HRBoss Blog

Business Leaders & HR: Trying to get compensation right?

 

 

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:

  1. How many employees do you need to plan salaries for? 

    As the total number of employees increases overtime, so does the time and effort needed to complete the salary review or planning process.

  2. How many managers will be using the reports and which groups of staff are they responsible for? 

    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?

  3. How much time is the compensation review process taking your organisation? 

    Is your employees spending too much time on generating reports and not focusing on other work that could bring more value?

  4. Are you confident that you are keeping sensitive data such as an employee’s salary secure? 

    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?

  5. Do you have a visible, consistent, and transparent review process to help the organisation make fair compensation decisions? 

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.

Download the whitepaper: The Strategic Guide to Compensation Review & Planning