Compensation & Benefits Decision Support System

Let’s recognise a few ground realities here.

Work related to changing compensation structures of a few hundred people requires a lot of patience, and it is not the most exciting work.

Add on that the fact that it is confidential work – and hence cannot be delegated to everyone.
Mistakes are easy to make – there is much eye for detail required here. On top of this, changes need to typically be made in a rush-fire mode.

For the executive layer, first and foremost, the system provides an easy mechanism to make changes, and yet have accountability trails. It provides accountability of seniors by ensuring that an online approval process takes place. In addition, easy tools like ‘export to excel’ etc are provided so that data exchange with other systems can take place.

The real benefit, however, is for the senior managers in HR. The system provides a decision support system for aspects like:

• Discrepancy Analysis – for example, for all employees who joined us as trainees with no experience, after 2 years – are there any discrepancies? Or have all moved to the expected grade and designation and salary level?
  

• More Discrepancy analysis – based on grade-bands, designation-bands, experience-bands etc. – which reveal whether there are any exceptions to the norm as far as compensation patterns are concerned.
  

• Defining rules which make it easy for you to make changes to existing compensations of employees – for example, if you need to revise the compensation due to any reason, the system prompts you with the rules defined vis-à-vis what is the applicable compensation structure for the grade.
  

• Fitment for new joiners – when you need to place a new recruit into an existing structure, you need to be able to see with grade employees with a similar background fall into, and which compensation bracket. Based on this you can decide whether you can place the candidate into the correct existing compensation bracket, or whether you need to make an exception and place him in a higher or lower bracket.
  

• Doing a what-if-analysis – For example, what if we were to change compensations
  

• Finally, each year you need to revise compensation structures based on performance ratings achieved by employees. This is easier said than done. First of all you need to get the ratings from the Performance system (manual or otherwise), and then you need to define norms – for example, employees in Grade 1 who got a rating of Excellent, should get an increment of 20%. Having decided these, the system helps you make en-masse proposed changes, which you can finalise, approve, and effect.
  

• The most important decision support tool is where our system provided you with all employee details, their performance details, and current compensation structures. Then it allows you to play around with the percentage increases to be affected for different performance ratings, and seethe impact on the wage bill. After having taken decisions, you can go ahead and effect the changes on individual compensation structures.

This solution is very useful in companies where the employees is more than 300, and HR teams are small, but there is great emphasis on ensuring there are minimum expectation mismatches on the compensation front.