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Frozen Compensation Data? Let it Go!

There is nothing permanent except change. -Heraclitus

Imagine a HR system where you can't change or update any of the employee data. It sounds downright absurd, but compensation professionals know exactly what I'm referring to when I ask them, ?Do you freeze your data?? We're not talking about cryogenically freezing data in some mad scientist's lab or carbon-freezing your employee records à la Empire Strikes Back. I wish it were that exciting.

Let's step back and remember how the average company has been running annual compensation cycles for the last few decades. Typically a small team of courageous and meticulous compensation professionals extracts the necessary employee data from a core HRMS or payroll system. They then organize it into hundreds (or thousands) of spreadsheets, including all the excruciatingly exact budget pools for the managers to reference when rewarding their teams. Finally they distribute the spreadsheets to the managers who enter their recommendations and send them back for review and processing.

This process often takes a month or longer during which the compensation team has to enforce a period of ?informatio concretus? or ?blackout? where managers and HR cannot update active employee records in the core HRMS. Hires and terminations might be allowed, but for this period there are no promotions, no adjustments, no transfers, etc. Of course, all those changes are happening in the ?real world,? they just can't be entered into the system of record until the new compensation changes are processed.

Two primary reasons have been used to justify this process over the years:

1) The budgets in the spreadsheets are based on employee data as of a particular day and accrue as you move up the organization. Making any changes to the underlying data means you have to update budgets and every spreadsheet affected.

2) If changes were being made to the same employees in both the spreadsheets and the core HRMS, it would be a major pain to reconcile the two after the compensation cycle is completed.

Maybe you think I'm joking about all this, but I assure you it is very common. What's worse is that some of the newest HR technology on the market still doesn't deal with this painful process, because it doesn't allow you to use employee data as of a particular day for compensation planning. It only gives you the most recent data in the core HRMS, so you have to continue to restrict changes while compensation planning is happening. Wouldn't it be nice if there were another way?

Oracle's Compensation Cloud product was built using a series of staging tables that give our customers the flexibility to load data from various sources as of a particular day and control when that data is updated. This way managers and HR can still make changes to employee records in the core HRMS during an active compensation cycle. Those changes stay isolated in the system of record and are only brought over if needed for compensation planning purposes.

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This screen shows how a Compensation Administrator would control the data refresh process. Say you were in the middle of a compensation cycle and a large group of employees needed to be transferred under a recently hired IT Director. The new hierarchy could be automatically refreshed, along with all the necessary budget reshuffling, but it would not update any job or other criteria that might affect which employees are eligible for the active compensation plan. Notifications would also be sent upon the completion of this update, so affected users know they need to review the latest information. This additional flexibility helps cut down on the amount of ?version control? performed by HR and managers and ultimately a higher level of trust in the system.

Additional information on this process can by found by clicking on this link: Oracle Human Capital Management Cloud Using Workforce Compensation - Refresh Data Process: Points to Consider

All of our latest product information, white papers and customer videos can be found here at our website.

Also, don't forget about the WorldatWork Total Rewards Conference in Minneapolis this May 18th through 20th. Oracle Compensation Cloud will be on display at our booth (#749) and in a separate demo session on Tuesday, May 19 at 5pm. Jeff Haynes from Oracle's HCM Transformation team will also host a session with one of our customers, Herman Miller, on Monday, May 18 at 2pm.

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