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Variable Pay-Payout curves-Interpolation

rkumar1947
Explorer
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269

Hi Experts

Looking to seek your advice on achieving the following:

  • Bonus Payout percentage against Business achievement % (using Interpolation function)

There are four scenarios that we are looking at where Bonus Payout % will be dependent on Business Achievement % with or without the Performance Min (Threshold) or Performance Max(Stretch).

Attached documents captures these scenarios.

Q1- Would like to understand if these scenarios are supported by SuccessFactors Variable Pay using Interpolation function without using Performance Min and Performance Max and using Performance Target Low and Performance Target High only?

Q2-Should we be looking at Enabling Flexible Payout Curves to achieve these scenarios?  If yes, then how should be using the column “Performance_Step” in the Flexible Payout curves import file to ensure that “Interpolation” function works for us. SAP Help document mentions that this column can be used to set up Payout curves with an unlimited number of “Interpolation” points. It is not clear how entering various points in "Performance_Step" will result in "Interpolation" for any value that falls between two points.

rkumar1947_0-1736848595113.png

rkumar1947_1-1736848595115.png

Q3- As the Payout percentage corresponds to Business Achievement %, how do we store Business Achievement %? Should it to stored as a simple number as a point in the Interpolation function or it needs to be stored in a different way.

Many thanks

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xavierlegarrec
Product and Topic Expert
Product and Topic Expert
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Hi @rkumar1947 

Good news, you don't need Flexible Payout Curves !

Please see below: 

Scenario3.jpgScenario2.jpgScenario1.jpgScenario4.jpg

rkumar1947
Explorer
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@xavierlegarrec-Thanks very much. I did some calculations and it does seem to me that Scenario-3 result is not correct by interpolation. The expected result of 80% payout at 80% Business achievement is not possible. The online interpolation calculator gives the output as 60.23%. X1=79.9, X2=80,X3=120,Y1=0.6,Y3=1.6 gives Y2=0.6023. The other scenarios look fine.

Separately on Flexible Payout Curves, are you able to confirm that only STEP method is possible using Flexible Payout curve and Not INTERPOLATION method?

xavierlegarrec
Product and Topic Expert
Product and Topic Expert
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@rkumar1947 Yes, Flexible Payout Curves does support Interpolation. I haven't had time to document it but it's not really complicated, you just take the points from business goal Min/Low/Default/High/Max and add them to separate lines in the Flexible Payout Curve file. So for example for scenario 4:

xavierlegarrec_0-1737319497840.png

You can add an unlimited number of lines/points for each goals (vs 5 in Admin Center UI). But at the end of the day it doesn't change anything to the logic applied to the calculation which the one explained in the blog.

All the best

Xavier