Blog SAP

Three Challenges in Compensation Management and How to Overcome Them

Compensation pros face many challenges, some of which can make or break an organization. They are alignment to business goals, managing risks, and employee communications.

Spreadsheets and legacy software force you to focus on administrative details, making it hard to stop and think about the purpose and impact of compensation plans. Having the right tools makes it possible to move beyond transactions to create compensation programs that both motivate your workforce and reduce your risks.

SAP SuccessFactors built its Compensation tools for the modern employee-enabled culture. It gives your planners the tools they need to optimize the impact of pay on performance.

Below are the three challenges in compensation management and how organizations can overcome them.

1.    Balancing Compensation Budget and Competitive Pay

Attracting and retaining top talent is critical to your organization’s success, but is sometimes restrained by the budget. Maximizing the impact of your compensation budget requires versatile tools that can help you model pay allocations within your limits. You need to see the results of decisions before you commit to the plan.

 SuccessFactors Compensation offers flexibility in setting up budget rules, enabling planners to allocate resources based on performance. It gives you the flexibility you need to incent performance and stick to the budget.

2.  Comprehensive Compensation Planning

A fundamental idea behind a successful compensation plan is that what motivates one employee may not engage another. A comprehensive plan is one that takes into consideration differences in job roles, contributions, and impact while maintaining consistency. Pay inequities can demotivate employees and expose your company to regulatory risk.

SAP SuccessFactors enables central oversight across the entire organization. It verifies compliance with policy through configurable workflows, validation checks, approval rules, and metrics. The calibration workflow supports objective decision-making based on defined criteria.

Compensation professionals can create multiple plans and assess equity within and across pay plans. The “Manage Families and Groups” option groups employees with similar job roles and competencies so you can assign the groups or individuals to a suitable compensation plan.

3.    Communicating Total Compensation

The conversation about compensation is more important than the numbers. Many managers have difficulty talking about pay decisions, and any perceived unfairness can impact performance and retention. Communications should include the entire compensation package, the imputed value of perks and benefits, and an explanation of non-monetary rewards. Employees need to see how much the organization values them.

Variable pay is a powerful motivator, but only if employees understand the relationship between pay and performance. SuccessFactors Compensation provides customizable rewards and recognition programs with the ability to define bonus eligibility, guidelines, and award levels.

A recent addition to this list is the monetary spot award program aimed at recognizing individual or team contributions. SAP SuccessFactors Intelligent Services further integrates real-time information from the spot award to external HR systems or company intranets through mobile devices

SAP SuccessFactors doesn’t just manage compensation but transforms how compensation impacts performance. It aligns its compensation strategies with the organization’s business goals and cultivates an objective, value-based environment for every employee.

Interested in learning more? Contact us at the form below.

à partager sur :

Contact our experts