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compensation management

How to Be More Efficient With Your Compensation Spend

Did you know compensation spend is the largest business expense in 2021?

Paycor’s recent State of American Business Survey shows that employee compensation spend takes up nearly 70 percent of total business costs. Here, compensation spend covers something much more than merely monthly wages of employees. It is an overarching umbrella that covers everything from employee wages and total rewards to taxes and other value-added benefits that businesses offer their employees.

Despite being the largest expense of any business in the world, compensation spend seems to be the least managed or analysed expense due to its seemingly invisible nature. As a result, businesses ignore the hidden costs that lurk in compensation spend. However, increased cost to business is the least of the worries.

For, failure to analyse your compensation spend will bring about inability to link compensation with performance leading to pay disparity and ending with employee dissatisfaction at the lack of transparency in employee compensation and rewards process.

If all these instances strike fear in your heart, here are three invaluable tips for you to track, manage, and increase the efficiency of your compensation spend. 

1. Know your compensation spend 

The first step towards streamlining your compensation process is getting an accurate picture of your labor costs. Understanding how much you spend on your employees will help businesses identify employee compensation trends and pinpoint issues caused by mismanaged compensation spend. 

After making note of all your direct and indirect compensation spend, you can ask yourselves these questions to dig in deeper and draw meaningful insights:

  1. How competitive is your organization’s compensation spend?
  2. Are there instances of underutilization or overspend on labor?
  3. How do you equate compensation with employee performance?
  4. Does your existing compensation spend strategy ensure pay equity? 
  5. How does your compensation relate to overall rewards spend?
  6. Are your employees happy and satisfied with the existing process?
  7. How transparent is your compensation strategy?

2. Centralize your compensation spend data

Although centralizing your compensation spend may have its fair set of roadblocks, centralizing the data in a repository will ease the process of compensation audits. Automating the data collection process will ensure while sensitive compensation spend data is available for analysis, it isn’t visible to unauthorized people. 

Proper use of compensation spend automation will not only provide a unified view of compensation spend but also ensure accuracy and eliminate any chances of costly errors. What’s more, availability of compensation data across the business will enable functional and HR managers to make informed decisions that are backed by data.

3. Put Your Data to Work

By feeding your compensation spend data into an analytics interface, you can unveil insights that show whether or not your compensation strategy is fulfilling its intended goals. Making a practice of analysing your compensation spend will help you align your spend better with your overarching business goals. 

In addition to giving you warning signs, proper analysis of your compensation data can come in handy for determining fair pay, gauging employee satisfaction levels, assessing decision effectiveness, and thus contribute to effectively streamlining your compensation spend once and for all. 

Conclusion

If you’re serious about unlocking the efficiency of your compensation spend, you will have to ditch your manual compensation management process and delve deeper into existing compensation-related problems. 

Moving away from disconnected compensation spend and overflowing spreadsheets filled with sensitive compensation information will help you battle inefficiencies in your compensation strategy head first. An ideal compensation management tool will provide businesses a clear picture of their current compensation trends and prevent compensation-related risks irrespective of their size or line of business. 

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compensation management HRMS Solution

Data is the new oil and Compensation Analytics is the modern way of being smart with your business

Compensation professionals strive to ensure equity in pay and fair rewards depending on an employee’s contribution. Unlike Sales, Marketing, and Customer Support teams, they do not have the right solutions to increase employee satisfaction and retention.

Having a compensation analytics tool like Compport enables your HR department to hire and retain the top talent based on data. A solid process will make sure that you have high employee retention rates and productivity.

Let’s take a look at how analytics tools can help your HR team manage compensation structure across the organization.

There is no shortage of data in your organization. All the data in the world wouldn’t be useful if you don’t know how to use it. But, you have to identify two things before you choose an HR analytic software for your organization.

  • The data points which you’re going to tap in your organization
  • How you are going to measure it against other data points

Once you’re sure about your data points and the priority of a data point, you can select an HR Analytics for your organization.

There’s a reason why we are pressing on the importance of choosing the right data point. For example, here are some data points your HR department can track on a primary level:

  • Employee Classification
  • Roles and Capabilities
  • Impact of an Employee’s budget
  • Employee satisfaction
  • Staffing levels in the organization

It’s up to you to choose which of these metrics you want to prioritize and track with your compensation analytics software.

Benefits of choosing a compensation analytics software

Make logical decisions

Whenever an employee wants to leave an organization for better pay, your manager’s first move is to try and match their new salary. But might not always be the right option for your business.

What if you already have a better employee to fill his ranks? Wouldn’t it be less costly to just promote a junior employee to the place of the person leaving the organization?

A dedicated analytics software will help you judge your employees against each other when deciding for a raise or a promotion. With solid data, your manager will now decide to let go of this employee and instead promote the junior employee to his position.

Ensure pay equity

Pay equity is a major issue in large and medium-sized organizations. All employees want a fair pay that is irrespective of race, religion, gender, age, and tenure. Employees want to work in a place where the pay is decided upon their performance. Compensation analytics software provides you with data about pay scales for different employees across departments. You can use the software to drill down on various questions like:

  • Is there any ethnic group that’s being paid less?
  • Is there a difference in salary based on the Age of an employee?
  • Is there a pay scale difference between male and female employees?

You can answer all these questions from a single dashboard and identify any discrepancies in the system. When you see a repetitive discrepancy, you can talk with the manager or the administrator responsible for it. You can also set up systems and procedures to ensure pay equity across your organization.

Manage Compensation costs

Your analytics software must be connected to the different departments across your organization. It should always be fed with up to date data across departments.

Once you have a steady stream of data, you can identify if your compensation is actually increasing the profitability of your organization. The changes you make in compensation should have a direct impact on overall revenue for your organization. With this insight, you can identify key places where a higher compensation spend could be beneficial for your organization.  

In short, HR analytics allows you to do two things

  • Cut costs where it doesn’t add value
  • Add compensation to departments which raise your organization’s value

Bring transparency

An organization that is transparent about its goals and current state will cultivate a healthy culture. When you have a healthy culture, your retention rates improve.

Letting your employees know your compensation policies and their pay structure clearly is the highest form of transparency. Your employees can be sure that they will only be judged on their performance and not on any other external criteria. At the end of the day, when your decisions are fair in the eyes of your employees, they will definitely stay loyal to your goal and your brand.

Plan your workforce requirements with Compport

When you have data-driven insights about the performance of every individual employee, you tend to make better hiring decisions. You can analyze the places where you need more manpower in the future and hire accordingly.

If you feel about making a certain change in the business, you can take a look at your employees and understand how you can change their roles.

Here are three things you can do better with Compport

  • Design fact-based/data-backed model to attract and retain top talent
  • Make strategic decisions to address talent shortfalls in the future
  • Discover new talent that is underutilized in your organization

The right software will help your HR department make the right compensation decisions at the right time. You can help them navigate through tough salary negotiation moments with data-backed insights. It will not just dissolve your challenges with compensation, it will make your organization more efficient  in the longer run.

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compensation management HRMS Solution

Managing Employee Compensation Effortlessly with Technology at Every Level

Gone are the days of flat rate employee pay raises. Nowadays, a compensation decision includes an array of attributes ranging from market rate to peer parity and performance-pay matrix. What makes the existing compensation process more complex is that all compensation-related information is spread across disparate systems.

Employees often assume that all employee-related information is accessible, visible, structured, and accurate. With HR leaders battling fragmented data and inconsistent information to get a complete picture of components that contribute to compensation-related decisions, the compensation management process drags on for what feels like forever. 

Improved employee data management and technology adoption can do wonders to your compensation management process by improving employee engagement and reducing turnover. To stay ahead of the curve, organizations need to streamline the end-to-end compensation management process.

Here’s a breakdown of the positive impact technology can have on your compensation management lifecycle across a range of functionalities.

Six Stages of Compensation Management

The compensation management lifecycle starts when an employee decides to join the organization and goes on until the employee exits the organization. It is the common thread that leverages employee performance data as the foundation and glue to build a win-win employee-employer relationship. 

Ideally, compensation management consists of six stages that are listed below:

  1. Setting an overarching organizational strategy

Though it is not really a starting point for compensation management, determining which route your organization will take ensures that your compensation decisions align with your business goals.

  1. Crafting a standard compensation policy

Having a clear-cut compensation policy will eliminate any ambiguity in compensation decisions and simplify the calculation of  base pay, benefits and other important components while extending an offer to a promising candidate . 

  1. Performing analysis of available job roles

The research done during this stage comes in handy while HR managers draft job descriptions for an open position. The process will help determine the relative worth of a job and the compensation package aligned to it. 

  1. Evaluating contingent factors like cost of living

Ideally, a compensation plan must be formulated only after taking contingent factors both internal and external into consideration. While internal factors can be something akin to seniority, external factors can include anything ranging from labor laws to economic downturn and market value.

  1. Designing and implementing a compensation plan

Once the steps listed above are completed, you will have enough information to craft a compensation plan that aligns with your business goals and employee expectations.

  1. Evaluating and reviewing the existing process

Your compensation plan can never stay rigid as it is affected by an array of dynamic aspects like economic condition, cost of living, and more. So, rather than taking an once-and-done approach, businesses need to check whether or not their existing compensation practices leave a positive impact on end variables like employee productivity. 

The Role of Technology at Every Stage Of Compensation Management 

Ever-evolving employee expectations and economic conditions demand a complete revamp of traditional compensation management processes to avoid disengagement and turnover. A recent compensation Deloitte survey shows that most organizations are reinventing their compensation practices and making them more human-focused in nature. 

An automated compensation management tool will not only standardize the compensation process but will also cater to the unique compensation needs of an organization like taking a more human-centric approach without exposing itself to the risk of human errors and biases. A compensation management system will help businesses to:

  1. Inject pay transparency into their compensation lifecycle
  2. Enhance employee experience and trust
  3. Add credibility to the performance evaluation process
  4. Shorten the compensation management cycle
  5. Eliminate inherent compensation-related biases
  6. Improve stakeholder engagement and collaboration
  7. Enforce regulations and policies as and when required

The Only Way to Move Forward

Today, technology is an integral part of all HR practices including compensation management. HR leaders and functional management can gain the ability to do more with less by embracing compensation automation.

Automated compensation management process is more seamless and efficient. It improves employee relationships by enhancing engagement and transparency while lowering the chance for biases. With organizations across the world automating their compensation management process at a rapid pace, it is time to act or risk being left behind.

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compensation management

4 Questions to Ask When Evaluating Your Compensation Policy

Organizations want to hire the best employees to take care of their business. A successful business must always hire and retain top talent. In an effort to hire top talent, businesses always put up a firefight with competitors in terms of compensation.

But in today’s scenario, compensation doesn’t just involve good pay for your employee. You also need to offer them incentives and other work options if you need employees to stick within the organization.

Here are four questions you need to ask yourself to make the most out of your compensation budget. These questions will help you determine where you are going wrong and how you can improve on it.

1) Do you have a compensation policy in place?

You need to go into your hiring policies and check if you have a compensation policy in place. In general, 9 out of 10 companies have a compensation philosophy for their employees. But, a staggering 50 percentage of employees don’t understand this philosophy. This contributes to a lot of misunderstanding about how salary and other perks are calculated.

When confusion sets in, employees might feel that they are not rewarded for their contributions as expected. They might feel dejected and this can cause a lower morale in the workforce.

What can you do?

You can set up a solid compensation strategy that governs how the salary and other perks are paid. You should also create rules that determine how the compensation structure works in your organization.

Here are some examples:

  1. How will overtime requests be processed?
  2. Who will track the performance of every individual employee?
  3. How will each employee’s performance be measured?
  4. Who makes the decisions when it comes to altering compensation for each employee?

You can ask any number of questions but the goal is that you need to create a solid compensation policy and write it down.

2) Do you communicate your strategies with your employees?

Now that you have created a solid compensation strategy for your business, the next step is to let your employees know about it.

One of the biggest mistakes that organizations make is not educating managers and employees about their compensation strategies.  You need to let them know about your rules and regulations.

A very good compensation strategy must also include a communication plan that helps managers and employees understand it. Here are some tips to help you communicate your strategies to your employees.

  • Make a clear explanation of buzzwords like salary ranges, compa ratio and other jargons
  • How budgeting works in the organization
  • Who makes the final decisions on compensation structure
  • How the final decision for employee compensation is made?

In essence, it does not matter if you have a laid out compensation structure. You also need to educate your employees about how the structure works.

3) Do you give anything outside salary benefits?

Most of your employees work in your organization for more than just their salary. Some of them work in your organization for the perks that are offered, while some work for the flexible work hours.

While there is an inherent need to offer more salary, you can always think of creative ways to retain employees. Here are some ideas:

Offer them a flexible work placement

After COVID-19, most of the employees have been forced to work from home. This has caused a major shift in how employees work in organizations. 

Above salary most of them seek a flexible work arrangement, which allows them to work from the comfort of their house. You can offer your employees to work from their home whenever possible.

Offer paid leaves for vacations

If you have some employees who are fond of travel, you can offer paid leaves to help them go on vacations. This will help them maintain a healthy work-life balance in your organization.

Create team experiences

Team experiences is something organizations have been doing for a long time now. They hold events and competitions within individual departments. You can hold team games, sports meets and fancy dinners to create team experiences for your employees.

Give them opportunities to learn and develop

Employees always appreciate it when you are ready to invest in their education. Allow them to attend conferences, online events in the industry. You can also sponsor for their certification courses and incentivize them for it.

When you allow your employee to take time for their development, two things happen

  1. Your workforce become better at what they do and this translates to a better profit margin for your business.
  2. Your employees stick with you longer, because you are willing to help them with their continual education.

Even if an employee leaves you after learning, they will always appreciate the positive attitude of your organization. In short, it’s a win win either way.

4) Do you take industry benchmarks into consideration?

Comparing yourself with the competitors in your industry is a really good place to evaluate your compensation policy. 

Factors like roles, responsibilities, size of the company and geographical location must all be taken into consideration. These factors will help you, how compensation policies and structures work in your industry. After you have done benchmarking, you can move on to set the salary standards for your organization. 

If possible you can also conduct quarterly salary audits to understand how the compensation for each role in the market is changing. These audits will help you understand how you need to allocate your compensation to spend effectively.

With a tool like Compport, you’ll be able to analyze your compensation policy and make sure that it’s efficient and fair. Take Compport for a spin today.

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compensation management

Top 4 Compensation Decision Biases and How to Overcome Them With Technology

Compensation decisions involve an array of stakeholders and a ton of processes—from performance reviews to pay equity matrix and market value. The compensation management process doesn’t happen in a day.

Matching employee expectations with allocated quota while ensuring proper parity with peers is always a constant concern for HR leaders. What’s worse these problems just scratch the tip of the compensation bias iceberg. 

Compensation-related decisions are influenced by an array of elements ranging from socio-cultural cues to economic and legal dimensions. Amid the chaos, HR leaders don’t often find the time to notice the most common types of compensation biases. For the first step to tackling these biases is awareness.

Listed below are four types of compensation biases along with tactics you can use to ensure compensation decisions aren’t being guided by them.  

1. Gender bias

While no organization does this intentionally, even perceived gender pay gaps can cause a lot of damages ranging from disengagement to increased cynicism in the workforce. Although there are so many contributing factors to this bias, the major reason is lack of pay transparency.

Revealing a little or a lot about how much your workers are paid can help reduce the gender bias substantially. However, merely implementing pay transparency is completely useless if you have trouble tackling unconscious biases that fester among raters. 

When your compensation decisions are made with a logical automated approach that enforces gender pay guidelines and keeps unconscious biases away can remove gender bias from your compensation management process once and for all. 

2. Racial bias 

A recent PEW Social Trends report shows that racial wage gaps still persist in the US despite some progress. Without conscious efforts to eliminate racial bias, compensation decisions can end up heightening disparities that already harm the minority community.

Tackling a sensitive issue like this needs a ton of data, both market and industry specific pay scale information and internal pay parity matrix. While making skill set and performance the contributing factors to a compensation decision is critical, it is equally important to ensure that aspects like cultural and socio-economic aspects aren’t a part of the decision.

Today’s HR technological advances like Artificial Intelligence can use the historical performance data and compensation information to make intelligent proposals that predict how an organization should go about structuring their compensation structures in the future, so that it removes any unconscious racial gap in the compensation process.

3. Recency bias 

Recency bias is most common in HR environments that depend on outdated tools like paperwork and spreadsheets for performance appraisals. The human nature of being unable to recall every single aspect of an employee’s performance paves the way to this bias.

When a decision maker bases his/her compensation decision on the most recent performance of an employee, ignoring the entire picture, there is a high chance of missing employee progress, improvements, and other major performance indicators.

While moving from an annual review process to a more frequent review method like monthly or quarterly performance can reduce it to an extent, only moving to a completely automated environment will eliminate this bias altogether with aspects like complete employee appraisal trails, goal setting and alignment, feedback management, and more. 

4. Halo/Horns bias

It is human tendency to put people on a pedestal and offer a positive, preposterous review when you think highly of a person. And conversely, it is common to offer unfavorable reviews for people when you have a negative perception about them.

Irrespective of the fact whether it is positive or negative, it is just an inherent aspect of human nature to recall a person’s performance in a manner which aligns with our preconceived notions about that specific employee.

The best way to overcome this bias is injecting automation into your compensation management process. In an automated HR environment, it is easy to collect the perspective of multiple stakeholders ranging from managers to clients and peers. This process of collecting different perspectives on an employee’s performance can factor out halo/horn bias of the compensation equation. 

Face your compensation biases

As the expectations of your employees and the economy continue to evolve, new compensation challenges are on the rise. It is important to learn about the most common compensation biases in the compensation management process, so that organizations can put the right policies and procedures in place to tackle them. 

For additional help, check out our blog which features content for managers, HR experts, and senior leaders on how to streamline their compensation management process and keep them free from common pitfalls.

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Blogs Culture

5 (+1) Kick-ass Ideas to Make Your Employees Feel Appreciated

Employees are the most precious of all assets a company can have and very few organizations show care and concern and make their employees feel valued and appreciated.

While monetary compensation tends to be a top motivating factor, it’s not what all employees crave for. According to Forbes, one in three employees will quit if they feel unappreciated in their workplace. 

Employee appreciation should be an integral part of any organization’s culture. It’s an all-around attitude every manager in the company should possess. It raises morale, improves teamwork, and results in better service to your customers. When they feel more appreciated, it increases the chances of them sticking in your organization longer and they’ll always go the extra mile to do more than what’s expected of them.

So, how can you support your employees and make them feel appreciated? We have listed five ideas (plus a bonus idea) to make sure that your employees feel appreciated.

Add your employees to your company website

This may seem simple, but adding your employee’s name and photo on your website is a game-changer. It gives your employees a sense of belonging in your organization and makes them feel appreciated.

Add their pictures on your website and let them write their own bios. They will feel part of the team naturally.

Celebrate their birthdays and anniversaries

Take some time to celebrate your employees’ birthdays–your HR system will store the date of birth. You can also make this process easier by sending them automated emails. 

Find some time in everyone’s calendar and celebrate with cake. Getting them a personalized gift can also be a warm gesture to support employee appreciation. Your gift doesn’t need to be expensive, it just needs to be personalized to them.

Along with birthdays, it is also a great idea to celebrate yearly anniversaries of employees. This small move will make them feel appreciated for the time and efforts spent in the organization. 

Create a trophy system 

Trophies are something that can work like a charm in your workplace. You can get trophies for different teams and reward them to high performing team members. Set realistic KPIs and award the trophy to the person who achieves the most in that month.

This system works best when the method of awarding trophies follows a calculated and measurable approach. You need to make sure that your system is fair so that it doesn’t discriminate on any basis. Make sure everyone understands the rules of the game and the systems are transparent.

Give them the power of choice

You cannot build an honest appreciation system if your culture is not right. You need to give your employees the power of choice and a platform to voice out their opinions. You can ask the following questions to learn if you are building the right culture, where your employees enjoy working.

  • Do you listen to the ideas and opinions given by your staff members?
  • If yes, do you act on it or just plainly dismiss it?
  • Can employees choose the tasks that they want to do?
  • If yes, what is the percentage between tasks that are assigned to them and tasks that they choose to work on ?
  • Can your employees approach your management team to voice out their problems?
  • Do they take time to listen to their concerns or is it not heard upon?

Gift, trophies and awards are great ways to improve employee support and show them your appreciation. But if you don’t have the right foundational culture  to set it all up, you might as well not do it.

Allow your employees to point out the flaws and mistakes in your organization. Let them know that you are a team and you are all here to improve as one.

Encourage continuous education

The world is changing fast. The technology we use this year is becoming redundant and out of trend within the next year. Hundreds of startups spring up every year, while thousands of businesses are becoming redundant at the same time. 

You need to make sure that your employees are also well-suited to these changes in the business landscape. You can do it by allowing them to pursue different forms of education. Give them time off to attend networking sessions, online events, and educational events.

Whenever an employee upskills themselves, consider offering them a promotion or a raise in their salary. Your goals should always be to appreciate them for their willingness to learn. Show them that you always support learning and growth.

Show them that you care and they will help you build a better business and a healthy workplace.

Bonus Tip: Your appreciation doesn’t always need to be vocal

You will always have tons of people who will put their heart and soul into the organization. These are employees who make sure that all the work is done with perfection. These are the ones that go above and beyond what’s required of them to make sure the business succeeds.

Appreciate and acknowledge their efforts with small gestures. A simple “Thank You” and “Great Job” can mean a lot and make your employees feel supported and appreciated. 

Walk to their desk and let them know you appreciate them for their good work. Leave thank you notes on their desks to let them know that they’ve done a great job. Make a post in your official communication channels so that everyone in the company celebrates their coworkers.

When you have better support for your employees, they feel happy and tend to stick with your organization comparatively longer. And, when you have a solid strategy for your employees to be appreciated – you can build a better business.

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Benefits and Perks compensation management

5 Unique Perks and Benefits From Top Companies Across the World

According to a study by The Ladder, 30 percent of the current workforce would take less monetary compensation in exchange for better benefits and perks. As shocking as it might sound, with the Gen Z workforce starting to fill in major roles, the conventional ideologies of work, compensation, and loyalty continue to change. 

Employees value a better organizational culture rather than a fatter paycheck. Startups where their contributions are acknowledged and felt have one up over giants where your work might go unnoticed. With such a sudden shift in employee mindset, what can larger organizations do to stay relevant in the race and attract top talent?

We collected some of the most unique perks offered by top companies in the top of the game. Irrespective of the size of your organization, you can pick some of these and can keep your current employees happy and attract new ones.

Note: We won’t be covering the obvious perks like insurance, 401k plans, work from home, etc

Flexible work hours

According to this study, 70% of workers firmly believe flexible work hours makes a job more attractive. 

Official working hours (looking at you, 9-5 jobs) are a relic of the past. Netflix started the “no official working hours” policy in their California headquarters and stopped tracking vacation days and work time. They only measure what gets done; all that matters is that employees do what they are responsible for and not when or how they work.

This empowers employees to take ownership of their work and also focus on their personal life. After all, one affects the other. Also, enforcing strict work times is counter-productive. Employees spend more time looking at their watches rather than focusing on producing quality work.

Team outings

Another popular perk that’s been on the rise with the increase in number of companies going fully remote. Well, I’m not talking about a picnic in the park (those are great as well but you get what I mean…). Tech companies like Zapier and Process.st are fully remote companies with their workforce spread across the globe and several time zones. How do they build camaraderie among employees? Twice a year, they pick an exotic location and meet there. 

In an interview, the founder of the Digital Workplace Group–Paul Miller, said they get a house and spend a week together bonding on a personal level and not talking about work. Such outings and trips will bring employees closer and ultimately improve the team morale.

Pet-friendly workplace

Having fun with your four-legged friends can be a huge stress-buster. Take it a notch up and bringing them to your workplace can be an amazing way to keep the environment lighter and casual. 

Several companies like AirBnB, PetSmart, and Uber have caught on this trend and have built it into a successful model. Being pet-friendly has an underlying benefit of differentiating your brand from your competitors by projecting you as an extremly fun place to work. Plus, it also has a positive impact on the mental well-being of not just dog-owners but all employees. While safety concerns like pathogens and allergies are a challenge, it’s definitely something that companies of all sizes can consider.

Healthy living

Hosting service provided GoDaddy prides itself on their focus on health, fun, and building meaningful relationships outside of work. They offer extensive coaching programs on healthy living; their vending machines have healthy food options. 

They also offer a variety of services like flu shots, health flairs, and biometric screening. Their community service–GoDaddy Cares–is another thing their employees are proud of. They offer adoption assistance and tuition reimbursements to parents allowing them to focus more on their mental health.

In-house amenities

What blog about employee perks can be complete without mentioning Google? We were saving the best for the last. 

The tech giant has hit the bull’s eye when it comes to offering the best employee benefits and perhaps that’s why it’s rated one of the top companies with happiest employees.

Google offers plenty of in-house amenities like free food (including 30 different cuisines and multiple dietary options), on-site haircuts and massages, fully-equipped gyms, swimming pools, game rooms, and a 24×7 medical care facility.

These were some of the coolest perks that can not only make employees happy and satisfied but also serve as an excellent motivator for potential candidates. Perks and benefits are where you can be innovative as a C&B professional. There are several perks that you can administer without burning a hole in your bottom-line yet make your employees feel valued.

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Blogs compensation management HRMS Solution

5 Steps for Selecting the Right Compensation Tool for Your Business

Compensation management is a balancing act. HR leaders need to match their priorities such as employee compensation, performance bonuses, and operational budget against pressing issues like disparity, employee needs, economic fluctuations, and war for talent. 

In order to play the balancing act well, there is a dire need for meaningful insights and process transparency. This is precisely why HR leaders need to take the first step towards streamlining their compensation management process. 

However, you can’t jump start the search by diving head first into the sea of HR technology offerings. Even if you manage to narrow a few compensation tools based on your employee size and budgetary restrictions, it is still hard to pinpoint the best software. 

To select their first compensation management tool, small businesses need to determine their business requirements and identify the functionalities they need. Listed below are five steps that can set you up on the right path to find the best compensation tool for your small business.

1. Determine your goals

The first step is to understand what exactly you’re trying to achieve with a compensation management tool and assess whether or not these goals align with the overall objectives of your business. 

Once you’ve taken this step, you can move on to understand how you intend to use the compensation management tool. Do you plan to let all your employees’ access the tool or restrict it to just the HR team and finance department? Do you really want an exhaustive compensation system or can you make do with a light-weight compensation tool that keeps your data organized and secure?

By asking yourselves these questions you can kick start your search in the right direction and narrow down your search. 

2. Talk to your users 

Talking to the people who will be using the system can give you a better idea of the features it needs and the data points your tool must handle. Business owners need to have these conversations with both end-users like employees and power-users like HR leaders and the finance department.

These discussions will not only help businesses get a clear picture of specific requirements that a compensation tool needs but also offer insights on the level of training that needs to be provided before onboarding everyone onto the new tool. 

3. Zero in on features that you need

The third step is to gain in-depth insights of the features and functionalities you need in your compensation management system. When you take a look at the compensation software offerings in the market, you can find a range of tools from light-weight systems that offer basic functionalities to a feature-heavy offering that comes with SSO, workflow automation, and more. 

To find the right compensation tool, businesses need to understand which features offer real benefit and which are just a vanity offering. The key here is understanding the fact that even the most sophisticated and feature-rich compensation management tools are worthless is they are too complex to operate or if they are not suited for your day-to-day activities. 

4. Look for integration-friendly tools

The fourth and the most important aspect for any business software hunt is to check whether the tool of your choices plays well with your existing software stack. You need to see for yourself how well your shortlisted compensation management tool connects with all your existing software stack through API and built-in connectors. 

5. Assess its mobile-friendly nature

The digital life your employees lead demands that any and all business tools you make them use must have mobile offering for easy accessibility. This means that all your HR leaders, functional managers, and employees should be free to access their payslip and other compensation-related aspects anywhere, anytime. 

Bonus: Top 5 Compensation Management Tools in the Market

There are an array of compensation management tools available in the market today making the selection process challenging. To help you cut to the chase, we have compiled a list of compensation software that stand out from the crowd.

  1. Compport

Compport is an agile compensation management tool that is flexible to serve the simplest need for an SMB and powerful enough to meet the most complex compensation demands in an enterprise. It empowers businesses by incorporating cost efficiencies, productivity, and engagement in the compensation process. 

Compport accommodates nearly all the scenarios that help analyze compensation data for any organization. What’s more, it helps organizations implement and communicate all compensation related information in a single platform without any hiccups. 

  1. Anaplan

Being a financial forecasting tool by nature, it helps businesses solve their compensation troubles by replacing their old excel files and manual updating process. While it can do nearly anything from analyzing large data sets to offering complete transparency, it has trouble with metadata management and sharing data across modules.

  1. CompensationXL

CompensationXL standardizes the compensation management workflow by streamlining the approval process, ensuring timeliness and accuracy in end-of-cycle statements, and making actionable recommendations. 

  1. Harvest HCM

Harvest HCM enables businesses to automate their end-to-end compensation program including stocks, equity, and promotion with an easily accessible, web-based interface. 

  1. Payscale

PayScale provides businesses with on-demand compensation data to create, track and analyze a compensation strategy that meets their business needs. 

Closing thoughts

Businesses of all sizes have started using compensation management tools to streamline the process and track their hard dollar spend better. With the evolution of technology, compensation tools have evolved as well.

While all the compensation solutions listed above offer an incredibly powerful compensation management experience, their feature sets and functionalities set them apart. So, before leaping onto a specific product, it would be better to take a look at each tool and verify whether or not they suit your unique compensation management needs. 

If you’re on the lookout for the right compensation management tool, give Compport a try and see if it’s the right fit for your organization. We’ll get on a free call with you to understand your requirements and help you make the right compensation management decison.

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compensation management

To Automate, Or Not To Automate, For Employee Rewards, That Is The Question.

Small businesses deep down know that their growth is dependent upon keeping their employees loyal and happy. And, the key to doing that is keeping employees engaged, making them feel good about their contributions, and planting the seed to inspire them to perform better in the future.

How do SMBs go about doing all that? While compensation revisions are one way to entice employees to stay longer, most employees need more incentive than a once-in-a-year pay hike to take the extra step in their productivity, which is where employee rewards and recognition programs play a substantial role.

Chances are you already have an impromptu employee rewards program in place. If your manager offers public accolades for each of your small wins, you’ll work even harder knowing that you’ll eventually get your moment in the sun. However, managers are human beings too, they couldn’t possibly keep track of every milestone an employee achieves. 

What happens if the managers fail to acknowledge the employee’s small win? Employees will lose the hope that their work will be recognized, this hopelessness will breed disengagement and eventually result in churn.

Now, imagine the benefits a small business can enjoy if they have a solid rewards and recognitions program that runs on its own like a well-oiled machine. A transparent, automated R&R process can eliminate any chance for bias, encouraging employees to do their best since their hard work will never go unrecognized. 

Before we go any further, let’s see the problems with an archaic rewards program, how a standardized employee recognition program can benefit an organization, and how can SMBs leverage HR process automation to implement their own rewards program to uplift employee spirit. 

Shortcomings of manual employee rewards program

In today’s culture of instant gratification, employees expect a quick turnaround and appreciation for their best work. So, the ability to notice, encourage, and reward outstanding employee performance is the heart of long-term employee retention and satisfaction.

It is a fact that 69% of employees would work harder if they felt their efforts were better appreciated in a timely way. Meanwhile, a recent Deloitte research shows that organizations with employee recognition programs have a 31% lower voluntary turnover.

There is no room for inefficiencies in employee recognition. All of your systems need to be integrated seamlessly to deliver a hassle-free experience. Thankfully, with the use of HR process automation, businesses can eliminate the time-consuming and error-prone manual processes while leveraging a large amount of employee performance data to deliver a personalized and interactive employee recognition experience. 

How automation streamlines an employee rewards program

HR process automation enables businesses of all sizes to deliver a highly personalized recognition process across the performance cycle affordably. If leveraged appropriately, R&R automation has been proven to increase satisfaction, happiness, and ultimately, profit margins. 

To execute a great rewards and recognition automation strategy, employees must understand what motivates their employees to give their best and how to go about enhancing that experience. Then, the HR team can split employees into little groups (based on department or skill set) and create flows and R&R campaigns for each employee group.

Listed below are three automation strategies and technologies for delivering an outstanding employee experience:

1. Email notifications

While timely notifications can be used at various points during the employee lifecycle, it is a specifically powerful tool to use after the milestone achievement in an employee rewards program. 

When managers receive automated emails about the achievements of their employees, it will help them inform, announce, and communicate the same with the entire team. With this information in place, managers can do an array of things from throwing a surprise party for the top performer to leaving a sticky note or message on their desk saying “well done”.

2. Intelligent chatbots

A cloud-based rewards and recognition platform can capture real-time feedback given by managers and peers and store them in a centralized location, speeding up the rewards cycle and improving employee convenience.

HR automation platforms that come with built-in chatbots will help free up human resource managers to tackle more complex rewards issues and develop meaningful employee relationships with immediate answers to commonly asked questions, integrating with other HR systems to provide an update about their progress, and  gather employee information to make performance recommendations through productivity hacks and performance tips. 

3. Meaningful insights

Inorder to understand employee expectations better, SMBs must rely on the historical data they have to continuously improve the employee experience and engagement. HR automation tools can help businesses to turn a ton of employee survey data into actionable insights. Armed with this information, both functional and HR managers can make informed decisions to improve employee experience across the hire-to-retire lifecycle. 

Automation is the future of employee rewards

Making employee happiness and satisfaction a priority is critical to make your business flourish. Placing your employees ahead by automating your employee rewards program with other critical HR functions will help businesses facilitate a far-reaching transformation without leaving a negative impact on employee-employer relationships. 

The day you lose sight of the fact that your employees are the heart of your operation, will be the day when your business starts to tumble down the hill of efficient operations. So, what are you waiting for, add an employee rewards program to your HR automation project and see for yourself how it can deliver an unforgettable employee experience that improves retention while reducing costs.

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compensation management HRMS Solution

3 Ways Small Businesses Can See the ROI on HR Automation Investment

 

SMBs depend on efficient process flows and effective documentation to keep their employee lifecycle seamless. Businesses that fail to keep up with the technological transformations run the risk of falling behind and losing to their competitors in the war for talent. 

HR automation can transform their day-to-day HR processes and pave the road for employee engagement and satisfaction. However, without measuring the ROI of HR process automation, SMBs may as well throw out a bunch of process initiatives and hope some miracle makes their employees stay. 

Ultimately, when it comes to any process automation investment, it all comes down to ROI. And if the HR team has trouble showcasing the benefits of their automation investment, then the management may start retracting their decision to embrace automation. 

In order to help HR business units bring themselves up to speed on the benefits of HR automation, we have broken down three areas where SMBs can accelerate ROI and their business growth using automation.

1. Offer an onboarding experience

Research shows that traditional, paper-driven onboarding processes drown employees in paperwork and drag on for over 11 hours. Boring employees to death with paperwork will force new hires to exit the company twice as fast. What’s more, statistics show that 58% of employees tend to stay for 3 or years if they go through a structured onboarding experience.  

Onboarding process automation can simplify labor-intensive tasks like documentation, manual follow ups, and file storage. It can also enforce accountability and ensure policy compliance with automated checklists and rule-based workflows. With all these features by their side, small businesses save more than 50% of the time and expenses they typically spend on their onboarding process. 

2. Create a performance-driven culture

Proper measurement and evaluation are at the heart of growth. Timely evaluations show how things are progressing and whether or not preset goals were achieved. That’s the core of employee performance management as well. 

Are your employees delivering the top-tier result that is expected out of them and how do you go about restructuring their compensation into something they truly deserve? However, depending on outdated tools like paperwork, excel sheets, and manual workflow management, makes it impossible to get a clear overview of an employee’s performance. As a result, businesses end up relying on instincts and gut feel, falling into the trap of favoritism and bias.

An automated performance management process can help SMBs ensure that confidential employee performance data and sensitive compensation information remains secure while streamlining the process with timely performance check-ins, historical performance comparison, and accurate documentation.

3. Give your employees the gift of hassle-free payroll

Manual payroll processing is the most redundant HR process in existence. It is a daunting task that needs to be accurate and error-free, else there will be a ton of repercussions to face. Small businesses that cling to excel-based timesheets and email payslips are depriving themselves of the productivity that process automation can offer them.

A robust payroll processing platform can streamline the payroll and compensation management process within an organization by catering to every HR and payroll processing needs with a user-friendly and accessible interface. Automation simplifies the tedious wage calculation process by generating accurate, error-free results within a few clicks.

On top of that, an automated compensation management process can facilitate hassle-free financial planning, ensure accurate timekeeping, improve the productivity of HR staff, and enhance employee satisfaction. 

Conclusion

The conventional way of executing HR processes is run completely on human efforts, consuming a ton of time and effort. A well-thought out and implemented HR automation project can help small businesses save time and money no matter which process you decide to automate. 

If you’re having trouble managing your HR processes manually, simply focusing on automating repetitive tasks and eliminating manual intervention can leave a huge impact on your process efficiency. If your manual dependency is holding you back from scaling up, then speeding up the implementation by restructuring your existing processes is very high leverage. Using a tool like Compport FIT for only $0.3/employee, can give you greater peace of mind for a fraction of the cost.

Either way, any small business (irrespective of industry) can extract high-impact ROI with HR process automation. Start with these three HR processes outlined in this blog, further along the way, start automating more HR processes like vacation management, recruitment, more, to multiply the ROI even further.