Technology s Role in Simplifying Salary & Incentive Compensation

Transcription

1 Technology s Role in Simplifying Salary & Incentive Compensation Peggy Rackstraw and Greg Belkin, Peoplefluent Innovation Evolution Mapped to HCM Market Requirements Predictive Data Anywhere, Anytime, Anyone HR & Line Managers Back Office Process Employee & HR Communication s Compensation Integrated Recruiting 2006 Broadest Talent Acquisition Suite - Hourly, Salaried, High-Volume, & Non Employee/Contingent Broadest Depth of Integrated Talent Management Solutions Learning Managemen t 2012 Applicant Tracking Manager Communications Contingent Performance & Succession High Volume Hiring Market First Integrated Talent Management Platform Onboarding Market First Cross EPM DecisionViews Analytics Market First Social & Fluency on the Collaboratio Move Emotional n Connection 1

2 Integrating Strategic HR with Tactical HR Complia nce Talent Mgmt / Talent Acquisition PERFORMANCE MANAGEMENT RECRUITMENT Vendor Management Offboard Requisition Affirmativ e Action Workforce Compliance & Diversity PRI Solutions Billing Sourcing SUCCESSION PLANNING COMPENSATION Payment Contingent Labor Sele ct CAAMS Div ersi ty LEARNING MANAGEMENT Onboarding Engageme nt Policy Manageme nt PayStat Software ERP Payro ll HRM S Partne r Performance Management Compensatio n Succession Planning Workforc e Planning Collaboratio n Talent Acquisition (Permanent and Contingent) Compliance and Diversity Learning & Development Software as a Service Reduce costs incluing innovation windows three releases per year. Flexible / Configurable Solution provides client control configurability Feature-Rich Modules Configurable modules include full feature capability in base solution investment. 2

3 Cutting Edge Compensation The latest Compensation tools strive to let organizations invest the right amounts in the right people at the right time and in doing so is a mission-critical component of managing the human dimensions of your organization. Why Focus on Compensation? 3

4 The Specifics: Compensation Success Automate Gain Efficiencies Reduce Errors Decision Support Budgetary Adherence Process Compliance Drive Better Decisions Tighten Linkages to Business Outcomes Demonstrable ROI Effective Compensation Focus 1. Designing the Right Compensation Plan Ensuring the compensation planning and execution process includes personal relevance, differentiated rewards, and pay for contribution. 2. Key Stakeholder Control Getting all stakeholders involved in the allocation of individual awards has become a standard best practice in effective pay for performance. Peoplefluent Compensation 3. Year-Round Interactions Organizations today need solutions that drive proactive investment in deserving members of the team to sustain them as engaged members of your organization. 4. Employee Engagement A fundamental premise of compensation programs is clear communication of the what s and why s of the plan design mechanics that serve drive mutual benefit for both the employee and company. 4

5 1. Designing the Right Compensation Plan Drive reward levels based upon measurable achievement of well defined, quantifiable goals with well understood benefit to the business Pay for Contribution Personal Relevance Differentiated Rewards Apply an appropriate mix of measurable accountabilities in accordance with roles and responsibilities for each individual plan participant Ensure that both organizations & individuals demonstrating materially significant over achievement are in turn receiving a materially significant allocation of rewards 1. Designing the Right Compensation Plan: Personal Relevance Depending on role within the organization, business performance will generally be defined by a combination of specific unit performance and the performance of larger entities. Individual Contributor Individual 50% Company 20% Team 30% Individual 25% Line Manager Company 25% Ensure participants are rewarded for the results over which they have the greatest influence, while recognizing that they are also citizens of larger entities and should support the total results of those entities. Individual 20% Team 30% Senior Manager Company 50% Team 50% 5

6 1. Designing the Right Compensation Plan: Individualized Incentive Programs The Goal-Management module may be used in conjunction with an incentive plan to engage employees and their managers in the incentive plan design process and allow for mixtures of incentive-eligible performance goals to be established in a collaborative fashion and on an individual basis. 1. Designing the Right Compensation Plan: Pay for Contribution Individual Performance Factor Multiple of at-risk portion of funded award Limits downside due to subjectivity Also limits upside for higher individual performers Target Opp. Company Result (25%) Team Result (75%) Discretionary Factor (60%) Non-Disc Amount (40%) Disc Amount Final Award $10, % 90% 150% $3,800 $8,550 $12,350 $15, % 100% 100% $6,150 $9,225 $15,375 6

7 1. Designing the Right Compensation Plan: Differentiated Rewards Threshold Target Award Maximum Performance Achievement Differentiation is achieved by applying discretion as a multiple vs. a specific award amount 1. Designing the Right Compensation Plan: Process Control Dashboard Plan administrators need tools to assist in both the design and execution of compensation programs. Many of these activities involve working with large amounts of data in a compressed timeframe. Visual tools help keep the process on track and allow administrators to focus on more value-added activities. 7

8 1. Designing the Right Compensation Plan: Handling Variability Matrix tables can be used to define target incentive opportunities across two axes within a single plan. Performance groups allow for an unlimited of goal weighting combinations to be defined within a single plan. 1. Designing the Right Compensation Plan: Budgetary Control Planning worksheets communicate real-time budget and spend information to compensation decision makers. A new discretionary budget adjustment capability will allow higher level managers to hold back or transfer funds as part of the compensation planning process. 8

9 2. Compensation Key Stakeholder Control Line Managers Subject matter expert charged with running the system day to day HR Business Partners Needs to understand plan designs and underlying data dependencies System Administrator Identify this person early in the implementation process 2. Compensation Key Stakeholder Control Line Managers HR Business Partners System Administrator Assist managers in the planning process Monitor overall process and alleviate bottlenecks Needs quick and easy access to different views and cuts of data 9

10 2. Compensation Key Stakeholder Control Line Managers HR Business Partners Ultimately charged with making final pay allocations Need to know what s expected of them and need data to drive quality decisions System Administrator Remember that they are the reason we are all here 2. Compensation Key Stakeholder Control Functional grouping of who does what within the organization. Company Business Unit Division Department Typically the basis for defining and measuring incentive metrics and/or funding. ACME Corp Product Professional Services Production Sales Global Consulting Manufacture Distribution Process Design HR Business Partners assigned to BU or Division leaders Audit 10

11 2. Compensation Key Stakeholder Control Define worldwide locations and apply geographic groupings as appropriate Company Region Country Location Typically the basis for establishing merit budgets Country HR provides process support and reporting & analysis ACME Corp North America EMEA U.S,A. Canada France Germany New York Los Angeles Munich Berlin 2. Compensation Key Stakeholder Control: Manager Planning Experience SmartGrid Worksheets allow for easy sorting, filtering, charting, exporting and personalization. Row-level alerts include context-sensitive links to additional coaching and/or policy content. 11

12 2. Compensation Key Stakeholder Control: Worksheet Designers All aspects of the end user experience can be configured via browser-based point & click tools. 3. Year Round Interactions Continuous monitoring, measurement, communication and feedback Potentially increase frequency of plan payouts (quarterly, monthly, etc.) Drive year round engagement for sustained performance Performance management should be a constant occurrence not a once-a-year routine! 12

13 3. Year Round Interactions Interim payment capped at 100% of target 3. Year Round Interactions Providing line managers with compensation funds as a tool to affect business outcomes. Reward recommendation can be initiated when and where it is most impactful. 13

14 3. Year Round Interactions: Rich Decision Support Rollups provide real-time information around budget adherence and any exceptions needing review. Populations can be grouped by different factors (hierarchy, location, level, etc.) Pay analysis provides graphical representation to easily spot outliers that may require additional attention 4. Employee Engagement what s expected what s in it for them how it s going Back it up! 14

15 4. Employee Engagement what s expected how it s progressing what s in it for them Back it up! What are the metrics that are driving program funding? Why are they consider critical to business success? How will these be measured? The more specific the better! 4. Employee Engagement What is my opportunity? How can I influence the final result? Is this a fair arrangement? what s expected how it s progressing what s in it for them Back it up! 15

16 4. Employee Engagement what s expected how it s going what s in it for them Back it up! Provide progress updates at regular intervals Monthly preferred, quarterly at a minimum Provide specifics wherever possible Give employees the power to forecast on their own 4. Employee Engagement A bonus should never be a surprise Well designed plans consistently pay out Nothing is more frustrating than uncertainty This is a business arrangement it s not about being nice what s expected how it s progressing what s in it for them Back it up! 16

17 4. Employee Engagement: Employee Compensation Statements Desktop widget allows employees oneclick access to any configured statements An optional acknowledgement flag will allow employees to indicate that they have viewed the report and agree to its contents Acknowledgement information can be accessed from reporting grids All reports generated via the desktop will be audited and viewable from the application logs 4. Employee Engagement: Employee Bonus Plan Viewer Peoplefluent Compensation Management Module leads in the execution of complex and highly metric-driven incentive plans. The incentive plan viewer allows employees self service access on a year-round basis to review plan designs including detailed information around target bonus opportunity and alignment to specific plan metrics driving final award payouts. 17

18 Some of the Most Complex Global Compensation Programs: Fluency on the Move Mobile Design Mobile design that creates a social emotional connection with Talent data. Natural Curiosity Ties into natural human desire for timely information about their employer, their peers and themselves. Social Connection Like the social experiences employees have on LinkedIn, Twitter or Facebook, invites people to interact, connect, communicate and learn. 18

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