Leveraging the SuccessFactors Compensation Module to Automate the Progression Process for Hourly Employees

  • by Rinky Karthik, Project Manager, HCM SuccessFactors, People LoB for itelligence
  • February 18, 2015
Learn how to configure the SuccessFactors Compensation module to use it for a quarterly, monthly, or weekly progression process for hourly employees. Learn how to configure the standard SuccessFactors Compensation application (i.e., for the merit-pay process) to use it for the progression process of hourly employees. Gain instruction for designing compensation worksheets with formulas and drop-down options to help managers carry out progression-related changes.
Learning Objectives

Reading this article, you will learn how to:

  • Modify standard XML code and design worksheets available for merit pay, bonuses, and stock plans to cater to the hourly progression (or Job Step Progression) process
  • Define and design compensation plans, eligibility rules, and route maps, and look up tables to accommodate rules for an hourly progression cycle
  • Learn how to effectively use the compensation merit worksheet for the hourly progression process by creating lookup tables and formulas for custom fields in the compensation plan design in Admin Tools
Key Concept

The progression plan process (also known as job-step progression) for hourly employees is different from the annual merit plan process for salaried employees. The annual merit process typically happens once a year, whereas the progression plan process happens throughout the year, based on a company’s specific requirements.

The SuccessFactors Compensation module is designed for an annual merit process that includes merit pay, bonus, and stock awards, and currently does not have a module that addresses the needs of hourly employees. Unlike salaried employees who receive merit increases once a year, hourly employees’ performances are sometimes evaluated monthly, bi-weekly, or quarterly, and they are moved from one hourly rate to another in the pay scale structure. In this article I show how, with custom configuration, you can achieve this functionality.

Most manufacturing companies with an hourly workforce use a deliberate progression process to increase or decrease the hourly wages of these employees. This process, commonly referred to as job-step progression, is where hourly employees move from one step to another with a commensurate change in hourly wage. This progression process can be monthly, semi-monthly, weekly, bi-weekly, or quarterly depending on the payroll cycle for these employees. This means that a new worksheet needs to be launched monthly (or semi-monthly), weekly (or bi-weekly), or quarterly to evaluate and change the hourly employees’ pay rate.

The progression process can also differ based on the location or division within the same organization. It is a consistent process in organizations with hourly workforces, with which the compensation team designs different processes and compensation plans for hourly progression.

This article discusses different options to configure hourly progression in the SuccessFactors Compensation module, which can vary based on an organization’s process. The Pay for Performance tool is critical for helping companies achieve great financial results and reward the right candidates.

Note
This article focuses on the SuccessFactors Compensation module configuration based on Release 1408 with the new v12 worksheet.

The SuccessFactors Compensation module is concentrated around how companies allocate salary, bonus, stocks, and one-time, lump-sum disbursements. However, my focus is on the hourly progression cycle and how a company can build its progression processes into the SuccessFactors Compensation module plan template. In this article I give step-by-step instructions for how to effectively create an hourly progression compensation plan.

Rinky Karthik

Rinky Karthik serves as a Project Manager, HCM SuccessFactors, for the People LoB for itelligence and has 16 years of SAP HCM and SuccessFactors experience. This includes many global implementations, including support and upgrade of various SAP on-premise modules and SuccessFactors modules in diverse roles, like Solution Architect, Lead Consultant, and Project/Program Manager. Rinky has an MBA in Human Resources and she comes with a strong project management background; as such, she has managed a variety of global projects for clients in different domains. She has extensive experience with SAP SuccessFactors’ SAP Launch and SAP Activate implementation methodologies, and is a Certified SuccessFactors consultant in Recruitment Management, Recruiting Marketing, Learning Management Solution, and Employee Central. Rinky is a frequent contributor to SAP SuccessFactors blog forums, HR Expert, and a regular speaker at a variety of SAP/SuccessFactors conferences.

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