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Business Case for Compensation Technology

In: Business and Management

Submitted By yunnanlaowai
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ompensation accounts for nearly 70 percent of operating expenses for most organizations,1 and is one of the main reasons employees join and leave organizations. Yet despite the foundational role compensation plays in any talent strategy, most organizations continue to manage compensation market analysis, strategy development and program administration using spreadsheets. The perils and pitfalls of handling complex compensation tasks in spreadsheets are well known:2 spreadsheets are prone to human error, require a high-level of skill and expertise to move beyond simple analysis, and are not a scalable solution across decentralized groups. For this reason, most discussions on the use of spreadsheets in compensation and HR focus on productivity loss and risk of error. However, beyond these important but tactical gains, the compensation function and the organization at large have far more to gain by reducing reliance on spreadsheets than reduced risk and greater efficiency. This paper will explore the five areas in which organizations can improve via the adoption of compensation technology solutions: efficiency, consistency, visibility, transparency and trust.

the highest salaries in the market, but it does require a deep understanding of the pay landscape in which the company operates so organizations that choose to place a lower emphasis on base salary understand the need to balance this approach with non-salary rewards. Keep People Engaged and Motivated While we know that compensation alone does not drive engagement scores up, we do know that it is an important part of maintaining an engaged workforce. Employees who believe they are paid fairly are nearly twice as engaged as those who don’t.4 And how employees perceive the fairness of their pay is even more important than their actual pay level.5...

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