Compensation is often an organization’s largest expense, so cost optimization is always an issue when it comes to rewards. The mandate for Return on Investment (ROI) is especially strong during hard economic times, and at those times companies take a hard look at their staffing and pay packages.
How can HR professionals best meet the demand for ROI from rewards programs? What HR technology is needed to streamline processes and achieve that ROI?
Sometimes the best way to evaluate new ideas is to see them in action. Our customer base has shown a lot of innovation in making compensation and performance processes more efficient. Here are examples of how some leading companies found value in using beqom to manage performance and rewards.
1) Cost savings from time savings
One major consumer packaged goods (CPG) company sought a way to consolidate its compensation cycle and performance rating process, in order to save managers’ time. Previously it ran two separate processes, about six weeks apart. Combining the two processes into one not only saved on costs by reducing time spent but greatly improved the user experience for its managers.
2) Cost savings from administrative process improvement
In the same CPG company with two separate processes, HR administrators had two different processes to prepare, administer, and report on. They required many data movements because the processes were managed by two different modules in their HRIS. They made a business case for a combined performance and rewards solution, based on both major time savings for managers and big efficiency gains for their admin team.
3) ROI in financial services
In another case, a large American real-estate financing company with more than 1500 employees and more than $84bn in real estate loans combined its performance and rewards into one system and one process, yielding efficiency, time savings, and smoother processes for employees, managers, and HR.
4) Cost savings through visibility and budget control
A global transport and logistics company with more than 70k global employees wanted visibility into its variable pay plans so they could know the costs of all their plans. Implementing beqom’s Total Compensation Management (TCM) solution gave it ROI through both visibility into its variable pay plans and analytics to ensure the plans were driving performance.
5) ROI through employee engagement
Beyond cost savings, ROI can be delivered by increasing employee engagement and discretionary effort and improving retention. A South African financial services firm with more than 85 million customers recognized that its people were its greatest asset. The firm wanted to increase openness and collaboration in a structured and continuous way, to drive engagement, performance, and accountability. It adopted beqom’s solution for Continuous Performance Management (CPM) and saw a 10% uplift in its cultural indicator survey scores within a three-month period.
Delivering meaningful compensation with efficiency
Streamlining compensation processes and integrating them with performance management makes a lot of sense. The efficiency saves time and money, and next-generation tools for these processes give managers the capabilities they need to deliver more timely and meaningful rewards. The common denominator in the success stories above was beqom’s unified total compensation platform, which manages compensation, employee performance, sales performance, pay equity, and recognition all in one place.
A new definition of success
Josh Bersin says that recruiting talent is not enough, we need to also redesign work and culture to create irresistible employee experiences if we want to drive business-wide change and achieve high performance.
In today’s market and in the future, success will be defined not only by attracting new talent; it will be determined by inspiring and rewarding new levels of engagement and motivation in the existing team. Decades-old processes and technologies will not get us there. We need new processes and next-generation systems that will support them.
Removing technology limitations
To achieve breakthrough performance, HR systems for managing compensation and performance need to be flexible enough to change and adapt. To meet the needs of today’s workforce, they should at minimum support tailored rewards and unified total compensation management. And they should offer the ability to enable new paradigms like those described above if needed.
Whether or not companies move to a continuous rewards model, they should at least have the needed capabilities to support any current and future strategies so their business decisions are not limited by technology.
Legacy systems and standard HCM suites are not designed to manage tailored rewards and certainly not real-time compensation. Most cannot even handle multiple bonus programs. Flexible rewards call for best-of-breed, enterprise-scale compensation management software, especially for large and/or global organizations.
Whether you are implementing a full-blown one-to-one rewards strategy, or just trying to improve the automation and effectiveness of your compensation processes, a dedicated compensation management solution will be needed to achieve your objectives.