Categories
compensation management

Smart Compensation Planning Softwares are in demand. And here’s why!

“Today, we have robust cloud-based compensation software that can completely automate the entire complex activities of the Total Rewards teams.”

The endless impossibilities of crunching numbers to create that perfect model (and yes, accompanied by equally endless possibilities of making errors); spending months together to prepare the roll-out of the compensation review process; incorporating last-minute comp change requests from the management; racing against time to catch the month-end payroll; spending sleepless night to distribute e-letters…well, well, well…this is the story of every C&B professional around the world who has not leveraged best in class HR Tech solutions.

It’s quite intriguing that a high-impact function such as “compensation planning” (that almost always consumes a sizable part of the organisation’s budget) is accorded the least priority in the Digital HR journey. Wonder why? Well, the answer is Total Rewards specialists believe that it is almost impossible to automate the complex function they manage. Is that true? Well, definitely not.

Today, we have robust cloud-based compensation software that can completely automate the entire complex activities of the Total Rewards teams. And these smart HR Tech solutions can effectively deliver on the following compensation planning activities seamlessly:

  • Dynamic compensation modeling year-on-year,
  • Manage a variety of rewards programs simultaneously such as Salary Review, Bonus Plans, Sales Incentive Plans, Equity Programs and Instant Rewards.
  • Change the processes as and when required.
  • Manage last-minute changes by stakeholders and sometimes even during the process
  • Enable seamless communication to employees to share full value propositions and create the right perception.

Key benefits of leveraging Compensation Management software:

  1. Strategic pay scale decisions (including an analytics-based rewards approach) can help organisations increase talent attraction, workforce satisfaction, and engagement, and reduce employee turnover dramatically
  2. Simplifies global implementations of complex total C&B policies, procedures, regulations, etc.
  3. Drastic reduction in paperwork and spreadsheet management time, thereby increasing the efficiency of the HR team manifold
  4. Provide a centralized place to manage all tasks related to employee compensation, giving all users a common experience for various programs.
  5. Support accurate and timely pay-related decisions through product features such as review and reporting tools, automated budget controls, manager decision support, and centralized planning dashboard.
  6. A dollar saved is a dollar earned. Valuable dollars for the organisation are saved as manual calculation and resultant errors become a thing of the past

Globally, while the pandemic has provided a strong flip to performance management solutions, there has been a resultant downstream spurt in the interest for compensation software solutions too. This has been triggered mainly due to market-shifting factors such as data-driven decision making, and an increasing need for efficient compensation policies and talent retention models. Organizations are increasingly deploying such smart HRTech solutions to view and alter related policies if required, and efficiently plan rewards, bonuses, and promotions for their employees.

Compport is one such cloud-based HR software that focuses on Compensation Management, backed by People Analytics & Employee Surveys. Compport offers a tailored fit solution to precisely meet your needs through:

  • 100% configurable modelling and process management capabilities
  • One software to design, simulate and roll out end-to-end compensation plans such as Salary review, bonus and sales incentives, equity/LTI plans and instant recognition plans
  • Intelligent analytics to view the impact of your compensation models even before you launch them, both employee wise and segment-wise, enabling fair and equitable reward distribution.
  • Highly intuitive and informative manager and employee screens, that helps managers make a better decision
  • Total Rewards Statement module which helps you to create a stronger and better perception of rewards through a holistic picture of your employee value proposition
  • Availability of thousands of pre-built reports including basic analytics (such as headcount, turnover, employee cost), compensation analytics (such as population distribution in comparative ratio ranges, or compensation plan-based budget distribution vs utilization), productivity analyticstalent analytics and predictive analytics.
  • 50+ ready-to-launch employee surveys throughout the employee lifecycle or by creating your own customised survey, all of which can be launched in 3 steps within 3 minutes.
  • Any much more….

Compport’s existing and growing capabilities to manage your compensation programs not only aim to bring enormous efficiency in processes and efforts by HR and managers but will also strengthen and accelerate your journey of creating an empowered culture. Learn, test, deploy to see the SEA of advantages through Compport.


This post was originally published here

Categories
Benefits and Perks Culture

6 Employee Benefits That Will Improve Your Retention Rate

We have put together a list of 6 ideas that will help you improve the retention rates of your employees

Increase your employee’s Annual leave:

This may sound like a very unproductive method to increase retention rates, but do it right and it will work wonders for your organization.Increasing your employee’s annual leave may sound scary, but you don’t need to increase it by a lot.

Just adding a leave before christmas and one more holiday on their birthday can do the trick! You can also create separate holidays for parents during the vacation period of their children. You can allow them to exchange 2-3 days of leave in that time, so that they can travel with their children. These small leaves add up and allow your employees to show up recharged and rejuvenated. And a refreshed employee is naturally more productive at the workplace.

Take your employees out on food fiesta’s:

There’s a reason billion dollar organizations like google offer free daily buffet’s to their employees. They understand that quality food can improve the health of their employee. Moreover when food is provided daily, your employee has one less thing to worry about.

But spreading out a daily buffet can have a serious toll on your budget. Sometimes you might have the money to offer a buffet, somedays you may not have the money to offer a seven starter oriental style buffet lunch.

So if you can’t offer “ free food “ daily, you don’t need to do it daily.

The idea is to remain consistent with your food fiesta’s. So if you can just afford to take your employee’s out on a Friday evening – do that!

If you can afford to order takeout’s on Monday’s, Wednesday’s and Friday’s – do that.

If you can just afford to buy lunch on match days – do that!

The Core idea is to maintain food fiesta’s on a consistent basis. Create an experience your employees will look forward to and they will naturally stick within your organization.

You can offer a part of your company as shares or Bonus:

Most startups do this trick to reduce the churn rate of their organization. Jack Ma, the founder of e-commerce giant Alibaba is known for offering a part of his company to his oldest employees.

In fact, Jack ma has an assistant who stuck with him since the inception of the company. Apparently he awarded some shares to her and she is now worth in the millions of dollars.

So if you are looking to grab hold of your high employees, try talking to your senior management and offer a percentage of your organization to your employees. The percentage can depend upon their contribution and their level of seniority in the organization.

If shares don’t work for you, try offering annual bonuses for your employees regularly. Billion dollar venture – Airbnb offers frequent bonuses to its employees on an annual basis. This bonus is split from the profit it acquires every single year.

You can provide a flexible work schedule:

Ah, the holy grail of employee experience in the remote working era – Flexible work model.

You have to accept that COVID-19 has changed the way employees approach work and life. More employees are now willing to sacrifice a bit of salary for a flexible work schedule.

In a review conducted by CoSo cloud, it was found that 77% of employees preferred to work remotely. They believed that remote work allowed them to become more productive. It also helped them reduce the time and money wasted in commute hours.

Some employees also believe that a Remote work schedule allows them to spend quality time with their family on a regular basis.

And finally some people firmly believe that a flexible work schedule allows them tto focus on work effectively. They state that they can choose to work from home or travel to the office depending upon the type of work they need to complete on that specific day. 

It’s true that a flexible work schedule may not be possible for all organizations. If you honestly believe that your employees need to commute to your office to perform quality work – do it.

But if you feel that they can be offered a flexible work setup – please do go for it. If you don’t, you might end up losing your employees to your competitors who offer a flexible work schedule.

Create Employee recognition awards and prizes:

Apart from a competitive salary and healthy work environment, your employees also need recognition. They need to be recognized for the hard work they put in and it needs to be awarded. 

Here are some business organizations that offer a employee recognition award at scale

  1. Disney – they have close to 180 employee recognition awards. 
  2. Zappos – They run a gift card program that allows employees to rate their peers on teh quality of their work
  3. Groupon – it award it top performers with jackets and allows them to customize it to match their style

There is no set way to define your employee recognition awards programs. All you need to do is identify what your employees are doing on a daily basis. Find out a “ honest to god “ way to measure their contribution in every contribution they make to your organization.

NOTE: Your employees must be judged without any external factors like likeability, age, gender and race into the fold. If you believe that any of these come into play, you need to change the way you offer your recognition awards.

At the End of the Day, your awarding process must be based on transparency. If your employees see that it is not transparent, they will come to hate the whole venture of the recognition awards. That might end up counter-productive to the whole concept of the Employee Recognition awards.

Categories
compensation management HRMS Solution

How to Ensure Pay Equity in Your Organization

Pay equity is a real fragile concept that makes sure that all your employees are paid the amount equal to their efforts.  In recent days HR professionals and hiring managers are paying real attention to Pay equity inside the Organization.

It’s really important for every organization to ensure pay equity to:

  • Reduce the risk of litigation and cases
  • Prevent your brand image from public damages
  • Prevent the feeling of unfair treatment between employees

There has come a culture shift where employees have understood that it is their right to be paid fairly. They want to be paid on their efforts, rather than on their race, religion or other external factors. In short, Pay Equity has become a necessity to retain top talent and build a healthy culture in your organization.

What do you need to maintain Pay Equity?

Maintaining Pay Equity has become a huge stressor as your organization gets bigger. But it can be maintained if you have collected the right data before deciding an Employee’s salary.

Document your pay processes and policies

Your Primary step towards Pay Equity is to maintain a recorded schedule of pay processes and policies. You need to Document all your processes and create Standard Operating Procedures ( SOP’s ) for it. This will make sure that you have a set of policies to maintain Pay Equity in your organization.

Collect data

For the next step, you need to focus on collecting data about your current payment policies and your employee satisfaction towards it. You need to collect a ton of data points to asses the current condition of Pay Equity in your organization.

This step will help you understand where your organization is currently lacking and how you can improve it.

Find out the efficiency and contribution of each employee

Now you need to set up data collection methods to constantly monitor the efficiency and contribution of each employee to your organization. The bigger you get, the more confusing this will be without a set procedure.

You need to set up foolproof systems that will constantly monitor each employee and present that data in the form of a readable report.

Analyze the data and deliver results

When all your data is collected and Analyzed, you need to schedule a separate time to review it. This can be done on a monthly or weekly basis depending upon your employee count and size of your organization.

But you should always take some to take a look at the results and get meaningful results from them.

Doing all these steps mentioned above manually is excruciating. That’s where a compensation management tool like Compport will come handy.

How do you use software to ensure pay equity?

Here are 5 reasons ( and 1 Bonus Reason ) how compensation analytics software will be beneficial for you in ensuring equal pay:.

You can get employee level suggestions

Pay Equity software will help you get a suggestion from each employee inside your organization. When you are able to identify the opinions of each employee and act, two things happen in tandem.

  1. You Identify your opinion of each employee and that gives you a new perspective towards your business.
  2. When each employee can get a seperate platform to voice their opinion, they feel empowered.

At the end of the day, getting suggestions from each employee will empower you to take better business decisions on a pace unseen.

You can conduct a quick analysis to determine pay gaps

With a Pay Equity Analytics tool, you can also drill down on your employees salary and performance on a department-wise basis. This will allow you to perform quick analysis of employees who are overpaid or underpaid in your organization.

You can also compare the salary of each employee according to the Industry benchmarks and identity where you stand. 

Find employees are paid higher or lower than the average compensation

As I’ve stated above, a Pay Equity Analytics tool will help you identify employees who are paid above or below the standard compensation rates in the market. You can get a detailed report and cut down on your budgets wherever it is unnecessary.

Find Instant suggestions for salary packages( for new hires )

It can be hard to set up compensation for a new hire. This is even harder if the employee is hired in a completely new role in your organization. 

A pay analytics tool will help you solve this problem by identifying role wise suggestions fr each new hire. With these suggestions and industry specific insights, you can identify the compensation that will be the best for each hire.

We live in a world where data is abundant, so it’s always better to make your decision backed with solid Data.

Identify pay gaps based on gender, demography and other factors:

A Pay Analytics tool will help you identify if employees of a certain age, gender, religion or race are underpaid. This will allow you to recognize discrimination inside your organization and identify the person responsible for it.

You can then set up foolproof systems to prevent any sort of these discriminations in the future. As you know a healthy culture with Pay Equity equals a successful Organization.

Most Important: You can perform Cost Analysis to identify areas of improvement

Finally, when you have information on the payment policies of all the employees in your organization, it becomes easy to perform a Cost Analysis. You can identify the departments and roles where excessive budgets are allocated.

You can also identify employees who are underpaid in your organization. With all this data you can set the right metrics and reallocate your budget to the right department..

Categories
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. 

Categories
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.

Categories
compensation management HRMS Solution

3 Ways Automation Can Help You Streamline Employee Total Rewards Statement

All organizations realize the importance of having a solid employee total rewards program in place. For, it is the key to successfully reinforce and drive employees to fulfill an organization’s mission and business goals. However, implementing an effective employee total rewards statement is anything but easy. 

What’s more, outdated employee rewards programs that are paper-based are not only redundant but also trivial. To make their employee rewards process effective, organizations need to shift their focus and make it futuristic instead of taking a retrospective stand. And, employers need to think beyond monetary rewards to keep their employees engaged.  

While an archaic rewards program can help you reward top performers of the past, automation can help you get a step beyond that. It can help businesses take their employee satisfaction to the next level with factors like recognition for achievement, learning and development opportunities, and career advancement possibilities. 

Listed below are three ways that automation can make your employee total rewards statement provide the impact you always dreamed of. 

1. Focus more on strategic execution

Manual employee rewards and recognition programs are labor-intensive. From creating nomination forms to printing them and forwarding the nominations to the committee which is incharge of selecting and rewarding employees, it relies on the manual effort exerted by the HR team and functional managers.

Automation eases the administrative burden involved in the process, reduces the need to chase after stakeholders, and provides HR managers more time to focus more on the strategic parts of their employee recognition process. Reduced manual intervention will not only enable process accuracy but also ensure 100% on-time completion of the nomination process.

2. Eliminate bias and favoritism 

Businesses that rely on outdated tools like paper forms and spreadsheets to run their employee rewards program pose a higher risk of bias and favoritism running rampant since it is hard to perform due diligence on every stage of the employee rewards program.

Whereas, an automated employee rewards statement which is supported by rule-based workflows will prevent erroneous and inappropriate nominations eliminating the chance for any bias or compliance risks completely. With detailed audit trails and 360-degree visibility, business leaders can overcome the recency effect and make an accurate decision that is backed by data. 

3. See if your employee rewards are impactful

Rolling out your employee rewards program and failing to measure the impact it leaves on your employee morale is equivalent to throwing away your hard-earned money down the drain. While you can easily measure the cost of your employee rewards program, in a manual environment, it is impossible to track the data that is required to measure the impact your program creates. 

With automation, you can easily know who was recognized and who wasn’t, how well the program is received in each of your internal departments, and other critical data points at the touch of a button. With built-in reports, HR leaders can turn their data into actionable insights based on which they can make informed improvements to their existing employee rewards program.

Summary

Automating your employee rewards program can provide your employees the experience they are looking for and the impact you’re trying to create. Instead of looking at it as an unnecessary investment, SMBs need to understand that it is a growing necessity. For, without it, businesses can not do justice to their employee rewards statement. 

Using automation can eliminate repetitive tasks involved in the employee rewards process and improve your employee satisfaction rates significantly. The ability to digitize nominations can improve employee experience, the transparency of your selection process can imbibe trust, and data analytics can make sure that your employee rewards statement remains in top shape.  

What’s more, automating your employee rewards process will neither dehumanize it nor will it replace the interactions that you have with your employees. It helps HR leaders and functional managers to leverage the power of technology to break conventional barriers in your employee rewards program to achieve greater efficiency, improve employee trust, and eventually motivate your employees to do their best possible work.

If you’re searching for ways to transform your employee rewards and recognition statements for the better, embracing automation must be your first choice to make your dream come true.

Categories
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.

Categories
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.

Categories
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.