TM - November 2007 - (Page 39)

applications. A unified system with multiple components, ERPs include everything from supply chain management to customer relationship management applications and HR modules. But modules can be very expensive to implement and maintain, and they often need to be rolled out one at a time. ERP systems also can be cumbersome to use and customize, and they require re-engineering of business processes to fit the ERP system standard. Because ERP packages predetermine and dictate processes, they often differ from the HR department’s current practices, requiring a compromise in functionality and a learning curve that might limit adaptation and overall effectiveness. According to analysts at Forrester Research, many organizations looking to align individual performance with corporate performance opt to deploy best-of-breed solutions via software-as-a-service (SaaS), a software application delivery model in which a software vendor develops, hosts and operates the application for use over the Internet. The result creates a winning proposition for HR, as its reliance on IT is further diminished. Additionally, with the SaaS model, organizations can get regular product enhancements directly from the vendor. What to Expect from Compensation Technology U.S. businesses have myriad laws and industry-specific federal legislations with which they need to comply, and organizations that do business in Europe need to meet requirements set forth by the European Union. Best-of-breed solutions enable companies to facilitate global compensation and more effectively comply with and adhere to various data-protection requirements. Once the compensation process is automated, there is an epiphany moment: Managers can better understand how the company wants them to pay employees. Guidelines exist within the system to lead the process, but managers still retain the flexibility to create exceptions to the rules and tailor reward programs to a particular individual or business unit’s organizational contributions. Exceptions can be captured in the system, and managers can explain budget variances to help senior management understand how and why decisions are made. Compensation technology also supports the identification of trends such as how people are paid in the current market. Using an automated compensation system, managers can better understand what components of pay resonate with the workforce, as well as the relative effect of pay elements such as stock plans, incentives, profit sharing and special recognition plans. Visibility into current pay trends enables managers to develop competitive variable pay plans that more effectively Because of the everchanging competitive business climate, organizations are looking to automate and fully leverage compensation plans, and fluctuations in business regulations further drive the need for better pay decisions applied consistently and with more oversight. Once the compensation process is automated, there is an epiphany moment: Managers can better understand how the company wants them to pay employees. drive desired behaviors. Compensation technology provides organizations with a standardized vehicle to not only capture and document compensation decisions but also to document and communicate that they are made fairly, accurately and within corporate guidelines. Technology also can improve process management as talent management professionals navigate different data-sharing and data-privacy regulations — As technology becomes more embedded in all areas of our work lives, those companies that take advantage of the benefits from automation, consolidation, governance and flexibility will have a competitive edge. Like the telephone, compensation solutions will continue to evolve and offer increased functionality. David Turetsky is the director of product management for compensation and performance at Workscape. He can be reached at editor@TalentMgt.com. talent management magazine www.TalentMgt.com 39 November 2007 http://www.TalentMgt.com

Table of Contents Feed for the Digital Edition of TM - November 2007

Talent Management - November 2007 Editor's Letter Contents Letters to the Editor Human Performance Leading Edge Learning Connections Viewpoint Finding Candidates with the Right Fit Turning HR Data Into Business Intelligence Compensation Technology: Drive Higher Performance, Gain Competitive Advantage The Art and Science of Influence Training the Ethical Workforce Making the Best Managers Application: Pre-Hire Testing Drives Down Employee Turnover at Advnace Auto Parts Dashboard: The Role of Learning Business Process Outsourcing Insight: Nationwide Insurance: On Employees' Side Advertiser's Index Editorial Resources Full Potential

TM - November 2007

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