Article by Annabella Poon
on 5 Aug 2015
When it comes to organisational spend, employee compensation takes the biggest share of the pie.
According to a survey conducted by SHRM, for most organisations including the Fortune 500, compensation averages nearly 70% of operating expenses. When so much is spent on compensation, it’s only natural for organisations to devote more time and manpower in making sure their compensation strategy is right: 1) that you are not over-compensating people and 2) you are not short-changing your best employees.
‘Compensation Review’ sounds like a simple concept but if you ask any line manager or anyone from HR, they won’t hesitate to tell you that the usual compensation review process is a hectic and time-consuming one. Why? Simply because the tools employed are often inadequate, making the review process far too complex and taking up much more time than it needs to.
1/3 of organisations lack a centralised system that can accurately define and track total compensation
Ask yourself these 5 simple questions:
As the total number of employees increases overtime, so does the time and effort needed to complete the salary review or planning process.
The more managers you have to report salary information to, more separate files will be created. What happens if certain managers work in multiple regions – are you able provide the accurate information for these people?
Is your employees spending too much time on generating reports and not focusing on other work that could bring more value?
Who has permissions to this data? When reports are created and passed on from an employee to the next via email, how safe is it?
No matter which of the questions speak to you most, if you are looking to become more strategic about the compensation review process, your organisation must be able to overcome these hurdles. The compensation review process isn’t about poring over confusing spreadsheets or removing a manager’s focus away from his tasks.
Make life easier and more productive for yourself, your HR and your managers. If your organisation is spending more than 1 week on the compensation review process, its high-time you say goodbye to your archaic review methods and look into simplifying the process.