It’s no secret that here at HRN we practice what we preach regarding best practices in compensation administration and employee performance management. For example, at HRN we utilize Compease for establishing salary grades and comp levels based on current and accurate market data. We regularly update Compease with new and current compensation data compiled from the most trusted and respected sources.
In my regular review of HR news and information sources I came across a live online survey on hr.blr.com asking this simple question: How often does your org. audit its compensation plan to ensure fairness and equity in employees pay?
The reason this question stopped me in my tracks was because it is one of the first questions our compensation consultants ask prospective clients when discussing their compensation plan and strategy. So I was quite interested in seeing the results. And what I saw was surprising; especially when you consider that all repsondents are HR professionals who should know better.
The good news is that 30% do audit their comp plan at least once each year. Hopefully these are all Compease clients because this annual update and review function is included in the solution. But what really did surprise me is that an equal amount; nearly one-third have never audited their compensation plan! Never? The next highest number of respondents at 17% selected the ‘less frequently than 3 years’ option. Now I understand this is an unscientific and uncontrolled online poll but even with a margin of error of 10% it’s still a significant finding.
How can a company remain competitive and justify their bottom line if they have no true understanding of what other companies of the same size, in the same industry and geographical region are paying staff members for specific job functions and taking into account experience, education, and performance? With no researched and current comp plan in place a company is at risk of either overpaying employees, resulting in lower profitability, or underpaying key contributors and risking high attrition and turnover. Turnover costs the company money to recruit, hire, and train new staff.
When I see data like this I am motivated as a marketer to do a better job in communicating the benefits of Compease to HR professionals.
Having an annually updated and reliable comp plan in place does not have to be difficult, expensive, or time consuming. HRN has the solution. It’s called Compease. Give us a call and talk to a compensation professional or check it out online at here. Or better yet . . . attend a demo.