The human urge to tell a story using written communication dates back over 5000 years to the days of hieroglyphics and cuneiform writing. But the human necessity to record data may hearken back as far as 20,000 years, to the Ishango Bone found in what is now Uganda.
In any case, it is clear that humans have long had many reasons to track, analyze, and communicate data. Yet you can sometimes wonder why we aren’t better at it in Human Resources.
Being able to mine and analyze compensation and other employee data for insights can have huge benefits for a large company, such as attracting and retaining talent, engaging and motivating employees, ensuring fair pay and effective rewards, and reducing risk.
Here’s what the right compensation reporting technology can do for you.
Reporting and analysis add value
Reporting has important touch points in the compensation cycle. Once the pay recommendations have been approved, it’s important to be able to see and analyze the results. This requires the ability to run real-time on-demand reports to understand compensation spend, analyze pay fairness, assess compensation effectiveness, and provide the data required by all stakeholders.
Accomplishing this requires a central repository of compensation and performance data. Otherwise, HR staff will spend many hours chasing data sources, verifying data, and trying to compile and format reports. You wouldn’t rely on the Ishango Bone to manage this data, but is using spreadsheets really much better?
Comprehensive reporting is nearly impossible to do with a spreadsheet-based system, and even HR suites are seldom equipped to provide the kinds of analysis that a dedicated compensation system can deliver. This is where multi-dimensional analysis provides real value, for example, to determine how pay correlates with performance at the individual, team, regional, or country levels.
A central system allows you to automatically create and distribute customized dashboards to all stakeholders based on their roles. Clear and timely information can help managers to reward their teams effectively and enable senior management to understand compensation spending. This is a great way for HR business partners to add value to the organization, right up to the board level.
Technology Tip - Add value with advanced analytics: Total Rewards dashboards that show the big picture while drilling down to details can help to control compensation spending and ensure your pay is yielding performance.
Clear communication builds trust
Since pay is one important way that a company expresses how it values its employees, it is important to communicate pay decisions. Clear and transparent communication about pay builds trust and helps employees understand the value they provide to the organization. Feeling appreciated can have more impact than the pay itself.
Legacy approaches that involved lots of emails, spreadsheets, and paper printouts, put a great burden on HR compensation staff. But perhaps worse, that method generally failed to provide timely information or transparency into how pay was determined.
A dedicated compensation system can provide automated yet personalized total compensation statements and dashboards at the push of a button, with the ability to drill down into comp plans or pay calculations, so employees can see their rewards information on demand. And, it can show employees the clear link between their performance and their pay.
Technology Tip - Use communication to engage and motivate: It’s hard to underestimate the value of transparent communication around pay. Give your employees the means to view their total rewards, pay history, and compensation plans on demand. Rewards statements should show exactly how each pay element was calculated.
Technology can make all the difference
Technology can provide the reporting and analysis you need, and ease your compensation lifecycle overall. A dedicated compensation management system can dramatically improve operational efficiency, lower costs, enable execution of business strategy, and aid in attracting and retaining talent.
It doesn’t stop there. Next time we will look at some game-changing added benefits of compensation reporting. This might be a good time to subscribe to beqom’s blog to stay up to date on compensation best practices (see the box below).
In the meantime, use our free online Rewards Maturity Assessment tool to evaluate key elements of your compensation management capabilities and see where you might benefit from a dedicated compensation management solution.