Variable Compensation
How does Stratws calculate variable compensation?
See how Stratws automatically calculates variable compensation for several programs running at the same time in a single environment.
Variable compensation calculation is where most variable compensation programs struggle. According to the Panorama Nacional de Remuneração Variável 2026 (Brazil’s National Variable Compensation Overview), 83.5% of companies report medium or high effort to close the cycle.
On paper the rule looks simple. In practice, it runs into weights by level, payout bands, promotions in the middle of the cycle and the need to prove how each number was calculated.
When this process runs on spreadsheets, HR often spends more time on operations than on making decisions based on data.
This article explains, in practical terms, how Stratws, Siteware’s performance management software, calculates variable compensation from end to end.
Brazil Variable Compensation Overview
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How does the Profit Sharing and Variable Compensation solution of Stratws work?
The Profit Sharing and Variable Compensation solution of Stratws automatically calculates variable compensation (profit sharing, PPR, bonuses and so on) from corporate and individual goals registered in the software itself. The goals appear as interactive, dynamic panels, with a standard structure for every employee.
Before reaching the variable compensation amount, Stratws organizes the goals into blocks combined according to the weight of each one in the result:
- Corporate block: company-wide goals (for example, net income, EBITDA).
- Area block: goals for each department (marketing, sales, operations).
- Individual block: goals specific to each employee.
What sets it apart is the distribution of weights by hierarchical level, which reflects each person’s real influence on business results.
In addition, Stratws can calculate several variable compensation programs at the same time, such as annual profit sharing, operations bonuses and programs by hierarchical level, among other models.
Each employee follows the indicators, results and forecast of their variable compensation in the programs where they have a panel, which keeps governance in place without multiplying parallel spreadsheets.
How do indicators feed the variable compensation calculation in Stratws?
The indicators registered in Stratws make up what we call the Goal Library. In each period of the variable compensation program, you can pull this data from the system history and select which indicators will be used and tracked in the current cycle.
In operations with many individual panels, it is common to bring Human Resources administration rules into the system, turn them into indicators (such as absenteeism) and use integration to feed everything automatically, reducing the calculation effort outside the software.
How is variable compensation calculated in Stratws?
Stratws calculates variable compensation at two levels of granularity: by management unit and by employee (eligible person). The choice depends on the size and complexity of the company’s operation.
| Model | How the calculation works | When it fits |
|---|---|---|
| By management unit | The whole area sees and is calculated on the same panel of corporate and area goals. | Operations with a large number of people (for example, factory floor), where individualizing would be unfeasible. |
| By employee | Each person has their own panel, with an individual calculation based on the individual goals block. | When you want to connect individual goals to results and give each person a predictable view of their earnings. |
In practice, the by-employee model is the most used when the goal is to reach the level of each eligible person. The by-management-unit model streamlines management in more complex structures with a larger number of people.
In large companies, calculating by management unit is common. Grupo SBF, for example, is the largest sports ecosystem in Brazil and the holding company behind brands such as Centauro and Nike Fisia.
With operations at scale and goals spread across several areas, the group needed to bring strategic planning, budgeting and the variable compensation program into a single process.
With Stratws, the group began cascading goals by area and connecting more than 10,000 employees. See the Grupo SBF caseopens in a new tab.
Stratws can also calculate performance at different levels of precision (by target, by job title or by individual salary level), bringing transparency and visibility to each results panel.
Employees follow in real time whether they are on track to receive their payout, with the rules of the game clear from the start. This reduces questions and disputes and is a central part of the program’s governance.
Does Stratws ensure governance and data traceability?
Variable compensation has labor and union implications. Profit sharing, for example, is regulated by Law no. 10.101/2000opens in a new tab (in Portuguese). Stratws provides governance and legal support on two fronts:
- data change log: every adjustment to an indicator or result is traceable;
- periodic closing and a digital “snapshot”: closing and recording the panel at each period creates the documentary basis that protects both the company and the employee.
In addition, Siteware operates in compliance with SOC 2. This global data security standard confirms that our management software has security controls audited and validated against the AICPA standard.
Calculating fixed and variable compensation in Stratws combines blocks and weights by level, applies criteria transparently, handles the movement of people through separate periods, runs several programs in the same place and keeps a record and a means of closing the data.
Variable compensation calculation with clear rules and an audit trail
Blocks, weights by level and multiple variable compensation programs in the same environment.
Frequently asked questions
How is variable compensation calculated in Stratws?
The platform organizes goals into blocks (corporate, area and individual) with weights by hierarchical level, turns achievement into a score and converts the score into an amount by payout band. Triggers and deflators adjust the result to company conditions. The final number goes to HR for financial closing.
What is a target, or salary multiple, in variable compensation calculation?
Target is the number of salaries an employee can receive by meeting the defined goals. A target of 5, for example, equals five times the salary. It is more flexible than fixing an amount in reais, because it follows salary growth. Stratws calculates by target, by job title or by individual salary.
Does the calculation account for people promoted or hired mid-year?
Yes. Stratws works with separate periods within the same cycle, calculating the proportion of each phase. This way, hires, exits and promotions are handled fairly, without manual recalculation.
Can Stratws calculate several variable compensation programs at the same time?
Yes. You can run multiple programs (profit sharing, operations bonuses, programs by level and so on) in the same environment.
How does Stratws provide legal certainty and traceability to the calculation?
Through a change log, which tracks every adjustment to indicators and results, and periodic closing, which records a snapshot of the panel at each close. These records provide documentary support for labor and union discussions.
Does Stratws guarantee full security of the information and data recorded?
Stratws complies with LGPD, GDPR, CCPA and SOC 2, which ensures and proves data protection and traceability in external audits.
About the author
Equipe Siteware
Content produced and reviewed by the Siteware team, curated by internal experts in strategic management and corporate performance.