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SuccessFactors Makes Complex Compensation Programs Easy and Effective with New Variable Pay Solution

New Capabilities in On-Demand Performance and Talent Management Application Suite Help Obtain Measurable Business Productivity Benefits from Performance-Based Pay

SAN MATEO, Calif. - February 7, 2007 - SuccessFactors, the global leader in on-demand performance and talent management solutions today announced new variable pay capabilities, available immediately, that reduce the complexity of managing compensation programs and enable companies to more effectively and equitably reward performance. The new variable pay capabilities move human resource organizations' focus away from the complex, administrative side of implementing flexible pay structures and enables a more strategic focus on driving high performance and business results throughout all levels within an organization.

Organizations are increasingly adopting variable pay programs to reward, motivate and retain their talent. According to recent research from Hewitt & Associates, more than 80 percent of U.S employers (out of 1,028 large organizations surveyed) currently offer at least one type of broad-based variable pay plan, compared with 51 percent in 1991. Actual company spending on variable pay as a percentage of payrolls increased to 11.2 percent in 2006, in recognition of the benefits of paying for performance rather than relying as heavily on traditional annual "merit" increases. However, as these programs grow in complexity and demand, correctly administering the programs and applying variables such as company or department performance to total compensation, becomes a daunting, difficult task.

Part of SuccessFactors performance and talent management application suite, SuccessFactors Variable Pay facilitates the administration of multi-level pay programs that incorporate both quantitative business performance and employee performance when determining compensation. The new capabilities are made possible by SuccessFactors' focus on putting Performance Management at the center of its solution. Once a company has detailed visibility into performance, it can easily incorporate this performance management data into other talent management areas, including compensation and variable pay programs.

SuccessFactors' variable pay capabilities enable the easy administration of complex, variable pay program elements and results in customers being able to:

• Manage multiple bonus plans with weighted business goals
• Compare business goal results against targets to determine payouts
• Forecast payouts with "what-if" scenarios.
• Integrate employee performance into a compensation calculation.
• Define and manage employee eligibility for bonus plans
• Prorate and determine bonuses for employees who switch between 2 or more plans or are eligible for multiple bonus programs.

"Compensating employees based on a combination of individual and company performance is one of the most powerful tools that businesses can use to increase productivity and inspire the workforce, yet many companies are hampered by the challenges of implementing an equitable and accurate system," stated Randy Reynolds, senior director, product management at SuccessFactors. "SuccessFactors' new variable pay capabilities provide a foundation for organizations of all sizes to foster a true meritocracy that motivates employees and replaces command and control management styles with a positive pay-for-performance environment that takes both individual and company performance into account in every compensation decision."

About SuccessFactors
SuccessFactors delivers performance and talent excellence, on demand. The company's software promotes visibility, accountability, and results, enabling organizations to eliminate the politics that destroy motivation and impede performance. Fueled by the industry's highest renewal rate, SuccessFactors has grown in the past 13 months from 346 customers to over 1,200 customers and from 1 million users to over 2 million users in 156 countries, across 60 industries, and in 18 languages - all while becoming easier to use. During that period, the company nearly doubled its employee base, currently employing over 450 people, passionate about effective human capital management. Carefully managed and executed internal growth has allowed the company to provide the same caliber of absolute excellence in execution for customers that catapulted SuccessFactors into the product, customer and revenue leader in the performance and talent management space. Customers include Kimberly-Clark Corporation, MasterCard Worldwide, T. Rowe Price, Textron, Sutter Healthcare, Direct Energy, Arrow Electronics, Quintiles Transnational, Volkswagen of North America, Lancaster General Hospital and Salesforce.com. The company continues to execute at a level of global excellence by providing an industry-leading, scalable and secure global hosting operation. Founded in 2001, SuccessFactors has 15 worldwide offices collaborating for strong local support of customers. For more information, visit http://www.successfactors.com/.