors Compensation. And all integration-relevant settings required in SuccessFactors Compensation, in SAP ERP HCM and in the middleware are described step by step thus accelerating the implementation.


Who could use this package?

All SAP ERP customers actively using SAP HCM, with core HR functionality of Personnel Administration and Organizational Management in  their “ On- Premise”  HCM system AND are planning to use SuccessFactor Compensation Management in the cloud – would find this package delivering rapid savings in time and effort.


Where to find more information on the package:

http://service.sap.com/bp-sfsf-comp

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