Compensation Doesn’t Have to be Complicated!

Jar with money and plant growing

Compensation strategies vary based on a company’s size and industry. However, when switching compensation platforms or considering a revamp to your organization’s compensation methodology, one rule remains the same.

Keep it simple.

Compensation and HR professionals carry the heavy weight on their shoulders of administering and rolling out a compensation platform that empowers users to make meaningful compensation recommendations for their employees. While the budget factors, eligibility criteria and calculations are complex and ever-changing, it’s critical that your compensation solution remains straightforward and user-friendly.

Here are some key considerations:

1.) Plan for the masses

With any talent management process, your organization is bound to have exceptions. It may be that a particular business unit is scheduled to receive incentives at a completely different time of year, or perhaps employees on special assignments have traditional merit increases that fall outside of the guidelines for the rest of the company. But when it comes to the standard business rules managed by your software vendor, don’t let those extraordinary cases hold up your roll-out. Instead, define compensation plans that are meaningful to the largest groups of employees, and establish workarounds for the exceptions that can be accounted for with a well-defined, repeatable process outside of the application.

2.) Keep the user interface clean and straightforward

While it’s true that a lot of critical information is required to make accurate compensation recommendations, keep in mind this data does not all have to show up in the same place. All too often we see clients making the mistake of including too many data points on the screen in an attempt to squeeze the most out of their real estate. Though intended to be helpful, it ultimately ends up overwhelming end users, resulting in a poor user experience. Consider instead using easily-accessible complementary reports to provide that extra “nice to have” information without detracting from the user experience.

3.) Explain the data

Remember that your end users are often not compensation experts. They are traditionally supervisors or managers with “day jobs,” and the compensation process is something they only think about when they absolutely have to – typically, once or twice annually. With that said, providing managers with the key data points sometimes just isn’t enough. Consider educating compensation decision makers by offering supplemental resources and training material containing definitions and context around things like compa-ratio, reference points and position in range. Ultimately, it will encourage user adoption and empower them to make sound compensation decisions for their teams.

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