Compensation Planning from A-Z…..And Beyond
- By: Tom McKeown
- January 4, 2016
I have been selling software for twenty-five years. I have sold desktop software, enterprise software, perpetual, SaaS, mobile apps, you name it. Regardless of the industry there has always been one common competitor, the spreadsheet. From VisiCalc, to Lotus 1-2-3, to Excel, if there was a need to automate a business process, people will first try and do it on a spreadsheet. Excel is the one that has endured to this day, and to see the applications that large public companies are entrusting to this insecure, standalone, decades old technology is mind blowing.
In actuality, when it comes to compensation management, particularly annual salary and bonus planning, the spreadsheet is not a bad first step. However, this is only practical for smaller organizations needing a limited number of fields, such as name, job title, current salary, percent raise, bonus, and total. That would be six columns, or on a typical spreadsheet columns “A” through “F”. As companies grow the application becomes infinitely more complicated with job groupings, prior year’s compensation, benchmarking data, multiple currencies, and complex bonus calculations. Before long you are well past “Z” and into the double letters of your spreadsheet, with columns you don’t even know why they exist.
Eventually the spreadsheet will have to be parsed for different divisions, and updated for multiple approvers as it evolves and is passed around in different versions such as “2015 Raises and Bonuses V6”. This of course all becomes very time consuming. According to Ventana Research, the average user spends on average a day and half per month maintaining important spreadsheets. Also, remember these spreadsheets are all standalone files that can easily be copied onto a thumb drive and walked out of the company.
However, it’s not all bad news. The reason being that all of the logic and workflow that went into creating your compensation planning spreadsheet can be used to transfer the application over to a centralized, data base application that’s similar but much more secure and easier to use. Compensation planning software applications, like that from Curo Compensation, operate in a grid-like format which is similar to a spreadsheet. However, much of the lesser used information can be placed in easy to access view cards, that go a long way towards reducing the number of columns to scroll through. Also since the application is hierarchically based and secure, everyone logs in to their level at the company with visibility only to their reports. When reviews are completed they are easily rolled up for approvals. There is also an administrator function where all rules are set on the back end, allowing frontline managers the time and focus to determine who deserves what compensation on their teams.
It’s unlikely we will ever get rid of the spreadsheet. Like the cockroach it will survive long after humankind. But that doesn’t mean our jobs can’t be easier and our businesses more efficient with modern tools. So, put your money into a proper compensation planning solution today.