Success Factors Compensation Armando Ortega Senior Manager Product

Success. Factors Compensation Armando Ortega Senior Manager, Product Marketing

3100+ Customers 185 Countries 60+ Industries 35 Languages Enabling Customer Success Around the World Since 2001 8+ Million Users

Challenges of Compensation Management More Complexity • Merit pay • Lump sum adjustments • Bonus Pay Less Satisfaction Executive 65% of Executives think that performance is linked to compensation at their company, but only 38% of employees agree • Stock Awards • Focal salary planning • Off-cycle Adjustments Employee As many as 57% of employees don’t understand how their pay is determined • Global Currency • Compliance Since early 90’s the usage of variable pay in the US has almost doubled to 80% of all companies Source: U. S. Department of Labor Bureau of Labor Statistics Manager Only 29% of employees say that when they do a good job, their performance is rewarded Source: Watson Wyatt Work, Mercer US compensation practice

Success. Factors Compensation Management Overview Create a high performance culture Through pay-for-performance, signal your commitment to high performance, reward top performers that increases engagement and retention All Pay Components Optimize your budget and maintain compliance Save time and cost, and eliminate errors 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 an easy-to-use automated system, comp administrators and managers save time and costs as well as reducing errors Best-in-class Compensation Management Solution Compliance Planning and Pay for Analysis Performance ü Salary ü Bonus ü Stock ü Promotions ü Global Currency ü Complex calculations ü On individual goals and performance ü Incentive pay on various division and company metrics ü Secure environment ü Compensation audit trail ü Budget overage rules and alerts ü Executive and Manager Dashboards ü Support what-if scenario planning ü Benchmarking Easy to use | Integrated Talent Management Suite | Self - Service

Benefits at Every Level üCreate a high performance culture üMaintain greater plan compliance, plus reduced budget risk üBetter return on workforce investment, an organization’s costliest asset Executives üIncreased retention of top performers üBetter compensation decision making with suggestions based upon actual performance and budget data Managers ü Greater ability to drive productivity with performance-based rewards üIncreased engagement and motivation in a pay-for-performance culture üMore influence over and understanding of total compensation package Employee üSeamlessly handle complex compensation rules üSave time through powerful and easy to use admin interface Admin üAvoid calculation errors and ensure privacy through calculation engine and secure environment

Compensation as part of Success. Factors Integrated Suite is the Most Powerful Solution Success. Factors 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 Insights from Suite drive Powerful Compensation Insights 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

Integrated Pay for Performance Process Calibration View ALL Performance and Compensation data in Calibration module Make adjustments in Calibration module; write them back in source forms Performance Management Compensation Management 7

Success. Factors Compensation Management - Salary Administrator can easily define eligibility rules for which employees can Managers Compensation Managers Merit Managers increases can cancan view Administrator view are see their auto-calculated detailed additional allocated employee can performance details easily budget information based set ofset their review on the byperformance merit employees in the information a single administrator, guidelines place through rating, through and and which tight limits make tight are receive a promotion, merit increase, lump sum pay components Managers Multi-currency can promote support eligible to manage employees andand further inother different adjust countries their salary integration informed integration alerted with for managers Goal manager ifmerit budget with and increase Employee Performance can adjustments is adjust exceeded decisions Profile Management such as bonus and stock

Success. Factors Compensation Management - Bonus Corporate Administrator payout can automatically easily define calculated incentive based pay rules on company for the company and division-level or specific Incentive pay based on individual as well as corporate goal and performance metrics division

Success. Factors Compensation Management - Stock Managers can also easily allocate stock and options based on administrator-set guidelines and limits

Fully integrated with Success. Factors Calibration Pay for performance

Success. Factors Compensation Customers are seeing 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 10 X return on Success. Factors investment In one year Increase engagement and reduce turnover especially for high performers Shift performance to right through performance discrepancy and pay for performance

Case Study - Vail Resorts Pay for performance and variable pay calculated based on unique needs of each division 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. Success. Factors 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 Results Time savings and Error free– no more spreadsheets, better approval workflow and in-built analytics High Performance Distribution. . And pay tied to it.

Successful Compensation Management Customers “Success. Factors 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 “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 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

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