How Important is an Effective Employee Compensation & Benefits Strategy?

All businesses know how important it is to reward employees meaningfully. No one denies that an employee compensation strategy that combines competitive pay with recognition and rewards is most vital. This is for motivating employees, maintaining and improving productivity, attracting top talent and ensuring the retention of top talent.

So, why do so many businesses shy away from really investing in their compensation strategy? While it’s partly to do with just how important, and therefore daunting it is, it is also about how much investment it requires. It comes down to the strategic employee compensation plan and how complex it is to manage.

Why Do You Need a Superior Employee Compensation Strategy?

Achieving and keeping a competitive advantage is just one reason, albeit a really good one, to take the time to plan and manage your employee compensation strategy better. It is also useful in helping you attract, retain and motivate the best talent around. Having the right people in your organization can get you ahead of the competition. Thus, a superior strategy can actually help you align compensation with your business and HR goals.

This includes being able to better manage your budget in line with financial requirements and more importantly, allocating that budget to the right areas for optimal performance.

By ensuring that the right employees are getting the right compensation across the entire business, you can significantly improve performance and reduce poor decision making.  The correct compensation structure will improve productivity in the workforce.

Transforming The Way You Allocate Employee Benefits

This all sounds great, but how exactly are you supposed to achieve this? Aligning your compensation and benefits strategy with business and HR needs is no small feat, not without the right HRMS. Fortunately, SAP SuccessFactors Compensation provides the answer. Instead of using unwieldy spreadsheets from business, finance, and HR to try and compare goals and performance, SuccessFactors provides an easy to use interface with access to all the data and amazing visualisation you need to make better compensation & benefits structure decisions.

Budget Modelling and Alignment

SuccessFactors provides a simple, flexible and intelligent way to model compensation plans. Using data from finance, HR and other disparate sources, you can simulate different budget scenarios to help you determine the right compensation model to meet your business needs. There are additional intelligent recommendations within the dashboard as well. These can help you bring compensation guidelines in line with budgets creating a consistent blueprint for the whole company that meets both financial and HR demands.

Once you’ve found the right compensation model for your business, you can further run bonus forecasts throughout the year that model base salary, bonus, and long-term incentive plans. This helps to improve financial planning and achieve the perfect balance between competitive pay and affordability.

You can adjust all your compensation models and change compensation guidelines in real-time whenever you need to analyse the impact immediately. With the press of a button, you can push new compensation models live. This can give you the agility you need to achieve a real competitive edge and keep up with changing business needs.

Management Made Easy

It’s also easy for managers and lower levels to ensure that benefits and bonuses are kept within budget and in line with business needs. Managers can easily plan and adjust compensation in line with guidelines so that businesses can be sure their topline objectives and needs are being met.

With access to a wide range of compensation metrics, relevant employee data, and calibration tools, managers can ensure fair and objective pay decisions. Configurable workflows, approval rules, and validation checks completely simplify compensation planning and reduce risk, so the business ensures that the compensation structure remains equitable across the entire organisation.

Real-time Rewards

Once your strategy is aligned with your finance and HR goals, the power of the cloud means that with SuccessFactors you can manage and implement rewards on the go. Combined with SuccessFactors Performance & Goals, you can track employee progress and get instant access to achievements as and when they happen from any device.

SuccessFactors Compensation makes it easy to allocate rewards in real-time. You can assign awards categories to specific performance behaviours that you want to encourage and then allocate the right rewards to these specific achievements making each one more meaningful to employees.

Employees also benefit from the transparent, easy-to-access interface with their very own compensation dashboard. From here they can get a clear overview of their compensation statement and their total rewards package so they feel informed and valued. Accessible cloud software also makes it easy for managers to communicate employee benefits so everyone stays up to date with compensation changes.

Want to know more about rewarding and motivating your employees while still meeting tight budget demands and big business objectives? Book a demo with us today to see how SuccessFactors Compensation could help you.