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Do People Pose a Risk to your Rewards Process?

I spent a significant portion of my early career heading up the HR technology area at companies like BP and Amgen. At that time, there were far fewer planning solutions on the market so we often had to build them in-house. One thing always in the back of my mind throughout all of my experiences in this industry was the need to maintain these solutions, and for annual process tools, the need to repeat the setup effort each year.

Building tools that made the administration easier took longer, was a bigger investment, and during crunch season, put a strain on us to finish in time. But as these toolsets ended up being used long term, I found the additional investment was well worth it.  The challenge has always been to plan for a future that you may not yet see. In my role, just like you, the key factors to keep in mind for a successful process are risk levels and their impact on accuracy and deadlines.

What do risk levels, accuracy and deadlines have in common?

People, or more accurately, individuals can be a major risk in delivering on your compensation planning process. It is a simple fact that some people can accomplish a task far quicker and more effectively than others. There are those who struggle to get things across the finish line, and there are those keys players who always deliver. With that in mind, when considering the setup of an annual process tool that will be around for years to come, ask yourself, “Will I have the right people available at the right time each year?” If you are counting on technical support from outside your own department, what will you do when other important projects target the same strong resources you are relying on?

Another scenario tied to people is institutional knowledge or, more concerningly, the loss thereof. People leave. They may stay in-house in another role or move on to another company entirely. If they are integral to the setup and maintenance of your process tools, your only hope is that they left early enough for you to have time to locate a suitable replacement before you go live. That’s not so bad when they leave 6 months before your deadline, but what if they leave just when setup is starting?

If you are reliant on individuals who are no longer available to you, expect things to take longer, even when deadlines can’t be moved. Time constraints then lead to rushed efforts and long hours, both of which are primary contributors to mistakes. Mistakes impacting the accuracy in a salary or bonus process undermine one of the primary reasons you adopted a compensation management system in the first place.

How do you manage this risk?

I know of three methods.

  1. Throw money at it. You can hire consultants with the skills you need to get the desired turnaround time. If your budget can take it and the timeline is tight, this may be the smartest option.
  2. Develop detailed process documentation. Set up step-by-step instructions like a recipe to success for others to follow. As long as there aren’t frequent changes to your process, this can get you there. However, I’ve seen the thick binders that clients keep to document the configuration of their compensation planning tool. These tombs of knowledge take a long time to step through each year, and the mind-numbing effort could be prone to human error if their role is prone to frequent interruptions. You must also remember that as enhancements are made to the software, or if you modify your process in any way, someone needs to maintain the process documentation to reflect these changes.
  3. Pick a solution that mitigates this risk. Ensure that the setup and administration in the software are so intuitive and easy that this is no longer a risk to worry about. This method greatly reduces the exposure of dependence on an individual. A product such as CompAccelerator that ensures a shallow learning curve can provide consistency in the process even as personnel change.

Method #3 to pick the right software was put to the test with a client who had a complete turnover of their compensation department. A new college hire, a compensation analyst with no prior experience in the industry, had a global process configured, loaded and launched in under three weeks. This demonstrated that the level of experience and time required does not need to be tied to institutional knowledge or select experienced individuals.

Tools engineered to be intuitive and easy to administer improve productivity in all aspects of the process. There is no binder maintenance required as in method #2. An intuitive, easy administration broadens the field of people who can deliver on your process within the timeline, negating the spending required in method #1.

When managing human risk, you are directly impacting accuracy and deadlines.

When considering solutions, be sure to factor in the human side of the equation. Will the complexities or ease of setting up this software increase or decrease my risk of human error in the future? We know by reducing the timeline pressures, process mistakes can be mitigated. The result is a direct impact on improving the level of accuracy.

There is a cost at stake that could be more than just dollars. Configuration mistakes destroy accuracy and missed deadlines destroy credibility. This is a career risk no one should need to carry.

My experiences make me partial to managing this risk at the solution level. I did this as a practitioner for many years. It allows for the maximum amount of contingency control in the long term and protects your budget against unforeseen changes in the future. Making complex dynamic processes easy to manage took more effort to engineer a solution, but the payoff for our clients has been proven many times over the years. As a result of building to this standard, Dartican has emerged the market leader in Time-to-Value for compensation solutions. Care to see what that could look like for your organization? Contact us today for a demo.