Abstract
Managers need tools that assist them in administering increasingly complex compensation programs. Fortunately, certain web-based technologies can now minimize administration expenses while maximizing the effect on employee behavior. Tools that automate compensation planning, off-cycle compensation administration and importantly, persistent employee communication are gaining rapid acceptance. This article discusses the history of compensation planning and the factors that have led to the increasing complexity of the process. It then details the business case for automating compensation planning, including ROI considerations, decision support, compliance and data privacy issues and global compensation issues for multinationals. The importance of system flexibility—critical because business needs evolve over time—is also addressed. The article concludes with implementation tips for automated compensation planning systems and information on how to select a system that best meets the needs of any given organization.
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