This blog is co-authored by Gobinder Sandhu (https://people.sap.com/gobi.sandhu), experienced SAP HCM/Payroll consultant, and Stéphanie Bourgault-Mongeau (https://people.sap.com/stephanie.bourgault), experienced SF EC Consultant.
As covered in our blog on Pay Scale Structures in Employee Central ( Understanding SuccessFactors Pay Scale Structure and its related features), employees under collective bargaining agreements or hourly employees can be compensated based on a pre-define pay structure following specific rates of remuneration. Typically, these employees will get their compensation rate increased based on their company, job and/or union defined seniority and this would all be defined in the collective bargaining agreements.
In our Pay Scale Structure blog, we have describe how to default employees pay component amount based on their pay scale level in SuccessFactors Employee Central. This implicated a manual intervention by a user in each eligible employee’s Job Information portlet to update the employee’s Pay Scale Level on the right effective date. It is useful in the sense that the system automatically adjust the compensation hence eliminating data entry of the compensation.
So what is pay scale reclassification anyways?
Also termed as ‘Step increase’ process in certain organisations, the pay scale reclassification process points towards change in the pay scale group/ level assigned to an employee affecting the revision (upward) of the base pay / rate. The criteria for level change is defined as per company policy or the collective agreements.
Pay Scale reclassification in SAP ECC system
In SAP system we are aware that the functionality of pay scale reclassification is quite robust and fairly automated. The standard program -RPIPSR00 addresses most of the requirements such as the reclassification based on next increase date or key date or the time spent on particular pay scale group and level or total time worked in specific pay structure or even age of an employee. All this can be performed in SAP without manual intervention by scheduling the program in background.
Challenge for the SuccessFactors employee central consultants is to meet similar expectations seamlessly and at times without the manual intervention.
Pay Scale reclassification in Employee Central
At the time of writing this blog, Employee Central does not provide the mechanism to carry out the reclassification as automated as it is done in SAP ECC ERP system. One of the way is to manually monitor the eligibility of each of the employee (using reports) and run an event on the effective date to update the job information portlet. Business rule can be leveraged to automatically update the compensation information with the adjusted base pay /rate. The process thus requires to continuously monitor and manually reclassify the pay scale structure for the eligible employees. Not so very practical for large organizations with thousands of employees where numerous step rate increases may occur every day.
Proposed Automation of Pay scale reclassification in Employee Central
To automate the pay scale reclassification in SuccessFactors Employee Central, we are proposing to use two of the Employee Central features:
- Off Event Batch Cycle (OEB)
- Tariff Change.
The steps to configure this proposed solution for pay scale reclassification in Employee Central are
- Setup pay scale structure with duration field
- Set up and schedule the Off Event Batch Cycle to update Pay Scale Level on eligibility date
- Use the Tariff Change before every Payroll run to adjust compensation based on new pay scale level
For the purpose of this article, let’s give ourselves the following use case: At company XYZ., there is a predefined duration for each pay scale level. After completing the pay scale level duration employees go up to the next pay scale level as defined in the company pay scale structure and their compensation (Base rate / Salary) get adjusted accordingly. The requirement is that the system should automatically move the employee to next level and adjust the basic pay accordingly.
STEP 1: Set up Pay Scale Structure
We did cover Pay Scale Structure in detailed in the following blog entry: Understanding SuccessFactors Pay Scale Structure and its related features. Please check it out before reading further.
In our particular use case of company XYZ, each pay scale level has a defined duration. Duration is not part of the pay scale level object, hence we would need to add a duration custom field in the pay scale level object:
Also, this is optional but you might have to define more attributes on the employee job information. Here, we added an Eligible to Automatic Pay Scale Upgrade field so we can exclude employees from having their pay scale upgrade based on this flag value:
STEP 2: Set up and Schedule Off Event Batch Cycle to update employees Pay Scale Level on eligibility date
Off Event Batch Cycle is a useful feature in Employee Central that allow mass employee data update through a recurring background job. We will use Off Event Batch Cycle to identify and update the pay scale level of all the eligible employees who have completed their current pay scale duration.
Here is how the Off Event Batch Cycle object would be configured. We have used 12 months duration for the next increase in our screenshots, but you would have to set up an OEB object and rule for each duration at company XYZ.
After running the Off Event Batch Cycle background job, the system will update the employee pay scale level of all eligible employees to their next pay scale level using the Step Progression event reason in job information portlet. It will also update all the relevant Pay Scale dates accordingly. Here is the result on an employee’s Job History:
A system administrator should monitor the OEB job results frequently in monitor jobs:
STEP 3: Use the Tariff Change before every Payroll run to adjust the employees compensation
So far, we have update the employee’s pay scale level once they completed their duration but their compensation has not been updated yet. To update all these employees compensation, we will run the Tariff Change program. This program will identify all employees whose compensation do not match their pay scale level compensation and will update them accordingly.
Using the Step Progression Event reason, we would need to run the Tariff Change program before every pay period to adjust all employees’ compensation. Here how a run would look like:
After running the Tariff Change program, the compensation of the employees who had a pay scale level update during the OEB will be updated as well:
Note: Enabling in Company Settings and Logo the rules execution during Job Information and (GA) Termination import would also be an option to use. Enabling this feature would adjust the employee’s compensation during the OEB job and we wouldn’t have to run the Tariff Change program. However, this is not a feature we can set by rule and it would apply to all the rules. Since, there is multiple background job creating Job Info import (mass changes, terminating a manager with more than 100 direct reports, importing data, …) and there is only one rule (the rule that adjust the pay component when a pay scale level is changed) out of many that is to be triggered during the import, prefer not to Enable rules execution during Job Information and (GA) Termination import. Let’s hope that this feature will become a checkbox in business rule header that we could set by rule!
Pay scale reclassification is a mature feature of SAP ECC system and it is very powerful to adjust compensation for employee following pay scale structure. In this blog, an attempt is made to illustrate how we can replicate the similar logic in SuccessFactors Employee Central. Dare we not say that in Employee Central the proposed solution is as mature as in SAP on-premise system but it still is a useful functionality in its proposed form as tested, accepted and proven in one of the recent implementation we carried out. We had fun with the challenge.
We hope this was useful, thanks a lot for reading!