SuccessFactors CompensationArmando OrtegaSenior Manager, Product Marketing

Million Users+8

3100+Customers

185Countries

60+Industries

35Languages

Enabling Customer Success Around the World Since 2001

Challenges of Compensation Management

Source: U.S. Department of Labor Bureau of Labor Statistics

Since early 90’s the usage of variable pay in the US has almost doubled to 80% of all companies

More Complexity

•Merit pay

•Lump sum adjustments

•Bonus Pay

•Stock Awards

•Focal salary planning

•Off-cycle Adjustments

•Global Currency

•Compliance

Executive65% of Executives think that performance is linked to compensation at their company, but only 38% of employees agree

EmployeeAs many as 57% of employees don’t understand how their pay is determined

ManagerOnly 29% of employees say that when they do a good job, their performance is rewarded

Source: Watson Wyatt Work, Mercer US compensation practice

Less Satisfaction

SuccessFactors Compensation Management Overview

Optimize your budget and maintain compliance

Determine compensation based on objective performance metrics, ensure

managers stay within their budgets, stop overpaying low performers and defend

your compensation strategy with objective data

Through pay-for-performance, signal your commitment to high performance, reward top performers that increases engagement

and retention

Save time and cost, and

eliminate errors

Through an easy-to-use automated system, comp administrators and

managers save time and costs as well as reducing errors

Create a high performance culture

Compliance

Secure environment Compensation audit

trail Budget overage rules

and alerts

Planning and Analysis Executive and

Manager Dashboards Support what-if

scenario planning Benchmarking

All Pay Components Salary Bonus Stock Promotions Global Currency Complex calculations

Pay for Performance

On individual goals and performance

Incentive pay on various division and company metrics

Best-in-class Compensation Management Solution

Easy to use | Integrated Talent Management Suite | Self - Service

Create a high performance culture

Maintain greater plan compliance, plus reduced budget risk

Better return on workforce investment, an organization’s costliest asset

Increased retention of top performers

Benefits at Every Level

Executives

Managers

Admin

Employee

Better compensation decision making with suggestions based upon actual performance and budget data

Greater ability to drive productivity with performance-based rewards

Seamlessly handle complex compensation rules

Save time through powerful and easy to use admin interface

Avoid calculation errors and ensure privacy through calculation engine and secure environment

Increased engagement and motivation in a pay-for-performance culture

More influence over and understanding of total compensation package

Compensation as part of SuccessFactors Integrated Suite is the Most Powerful Solution

Insights from Suite drive Powerful CompensationInsights based on

• Overall performance ratings by managers and peers

• Performance on specific goals and competencies most important to organization

• How critical the position or role is to organization

• Industry benchmarks and similar roles in organization

Extend the value of your investment in goal and performance by optimizing employee compensation

SuccessFactors has Strongest Integrated Talent Management Suite• 3100+ customers, majority have multiple modules

including goal and performance

• Positioned in Leaders Quadrant for the Gartner’s Magic Quadrant for EPM Software

• Single code-base organically built resulting in tight integration and consistent user experience

Integrated Pay for Performance Process

Performance Management Compensation Management

Calibration

View ALL Performance and Compensation data in

Calibration module

Make adjustments in Calibration module; write them back in

source forms

7

Managers can see additional details of their employees through tight integration with Employee Profile

Merit increases are auto-calculated based on performance rating, which managers can adjust

Administrator can easily define eligibility rules for which employees can receive a promotion, merit increase, lump sum and other pay components

such as bonus and stock

Compensation Administrator can easily set the merit guidelines and limits for manager adjustments

Managers can view their allocated budget set by the administrator, and are alerted if budget is exceeded

Managers can promote eligible employees and further adjust their salary Multi-currency support to manage employees in different countriesManagers can view their employee information in a single place and make

informed merit increase decisionsManagers can view detailed performance review information through tight

integration with Goal and Performance Management

SuccessFactors Compensation Management - Salary

Incentive pay based on individual as well as corporate goal and performance metricsCorporate payout automatically calculated based on company and division-level metrics

Administrator can easily define incentive pay rules for the company or specific division

SuccessFactors Compensation Management - Bonus

SuccessFactors Compensation Management - Stock

Managers can also easily allocate stock and options based on administrator-set guidelines and limits

Fully integrated with SuccessFactors Calibration

Pay for performance

SuccessFactors Compensation Customers are seeing Business Impact

Business Impact Study by Top 3 Management Consulting Firm (n=520)

Business Impact Average Compensation Customers

Productivity improvement 2.9% 3.68%

Faster communication of strategy change 1 week 1.5 weeks

Increased time spent on strategic priorities 5.5% 5.65%

Increase in high performers 4.9% 11%

Decrease in low performers 13.9% 16.5%

Decrease in turnover rate 8.9% 12.67%

Business Impact

Add 1% of revenue to the bottom line

Earn 10X return on SuccessFactors investment In one year

Increase engagement and reduce turnover especially for high performersShift performance to right through performance discrepancy and pay for performance

Case Study - Vail Resorts

Results

Situation Vail Resorts has 3 division; mountain, lodging and real estate.

Each division had different pay component ratios for merit, bonus and stock

Each division tied pay to different performance metrics. For example, for the real estate division tied performance to property units sold whereas mountain division tied to customer satisfaction.

SuccessFactors Solution

Calculation engine seamlessly handled multiple complex compensation rules

Supported all pay components of merit, bonus and stock with flexibility to tailor for each division

Integration with Goal and Performance management allowed for automatic compensation calculations based on goal completion and performance reviews

Transparency- Empowered executive and managers to make real time decisions and check process status

Time savings and Error free– no more spreadsheets, better approval workflow and in-built analytics

High Performance Distribution .. And pay tied to it.

Pay for performance and variable pay calculated based on unique needs of each division

Successful Compensation Management Customers

This is an investment in your business so that you can properly manage goals, performance and tie that all into your compensation in a seamless, efficient, productive manner so that you can go about your business of growing your company, and that's really the most important thing that you need to be doing.

Dr. Jay Greenstein, CEO

“I am really happy with compensation. The linkage between performance and compensation is excellent. It has surpassed my expectations. This is really best in breed.”

Don Hopkins, VP and CIO

“SuccessFactors has been especially helpful with compensation. There was inconsistency in the way we paid people. Employees hired from outside were often paid differently than workers in same role who were promoted internally — a disparity that was more arbitrary than performance-based.”

Brian Reilly, CFO

Select Compensation Management Customers