compensation management Uncategorized

7 Major Risks of Using Spreadsheets for Compensation Management

Your classic spreadsheet-based compensation management is a ticking time bomb waiting to explode. One wrong spreadsheet entry can cause payroll errors, employee dissatisfaction, and blow your payroll process right up your face. What SMBs don’t realize is that while spreadsheets are useful in their own way, they are useful only to a certain extent. 

Adapting an “It ain’t broke, don’t fix it” will only make existing risks spiral out of control and leave a hefty financial impact on your organization’s bottom line. While band-aid solutions like adding more staff members or creating an exhaustive compensation strategy checklist may help a bit, these instant fixtures will make little to no difference in the long run.

Before you get all geared up to fix the mess left behind by your manual compensation management process, you need to have a clear understanding of the worst parts of the spreadsheet-centric compensation management process. While there are an array of challenges involved, listed below are seven major risks of using spreadsheets for compensation management.

1. Spreadsheets are cost-intensive and not collaboration-friendly 

Compensation management is a crucial process that has multiple stakeholders and a slew of compliance restrictions that need to be met. When data is spread across a series of spreadsheets, stakeholders are forced to sift through overflowing spreadsheets and long email threads to track an employee’s compensation.

When the only way to exchange information is cumbersome and time-intensive, its time-intensive nature impacts the productivity and efficiency of stakeholders ranging from employees to functional managers and HR leaders, making it injurious to your organization’s growth by increasing operational costs and shrinking profit margins. 

2. Spreadsheets are prone to manual errors and inaccuracies

Despite being vitally important to the operation of a company, the compensation spreadsheet is not as rigorously tested as it needs to be. Even when it is subjected to critical reviews, there are chances of people involved to misinterpret the data and overlook incorrect formulas paving the way to create yet another spreadsheet blunder like an hefty $11 million severance error.

3. Spreadsheets are obstructive to compliance

The biggest roadblock for enforcing leave policies is the most trusted spreadsheet. Inherent lack of controls in spreadsheets make it easy for people to edit or update data without being detected. Often, edit history isn’t just enough to keep security risks at bay. 

When there aren’t proper measures in place to prevent people from viewing or editing their compensation details, it can open an extremely potent can of compliance worms that range from time theft to outright money laundering.

4. Spreadsheets lack transparency and visibility

When there is no visibility into historical employee compensation details, organizations will not have enough data to compare compensation metrics and analyze whether their employees are being paid in a fair way. 

Both functional and HR managers need a bird’s eye view of every little detail that matters from pay policy to payment cycle and miscellaneous employee benefits. Trying to extract this information from emails and excel sheets is futile. Drawing up a conclusion from inaccurate data, or banking on your intuition, is a huge gamble that can affect the brand’s reputation.  

5. Spreadsheets cause confusion and chaos

When compensation is completely managed using spreadsheets, there’s a high chance for older versions of these documents being circulated and used by both functional managers and employees. Such instances of data mismatch can cause endless disputes, employee dissatisfaction, and more.

6. Spreadsheets lead to long and windy approval cycles

When all confidential compensation data is saved on online forms and spreadsheets, getting things done at the right time is impossible and leads to a long and complex cycle. In such instances, HR managers are forced to create endless copies of compensation-related documents and distribute it manually to the team. 

7. Spreadsheets cannot establish accountability

While old-school compensation management excel templates can help organizations save a few bucks in investment, it’s siloed interface that doesn’t communicate with other payroll administrative apps. As a result, HR managers end up spending too many hours tying up loose ends on spreadsheets and chasing after stakeholders to get necessary input or approval.  

Switch to sophisticated compensation management

Manual compensation management processes impede day-to-day HR operations, and also cost a lot more than you may realize. Your compensation management practices are unique and so is the way you use spreadsheets to manage employee remuneration. 

For you to get a clear idea of whether a spreadsheet is sufficient for your compensation management practices or if you can benefit from a cloud-based compensation management software like Compport, it’s best to see for yourself how each tool works with your employee compensation information, carrying out the operational tasks that you normally require. 

Get a free demo today and see the magic it can bring to your business.


Understanding Gender Pay Gap

Understanding Gender Pay Gap

The gender pay gap is the difference between men’s and women’s median annual earnings from full-time, year-round work. The International Labour Organization (ILO) estimates that women on average continue to be paid about 20 per cent less than men across the world. There are large variations between countries, from a high of over 45 per cent to hardly any difference, please see the figures below for different economies.

The gender pay gap is a measurable indicator of inequality between women and men. Most governments are trying to guarantee equality of treatment between men and women in remuneration. Yet, the gender pay gap persists and the World Economic Forum estimates it will take 202 years to close the global gender pay gap, based on the trend observed over the past 12 years.

What causes the gender pay gap?

Under-representation in leadership: Far fewer women than men are in management and leadership positions, especially at higher levels. This brings down the average salary of female managers compared to that of male managers.

Working hours: The gender pay gap is often a consequence of the different patterns of workforce engagement by women and men. The ILO highlights that women work on a part-time basis more than men do. This is often linked to women taking on more of the unpaid family responsibilities.

Career breaks: Women more than men are likely to take career breaks from their employment in order to raise children or care for the family. This means that when they return to work, they are likely to have fallen behind in advancement and in remuneration.

Education: Women still lag behind men in STEM areas that are associated with higher paid jobs. Even when women are qualified in STEM subjects, it can be challenging for them to obtain and maintain a job in these areas because they are traditionally male dominated.

Feminized jobs: Occupational gender stereotyping results in certain jobs being held predominately by women, and that leads to “female jobs” being undervalued for purposes of wage rate determination.

Benefits of closing the gender pay gap?

The benefits of women earning the same as men include an increase in their purchasing power which in turn helps stimulate consumer spending and the economy. According to a research conducted by ILO, across all economies that increasing gender participation adds a significant amount. The ILO estimates that reducing the gap in participation rates between men and women by 25 per cent by the year 2025, could raise global GDP by 3.9 per cent, or US$5.8 trillion.

What can organizations do to close the gender pay gap?

As a first step, recognition of the business benefits of improved gender diversity at all levels is critical as well as commitment from top leadership. More specific actions can be:

  • Promoting a gender-inclusive culture while adopting a holistic approach to equal remuneration for women and men for work of equal value.
  • Making equitable salary offers to men and women.
  • Undertaking a gender pay review to assess whether there is a gender pay gap and to what extent – conducting regular pay reviews can help a company keep on top of any inequalities.
  • Making jobs more flexible so that more women access higher-level jobs and, therefore, higher pay.
  • Ensuring that unconscious gender bias does not affect performance reviews. Selecting and applying a job evaluation methodology to assess the skills and responsibilities of the various jobs in the organization with a view to adjust job titles, contents and corresponding pay overtime.
  • Sharing the effort, results and benefits with the stakeholders in the organization’s ecosystem and being an inspiring example for others.

Ref: This brief is based on findings from the ILO report on Women in Business and Management: The business case for change (Geneva, 2019)


Why the Demand for a Compensation Software is Increasing?

Why the Demand for a Compensation Software is Increasing?

According to various market researches done by several intelligence companies, the Global Compensation Software Market is expected to grow at a CAGR of 9% during the forecasting period of 2019-2026.  More than 50%+of the market share is originated from the Americas and the market in APAC is expected to register highest CAGR.  And Small/ Medium size enterprises are expected to show higher growth rate in demand than Large enterprise segment. In 2018, on-premises compensation software accounted for the significant share in the global compensation software market however demand for cloud-based compensation software is growing sharply and it is expected to witness the growth of over 12%, during the forecast period, which is higher than the overall market CAGR.

What are the key drivers in the Market? What is Changing?

Highly Attractive Benefits Offered by Compensation Software:

The benefits offered by compensation software, which includes optimized utilization of company revenue, enhancing positive reinforcement, boosting of employee performance, and improving company reputation during talent acquisition are expected to fuel growth in the market. On the other hand, automated compensation management process simplifies administration processes by reducing errors caused by manual work coupled with saving organizations’ money and time while improving efficiency and productivity.

Increasing Competitive Edge:

A smart compensation software helps organizations to take their strategy beyond numbers and budgets. It ensures that the incentives provided to employees are in line with the recent market trends, which helps organizations in maintaining low attrition rates. Moreover, employers can also identify top-performing employees by their work management, thus rewarding such employees for their effort. Also, it improves the workplace environment of the company, which plays a significant role in the performance and productivity of an employee. Thus, more companies are looking to adopt compensation software tools into their organizational activities to attract and keep top performers, build a solid employer brand and ultimately to sharpen their competitive edge.

Technological Advancements and New User-Friendly Software Launches by Market Players:

There is a clear shift from Core HR Suite to end-to-end Compensation Software since organizations do not want to rely on their core HR Suite and compromise their compensation strategy. A typical HR Suite can only manage certain aspects of a typical compensation process; thus, companies still manage some part of their processes offline, basically through traditional spreadsheets. But with the technological advancements and the smart offerings by “boutique' compensation software companies, the rules of the game are changing, more and more companies shifting their compensation processes out of their HCM.  Unlike HCM market, approximately one quarter of the Compensation software market is dominated by major global vendors who offers full HCM suite, (for HCM market it is more than 50%). The concept of ‘integration’ is surely helping this change, most of the compensation software can be easily integrated to ERP/ HRIS and allows organizations to leverage their investments in existing processes and systems.


Nowadays, for any size of enterprise, for any type of compensation process, for any set of expectation, there is a compensation software available in the market. It is “the time” to manage employee compensation with confidence; the right tool can bring data intelligence, workforce agility and administrative efficiency to human resources while providing transparency of all compensation detail for reporting, total compensation statements and letters, and audit/ compliance reporting.

There is a compensation software out there which would help you to optimize the utilization of company revenue, to enhance positive reinforcement, to boost employee performance and engagement. Wishing you all the success and highest return on investment. For any queries/ feedback please feel free to reach out.

Thank you

Co-founder/ Managing Partner Compport

compensation management

Benefits of Systematic Compensation Management on Employees’ Performance

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Compensation is the reward or monetary benefit given to employees in return for their exemplary services and work or in recognition of merit and it is said to be the cornerstone of a productive workforce. To provide appropriate, adequate and fair compensation to the employees within the boundaries of budget and resources is a milestone achieved by very few organizations. An automated and strategic compensation management system that addresses compensation, benefits, recognition, and appreciation is the basis of acquiring a productive work environment. 

A study on the effect of compensation on employees’ performance has revealed that compensation in the form of salary, wages, bonuses, facilities, travel programs, and holiday allowance has a direct and positive impact on employees’ efficiency and performance. Systematic compensation management in the company impacts employees’ performance and therefore the company’s growth through the following factors:

Provide Higher Job Satisfaction

Creating the right compensation plan leads to higher job satisfaction among the employees. When we talk about job satisfaction in the corporate world, it is somehow related to the salary drawn by the employee. Employees tend to measure their efforts and contribution to the organization’s uplift through the monetary benefits they avail. With an upright salary management system, the HR department can ensure that employees attain maximum satisfaction from their work as it enables the HR department to revise the salary plans and incentives at regular intervals. That in turn, boost employees’ dedication towards work.

Help In Retaining Valuable Employees

A company’s success can be estimated through its capability to retain valuable employees. In this highly competitive industry, the challenges faced by the HR department are not limited to approaching and recruiting the right candidates but also retaining them. Compensation management software eases the task of retaining employees by providing continuous appreciation and consideration in the form of increment and incentives.  

Enhance Employees’ Efficiency

The growth of a company is the outcome of its employees’ efficiency. Yielding the maximum efficiency from the available workforce is the key factor in attaining business milestones. Providing proper compensation to the employees helps in enhancing their efficiency as it encourages them to give their best and perform their work with utmost dedication.

 Keep Employees Motivated

Bonus and incentive plans act as the driving factor for keeping up the spirits of the employees at the workplace. When employees know there are bonuses or incentives, they tend to stay motivated and deliver better results in lesser time. A study by CEB reveals that an organization without the right compensation management system encounters an increase in employee disengagement and turnover by 15%-50%. Through well-organized compensation plans, employers achieve higher productivity and overall growth of the company. 

Improve Employees’ Productivity

Happy employees are the most productive ones. The productivity of every individual employee is one of the most eminent factors in determining a company’s progress. Compensation management helps employers to provide higher work satisfaction to the employees which in turn improves work productivity and profitability. According to research conducted by CEB, the lack of astute Recruitment management software in an organization leads to low performance and productivity of employees in the tune of *38%. An effective reward system improves the quality and quantity of work executed by the employees and aligns their performance with organizational objectives.

Summing Up

A well-crafted compensation plan paves way for the company’s ultimate success and has a great impact on employees’ overall performance. Implementing a robust, flexible and efficient compensation management software like Compport can prove to be extremely beneficial for the companies as it simplifies various HR processes and synchronizes the work performance with analytics. 

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