Modern HR in the Cloud Blog

Reducing Human Intervention from the Compensation Allocation Process

July 16, 2014 By: Anadi Upadhyaya

Compensation is a sensitive topic for both employees and businesses, so when you talk about reducing human intervention from this process, it may not instantly generate favorable responses. But this post is not about removing human intervention, it's about checking your readiness to reduce human intervention with the help of process automation. A well know fact is - automation doesn't replace us, it just makes us better.

I believe that you may have already automated time consuming manual and day-to-day compensation tasks with the help of technology. This post highlights the next level of automation that I touched upon in my previous post "Datafication of Compensation Distribution".

Datafication will provide you more returns on your investment as it will derive value from the integration of various human capital management modules. Let's take a case of allocating a bonus or lump sum payment to your workforce based on their target (goal) achievements. When you are ready with a goal score and a decision is to be made based on the score only; you don't really need your managers to allocate money manually. You should be able to fully automate this distribution as manager intervention will not add any value here. Same can be applied for performance based salary changes whenever you are ready with your allocation metric.

You must evaluate cases for partial automation where full automation is not feasible. Scenarios such as metrics based compensation budget distribution and providing allocation guidelines to your managers based on your compensation strategy fall in this category.

If you can identify cases where decisions can be taken based on data points, it will allow flawless execution of your compensation strategy. Compensation managers will still be contributing on the cases where decision needs to be subjective and their judgments as well as skills are really required.

Data driven automation will take your compensation planning to the next level. Clear strategy, technology support and a well-thought change management plan in place will help you achieve more returns on investment.

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