Compensation Technology Doesn’t Have to be Complicated!

Compensation practices vary based on a company’s size and industry. However, one rule remains the same when switching compensation technology platforms or considering a revamp to your organization’s compensation strategy.

Keep it simple.

Compensation administrators and HR professionals carry a heavy weight on their shoulders of designing, administering, and rolling out a compensation platform that empowers users to make meaningful compensation recommendations for their employees. While the budget factors, eligibility criteria, and calculations are complex and ever-changing, it’s critical that your compensation technology solution remains straightforward and user-friendly to ensure user adoption.

Here are some ideas to consider when designing, executing, and elevating your compensation strategy.

Plan for the masses

With any talent management process, your organization is bound to have exceptions. It may be that a particular business unit is scheduled to receive incentives at a completely different time of year, or perhaps employees on special assignments have merit increases that fall outside of the guidelines for the rest of the company. However, when it comes to the standard business rules managed by your software vendor, don’t let those extraordinary cases hold up your roll-out. Instead, define compensation plans that are applicable to the largest groups of employees and establish workarounds for the exceptions that can be accounted for with a well-defined, repeatable process outside of the application.

Pro tip: When in doubt, use the 80/20 rule.

Keep the user interface (UI) clean and straightforward

When you think about the UI and the data you plan to present to users, less is more. While it’s true that a lot of critical information is required to make accurate compensation recommendations, keep in mind this data does not all have to show up in the same place. All too often we see clients make the mistake of including too many data points on the screen to squeeze the most out of their real estate. Though intended to be helpful, it overwhelms end-users, resulting in a poor user experience. Consider instead using easily-accessible complementary reports to provide that extra “nice to have” information without detracting from the user experience.

Pro tip: Solutions like Cornerstone OnDemand or SuccessFactors offer these exports as part of their standard functionality.

Explain the data

Remember that your end-users are often not compensation experts. They are traditionally supervisors or managers with “day jobs,” and the compensation process is something they only think about when they absolutely must – typically, once or twice annually. Providing managers with the key data points sometimes isn’t enough. Consider educating compensation decision-makers by offering supplemental resources and training material containing definitions and context around things like compa-ratio and position in range. Ultimately, it will encourage user adoption and empower planners to make sound compensation decisions for their teams with confidence.

Focus on equitable pay

Now more than ever, pay equity is vital when it comes to employee retention. With many businesses focused on reducing turnover rates, ensuring equitable pay is a powerful way to retain top talent. Although each company is at a different level of maturity when it comes to their compensation strategy, it is never too early to consider including this type of information in your application. Providing transparent and accurate data of where employees fall relative to the market empowers compensation planners to adjust pay accordingly. Feeling confident that employees are rewarded fairly is one step managers can take to tackle concerns around employee turnover.

Start a campaign

Change can be scary! Some users may feel overwhelmed and will benefit from reassurance or encouragement to adopt the new process. Using a campaign to brand and identify the transition as a great way to spread the word. Consider posting a branded message on your homepage to showcase the advantages of moving to a new technology or create training to introduce your revamped compensation strategy. Whatever your approach is, share your campaign widely and encourage leaders to discuss during management meetings or organization-wide town hall sessions. Change is good, and a campaign supported by leaders is a great way to gain interest early in the process

Ask for feedback

Compensation administration is not easy, and there is always room for tweaks along the way. Thankfully, compensation processes are cyclical, and feedback from one year can easily be incorporated into the next. At the end of each compensation cycle, collect formal and informal feedback from administrators, end-users, approvers, and business leaders. Consider including new data points or creating more robust reports to assist in the process. Taking the time to listen to your users and making minor adjustments along the way is a guaranteed way to ensure continued user satisfaction and gain efficiency with your process.

Remember, your compensation process is critical to properly recognize and reward your employees. Proving a clear approach, sound strategy, and simple tool will empower your decision makers and ensure the successful execution of your compensation strategy.

Related Content