About the Author
Terry Coleman
Quality Assurance Manager & Senior ConsultantTerry works closely with the Product Manager and Development team to analyse software that requires testing, develop testing programs and lead in the testing of the software as well as working with clients to understand their business needs.
Review of Compensation Schemes and Enterprise Compensation Management Systems
Executive Summary
The compensation scheme is a key element that organisations have to differentiate themselves as an employer of choice in the competition to attract new employees and retain existing employees. Modern compensation schemes typically include fixed pay and incentive elements, and the balance between these elements makes each organisation's scheme unique. The fixed pay components are typically paid in cash, while the incentive payments can be paid as cash, equity (shares), or a combination of the two. The compensation scheme supports the broad range of Human Resources (HR) practices, such as performance and talent management, which are designed to encourage and reward employee behaviour that is aligned with and supports the organisation's goals.
Despite the significant advances in the functionality and innovation of software, the use of these applications in HR departments is limited, or used to manage in the same old processes rather than as a catalyst to introduce innovation and process improvement. This is especially true of compensation reviews, with many organisations continuing to use spreadsheets or similar low tech solutions to manage the review process, despite the obvious issues and errors that are associated with using such tools. Considering that the review is how the organisation allocates the compensation budget for the following year, budgets that even for medium sized (i.e. 1,000 employees) organisations start in the US$100's of million, the continued use of spreadsheets is concerning.
An alternative to the continued use of spreadsheets are Enterprise Compensation Management Systems (ECMS). This report will review the compensation review process, the elements that comprise modern compensation schemes, the various classes of ECMS tools that are available, and finally a Best of Breed ECMS solution.
Download the full paper "Review of Compensation Schemes and Enterprise Compensation Management Systems".
