Using HRIS for Compensation Management - HRIS Payroll Software
compensation management

Using HRIS for Compensation Management

By: Dave Rietsema
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Compensation management is an integral process in any business and should be seen as much more than simply paying employees a set rate for an agreed upon workload. Employees depend on their income to support their lifestyles and families. As such, compensation management can play a big role in acquiring top talent, keeping employees satisfied, and ultimately in keeping employees.

Organize Variable Pay

When employees are paid a range of salaries based on seniority, merit increases, and job titles, it can be difficult to keep everything organized. Most HRIS allow you to create employee profiles that will allow you to see an employee’s hourly rate or salary and start date at a glance. Being able to simply view all employees’ compensation in one place may help you to spot discrepancies and potential opportunities.

Use Performance Management Tools for Decision Making

HRIS often come with robust performance management tools that can be used to capture behavioral information and performance data. This information can be attached to the employee files and linked to peer-to-peer reviews and self assessments. Having all of this information in one place can make it much easier to make decisions regarding merit increases and other issues affecting compensation.

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Adjust Compensation Instantly

After you have decided to adjust employee compensation, HRIS can be used to plug that information into many different areas where it may be pertinent.

If an employee’s role has changed, they may require different permissions and job codes, payroll should be adjusted to reflect salary changes, and benefit offerings may change. HRIS may automatically adjust these or may require just a few clicks to make the necessary changes.

Improve Pay Transparency

Pay transparency is an issue that has come forward in different ways in recent years, with many employers seeing the benefits in sharing pay rather than hiding it. A HRIS can be used to effectively communicate base salary standards and raise opportunities in a way that is fair and open for all employees.

By sharing succession planning information and linking it to training and development opportunities, employees can even see where they are and where they have the potential to go within the company. By allowing employees to see these possibilities and how they link to potential salaries, employees get a true view of their advancement opportunities – which may help them to envision their futures.

Use Alerts to Spot Errors and Issues

It may be possible to set up HRIS to flag potential errors and problems with compensation. If an entering error places an employee at a higher salary than was intended, using alerts can help to mitigate the problem before the employee is paid at the erroneous rate or has to deal with the disappointment of being returned to the correct rate. Conversely, alerts can save employees from accidentally being paid less.

Additionally, alerts may be set to make you aware of situations that could be seen as unfair or even discriminatory. Reporting could show that a disproportionate percentage of employees of a certain demographic are over or under a certain rate regardless of seniority. This could allow you to review the situation in more detail to identify and correct the problem before it becomes a legal issue.

By using your HRIS for compensation management, you can optimize your human capital management using tools that are already at your disposal.

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