What is Compensation Management?

This FAQ covers implementation best practices, expert recommendations, and practical answers to get the most out of your SAP SuccessFactors Compensation solution.

Understanding the SAP SuccessFactors Compensation Module: What You Need to Know

Whether you are new to SAP SuccessFactors Compensation or a longtime customer, get your questions answered about Compensation Management in this FAQ.

1. What is SAP SuccessFactors Compensation?

Compensation management involves managing and determining the salary, incentives, and benefits for every employee in your organization. SAP SuccessFactors Compensation helps you build and manage strategic compensation programs that align with the needs of your employees, your business, and your budget. The solution deals with the fixed salary paid to employees, typically known as the annual salary review, and simple one-time lump sums. Read more about the SAP SuccessFactors Compensation module.

2. What are the benefits of the SAP SuccessFactors Compensation Module?

SAP SuccessFactors Compensation helps you align your compensation programs with your business strategy. With well-planned SAP SuccessFactors compensation management that motivates and engages your employees, you can increase employee retention while reducing recruitment costs. By automating and simplifying employee compensation planning, the solution empowers your organization to make informed decisions about employee pay, ensure performance-based pay, and centralize your employee compensation management.

3. What is the difference between Compensation and Variable Pay in SAP SuccessFactors?

The Compensation Module and Variable Pay Module are both part of the SAP SuccessFactors Compensation Management package. The Compensation Module helps your organization manage its salary review process and award stock (Long Term Incentives). Variable Pay is designed for handling variable pay bonus programs (Short-Term Incentives).In summary, SAP SuccessFactors Compensation focuses on salary and SAP SuccessFactors Variable Pay focuses on bonuses.

4. Is it possible to copy a Compensation statement from Development to Production instance in SAP SuccessFactors Compensation?

It is possible to export and import Compensation statements in SAP SuccessFactors Compensation. However, the edit feature is not available if you use a standard statement. So, if your company is running standard statements in its Compensation solution and you need to edit a statement, you must manually create it in your Production instance.

5. How do I synchronize a Compensation template and lookup tables, route map, etc., from Development to Production in SAP SuccessFactors?

Unfortunately, synchronizing from Development to Production in SAP SuccessFactors Compensation is still a manual process. It is possible to import a Compensation template, but various configuration pieces are not hardcoded in the template. This can include items such as route maps and lookup tables. In your SAP SuccessFactors Compensation Module, the feature instance sync allows you to move business rules and field-based permission groups. However, from our experience, it requires more time and effort than simple, manual hand-carrying of the configuration from Development to Production.

6. Does the Compensation Module use the same currency conversion table as SAP SuccessFactors Employee Central?

No. The Currency Exchange Rates in SAP SuccessFactors Employee Central are effective date Metadata Framework (MDF) objects, whereas the Currency Conversion Table in SAP SuccessFactors Compensation behaves as a lookup table. To solve this issue, load both the Currency Exchange Rates and the Currency Conversion Table with equal values.

7. How do I create a Report Story on SAP SuccessFactors Compensation Module data?

The starting point for creating an SAP SuccessFactors Report Story on your Compensation Module data is accessing the salary review template. In the template, you can join the route map for individual entries in the salary form. You can create and report on multiple metrics in Report Story, such as the number of employees, eligibility, route form steps, forms per step, and budget spending. With solid data and insights from the SAP SuccessFactors Compensation Module, you can use Report Story insights to deliver comprehensive data on compensation management to empower decision-making across your organization.

8. Is Effective People preparing reports to use for the New EU directive on Pay Transparency coming in 2026?

Yes. Effective People currently has two Compensation Report Story templates. There is a Compensation Planning Report Story template that is based on SAP SuccessFactors Compensation Module data and a Compensation Insights Report Story template based on data from the Employee Central Module. Effective People is already supporting several companies to deploy and adapt Compensation reports to ensure compliance with the new EU directive on Pay transparency.

9. How do we remove access to Executive Review in SAP SuccessFactors Compensation?

View and Edit in Compensation Executive Review permissions are just like any other SAP SuccessFactors system permissions. To remove the permission, you need to identify the permission role that is granting the permission and remove it from the list of permissions granted in SAP SuccessFactors.

10. Is it possible to have two different compa-ratio calculations, one from the Employee Central Module and another from Compensation? Does Effective People provide written instructions for this custom process?

Yes, your Compensation Module can store compensation-specific salary pay matrices (a table containing all salary ranges). This allows your organization to have separate compa-ratios calculated in SAP SuccessFactors Compensation. However, if you require two different compa-ratio calculations where one is calculated in Employee Central and another one is specific to your compensation process, you must use a custom approach to the second compa-ratio based on a lookup table in SAP SuccessFactors.

11. In Compensation plans in SAP SuccessFactors, group totals can be calculated as the sum of all values in a column, or as the annualized sum of values. Is it possible to switch from one to the other, and how?

No. It is not possible to change the view between annual and monthly in the calculate total setting in SAP SuccessFactors Compensation plans, as that column will always show the sum of each value. This means that if the values on the column are annual, the total row will also be an annual amount.

12. It is possible to include an ineligible employee who otherwise would be excluded from a review i.e., "greyed out" due to the start date. Do I need to include them?

No, you do not need to include ineligible employees in SAP SuccessFactors Compensation. The compensation eligibility engine allows full exclusion of employees. We can, however, have specific reasons to include ineligible employees, such as budget processes. Additionally, through the business rule criteria in SAP SuccessFactors, you can specify an exception scenario to include an employee who otherwise would be excluded. For more guidance, please contact us—we are happy to help.

Erik Ebert

About the author

Erik Ebert is a Senior Director at Effective People and heads up the Compensation & Benefits team.

With over 20 years of experience in the tech industry, he has supported organizations across industries, implementing digital transformation strategies to improve performance. Erik holds 7 SAP SuccessFactors professional certificates and also serves as an SAP SuccessFactors Confidant, advising the SAP HR cloud team on market development and innovation.

Erik has a vast knowledge of analytics and HR, including Core HR, Competency Management, Talent Management, Compensation, Bonus Programmes, Recruitment and Workforce Analytics.

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Motivate your workforce with well-planned compensation management. Contact us to learn more about how we can help build strategic compensation programs for your organization.

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