System can tie all the loose strands together to form a powerful total rewards rope
The concept of total rewards is a powerful tool. While employees are trying to ensure they receive the best value for a day’s work, HR professionals are trying to show their organizations are employers of choice that provide much more than just a salary.
The trend has been to communicate all elements of the employment relationship, including compensation and other value-added products or services provided by the organization, as a means of showing employees the total value of their rewards.
A view of an employee’s total rewards, if delivered effectively, can drive employee behaviour and align it to the goals of the organization. New developments in technology have given organizations the tools to effectively and easily communicate all of the elements of their total rewards programs in a way that is personalized and targeted to the individual.
Driving behaviours to reach goals
In a competitive market, where organizations work hard to keep good employees, compensation has evolved into more than just pay and benefits. But the value of benefits such as learning and development programs, work-life programs, cafeteria programs, fitness programs and gift-matching programs are not always obvious to employees. By detailing the true total rewards to an employee in a clear and meaningful way, employees will have a much better appreciation of what their organization provides for them.
In an effort to help employees focus on the goals of the organization, many rewards are becoming performance based. Having a central location to host all of the various reward details linked with real-time performance-related data gives employees a current value of their performance rewards, various stock plans and other reward programs at the time they log on to view them.
How technology brings it together
Communicating the value of total rewards can be challenging from a data perspective. It is not uncommon to have anywhere from five to 10 data feeds related to each of the rewards programs an organization offers. This data may include base salary and bonuses, stock compensation, retirement plans, health-care coverage, life and accident insurance, training and development opportunities, work-life benefits and other rewards.
The trick is to effectively bring all of this information together into one central location where an employee can access the information she needs, when she wants and in the way she wants it.
A summary print statement can be printed on demand by employees — either to share with a spouse or partner or to keep a paper record. The summary statement compiles all the key data on the site into an easy-to-use reference. This information could also be downloaded into a spreadsheet to share with a financial planner. Some organizations have also “pushed” or distributed a print summary statement to employees without online access at work.
The Internet provides easy access, any time, to employees who want to see their current total rewards information. Technology developments have allowed total rewards information to display real-time data so employees can see the true value of their rewards at the time they log on to view it. This is facilitated through use of Web services. XML (extensible markup language) and SOAP (simple object access protocol) messaging technologies have provided a mechanism to more effectively send data between various data sources. This allows data to be easily combined into a central source.
Forums like the HR-XML Consortium, a non-profit organization dedicated to the development of a standard suite of XML specifications to enable e-business and the automation of HR-related data exchanges, is pointing to exchange of real-time data as being a real solution in the near term. Current offerings include a mix of XML real-time and batch services with an eye towards a total Web-based strategy.
In addition to current data, a value-added element for a total rewards solutions is targeted messaging and alert functionality. Personalized messages can be sent to specific employee groups to inform employees about various rewards-related issues such as open enrolment, plan selection deadlines, stock option expiration, RRSP contribution eligibility and more.
Another useful aspect is the ability to incorporate interactive modelling tools. These tools can help employees determine both the current and projected values of the total compensation package. For example, users can determine their bonus opportunity based on achievement of specific goals. Or, they could model the growth in their equity portfolio based on assumptions about future stock price performance.
Technology options
ERP (enterprise resource planning) vendors have limited capabilities in this area with little to no communication value. These solutions typically cannot accommodate external data sources and rely on the organization’s HR and information technology resources to host and maintain. There are outsourced solutions in the market that provide organizations with an integrated view of rewards while eliminating the headaches of hosting and maintaining the system. These outsourced solutions can be functionally rich applications that integrate with existing HR technology to add value without adding staff or draining resources. By leveraging best in class technology, a platform approach and HR domain expertise, organizations can deliver more value, at reduced costs and minimal involvement.
Organizations are always searching for the niche that differentiates them from other employers. Total rewards solutions have become a marketing communications tool in the effort to do this. Revealing the complete rewards package for an employee in a single, easy to access solution gives the employee a better appreciation of what the organization offers. This information becomes a powerful tool for changing behavior within an organization and helping to create a more performance-based culture. As a result, employees see exactly how they are being rewarded and may decide to work harder towards the organization’s goals because when the organization does better, they do better.
Jeff Koven leads product strategy for Hewitt Associates’ eCyborg HRMS solution. For more information contact [email protected] or visit www.cyborg.com. Look for his next column in the March 8, 2004 Guide to HR Technology.
The trend has been to communicate all elements of the employment relationship, including compensation and other value-added products or services provided by the organization, as a means of showing employees the total value of their rewards.
A view of an employee’s total rewards, if delivered effectively, can drive employee behaviour and align it to the goals of the organization. New developments in technology have given organizations the tools to effectively and easily communicate all of the elements of their total rewards programs in a way that is personalized and targeted to the individual.
Driving behaviours to reach goals
In a competitive market, where organizations work hard to keep good employees, compensation has evolved into more than just pay and benefits. But the value of benefits such as learning and development programs, work-life programs, cafeteria programs, fitness programs and gift-matching programs are not always obvious to employees. By detailing the true total rewards to an employee in a clear and meaningful way, employees will have a much better appreciation of what their organization provides for them.
In an effort to help employees focus on the goals of the organization, many rewards are becoming performance based. Having a central location to host all of the various reward details linked with real-time performance-related data gives employees a current value of their performance rewards, various stock plans and other reward programs at the time they log on to view them.
How technology brings it together
Communicating the value of total rewards can be challenging from a data perspective. It is not uncommon to have anywhere from five to 10 data feeds related to each of the rewards programs an organization offers. This data may include base salary and bonuses, stock compensation, retirement plans, health-care coverage, life and accident insurance, training and development opportunities, work-life benefits and other rewards.
The trick is to effectively bring all of this information together into one central location where an employee can access the information she needs, when she wants and in the way she wants it.
A summary print statement can be printed on demand by employees — either to share with a spouse or partner or to keep a paper record. The summary statement compiles all the key data on the site into an easy-to-use reference. This information could also be downloaded into a spreadsheet to share with a financial planner. Some organizations have also “pushed” or distributed a print summary statement to employees without online access at work.
The Internet provides easy access, any time, to employees who want to see their current total rewards information. Technology developments have allowed total rewards information to display real-time data so employees can see the true value of their rewards at the time they log on to view it. This is facilitated through use of Web services. XML (extensible markup language) and SOAP (simple object access protocol) messaging technologies have provided a mechanism to more effectively send data between various data sources. This allows data to be easily combined into a central source.
Forums like the HR-XML Consortium, a non-profit organization dedicated to the development of a standard suite of XML specifications to enable e-business and the automation of HR-related data exchanges, is pointing to exchange of real-time data as being a real solution in the near term. Current offerings include a mix of XML real-time and batch services with an eye towards a total Web-based strategy.
In addition to current data, a value-added element for a total rewards solutions is targeted messaging and alert functionality. Personalized messages can be sent to specific employee groups to inform employees about various rewards-related issues such as open enrolment, plan selection deadlines, stock option expiration, RRSP contribution eligibility and more.
Another useful aspect is the ability to incorporate interactive modelling tools. These tools can help employees determine both the current and projected values of the total compensation package. For example, users can determine their bonus opportunity based on achievement of specific goals. Or, they could model the growth in their equity portfolio based on assumptions about future stock price performance.
Technology options
ERP (enterprise resource planning) vendors have limited capabilities in this area with little to no communication value. These solutions typically cannot accommodate external data sources and rely on the organization’s HR and information technology resources to host and maintain. There are outsourced solutions in the market that provide organizations with an integrated view of rewards while eliminating the headaches of hosting and maintaining the system. These outsourced solutions can be functionally rich applications that integrate with existing HR technology to add value without adding staff or draining resources. By leveraging best in class technology, a platform approach and HR domain expertise, organizations can deliver more value, at reduced costs and minimal involvement.
Organizations are always searching for the niche that differentiates them from other employers. Total rewards solutions have become a marketing communications tool in the effort to do this. Revealing the complete rewards package for an employee in a single, easy to access solution gives the employee a better appreciation of what the organization offers. This information becomes a powerful tool for changing behavior within an organization and helping to create a more performance-based culture. As a result, employees see exactly how they are being rewarded and may decide to work harder towards the organization’s goals because when the organization does better, they do better.
Jeff Koven leads product strategy for Hewitt Associates’ eCyborg HRMS solution. For more information contact [email protected] or visit www.cyborg.com. Look for his next column in the March 8, 2004 Guide to HR Technology.
