Automation is changing the landscape of HR. Where we once relied solely on spreadsheets and completing tedious tasks, we now have access to tools that capture and use data seamlessly. Because of recent improvements in integration techniques, data from one application can be shared with another, allowing HR to increase efficiencies.
One example that all HR professionals have to worry about is understanding the impact of merit pay on the budget for the following year. Companies that perform annual reviews use the scores from those reviews to determine merit increases. Spreadsheets and Word documents are often used to record this data. The drawback to using those tools is that HR is still emailing specific spreadsheets and Word documents to individual managers/employees, manually keeping track of what went to whom and when, not to mention waiting on replies from each individual. If reviews are late, someone must keep track of that and reach out to the tardy individuals. Once all of the reviews are back, HR has to go through the process again with merit increase documentation, which has all of the same challenges. The vast amounts of time this process takes, in addition to the security risk involved in emailing sensitive data, is reason enough to make a change.
Given situations like this, it’s no wonder organizations want to automate their processes. Because a performance management application can be tied to a compensation administration application, performance management scores can feed directly into the budget planning (and other) tools. There are several advantages of this to consider:
- What if the executive team would like to model different merit increase policy ideas (such as changing merit increase percentage potential for higher performance) based on current employee performance, and measure the impact on the bottom-line? There is really no end to the different scenarios that could be explored and HR risks looking like a bottle-neck if accurate information can’t be provided quickly.
- What if your company chooses to provide discretionary merit or bonus dollars (outside of standard policy) to managers? What if they use all their funds? What would the impact be?
- How could HR better focus their time if employee pay statements could be generated on demand, based on performance scores?
- What if the company has (or decides) to have a complex merit increase or bonus formula that is also based on company performance. How could reports be created to give you an automated look for where those numbers are for different employees or departments?
Let’s take the power of integration a step further. What if you could not only have your applications talk with each other, but could also cross-reference that data to look for trends by means of a visualization tool? Such tools allow you to look at subsets of data very quickly. For example, by looking at key data like performance levels or compa-ratios, within certain departments, you are able to find trends that may not have been visible when looking at the company as a whole. You may have acceptable compa-ratios across your organization but find that some departments have higher and lower compa-ratios that offset each other, thus giving the false impression that compa-ratios are acceptable. These insights can be given to specific managers, who can use the data to guide their decisions.
The HR world is moving toward automation. It will provide your team with increases in speed, accuracy, and specificity. Pick applications that will best support your unique needs and let your vendors find ways to tie them together. The ROI will be quickly perceived, through time savings, cost savings, improved processes, and increased morale.
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