Why you need to shift from MS-Excel to a new-age compensation technology
The Indian Hotels Company Limited (IHCL), one of the biggest hospitality chains in the country realized that automation through the adoption of the right technology was the key to achieving efficiencies in their HR processes. Ritesh Pratap Singh, Vice President – Organization Effectiveness & Development, shares, “To achieve our business priorities, the organization felt that there was a need to enhance teamwork, strengthen the processes and drive fairness, consistency, and transparency in the organization.” For this change to happen, the biggest roadblock for the organization was to change the mindset of the employees and also the leaders at various levels in the organization. Comp and Ben became an essential tool for driving desired behaviors and enabling the line managers to take ownership of the talent in the organization.
To make the compensation planning process more efficient and scalable, the company realized that they needed to move away from using spreadsheets for adopting best-in-breed modern day technological tools. Spreadsheets beyond a scale have limitations in transparency and auditability for Compensation and Benefits and Performance Management, by HR and other stakeholders. According to a recent HR Technology Research Study conducted by Aon in partnership with People Matters around 63% of organizations still, use Excel for managing their Compensation & Benefits process. In a manual salary revision process, more time is usually spent on data collection, instead of the data analysis. With the right automated solution, the administrative responsibilities of the Comp process are significantly diminished, which allows compensation professionals more time to draw insights from the data.
As per Ritesh, Automation helped in saving time on administrative processes and instead enabled compensation professionals to focus on strategic activities.
To understand more about how automation in Compensation process using best-in-breed technology was able to bring efficiencies for IHCl, People Matters decided to have a candid interview with Ritesh. Below are the excerpts of the conversation:
Q: What are the compensation priorities for your organization this year?
A: Our compensation priorities are linked with what the organization wants to drive as a part of its business strategy. The strategy builds the foundation for the behaviors that we want to encourage in an organization, and those behaviors become the priority for Compensation & Benefits (C&B). E.g., The kind of incentive programs that you want to put in place, the type of pay increase as per merit you to want to implement, how will you appreciate and recognize, etc. All of this together becomes the reinforcement mechanism to drive behaviors in the organization. Hence, our C&B priorities have been very well articulated from a business perspective.
We moved away from an individualized performance management system to bring our focus to the team. The focal point is the team which has to work together and delight all our stakeholders (one of the most important being our guests because they will come back and help us stay in the marketplace). So we moved away from individualization to drive the business priority.
Q: What were some of the roadblocks that your team faced to achieve the priorities mentioned above?
A: The biggest roadblock that one faces is to do with the alignment of mindsets of the employees with the changes taking place. People drive business in our organization and our industry. If you have engaged employees, they will create those amazing experiences for your guests who will make sure they come back again and again, and that is how you win over the competition. Engaged employees lead to superior business performance- that is what we are focusing on. However, the challenge here is how do we make sure that the line managers take charge of the engagement of employees instead of this task being relegated to HR. While we become more team-oriented we still had to differentiate talent, and hence it was clear that instead of HR becoming the owner of talent, HR should become the facilitator, and the line managers should become the owner of the talent. HR should play an instrumental role in building the capability of line managers so that they should not only feel a sense of profound ownership of their expertise but take crucial decisions regarding them as well.
Q: Did you find any challenge in bringing that shift?
A: When we started looking at this change of empowering managers, one of the challenges that we faced was building capabilities to own talent and provide them with all the information regarding the nuances of managing talent. E.g., How do we provide a basic understanding of the market benchmarking and talent pegging in the compensation range, etc. and then standardize the process through which a line manager takes charge of talent and provides a recommendation for the talent which can then be captured and implemented. So, our biggest challenge was when we moved to this new way of managing talent; we did the entire management of the transformation process using excel sheets. Though we transformed the process, the overall confidence in the effectiveness and efficacy of the process was missing due to the enhanced transactions and error probability. So, that was the starting point, and that’s when we felt that if we have to make the process effective, we need to look at standardizing the process to make it effective and scalable and support with automation and technology solution. And that’s when we started looking out for a technology partner with a scalable platform.
Q: Any other roadblocks in C&B that technology helped you overcome?
A: The most significant change that technology brought was a mindset shift. Earlier the conversations between the employees and managers were restricted, and the communication related to talent was diverted to HR. However, now the manager performs the compensation planning him/herself and decides how to use the budget allocated to provide an increment to his / her talent. The managers now own the decision and have meaningful conversations which in turn makes employees feel secure and trusted. This has led to the effective closure of the process. Earlier, without technology, there was a communication gap between the manager and employees which often led to misunderstandings and incorrect assumptions being formed.
The other challenge that technology has solved is that while we were trying to standardize the process, automation has got the level of errors considerably down. It has also cut down the process by 1/6th of the time. We can utilize the saved time in doing more value-added activities.
Q: Any new features or expectations you have from upcoming technology?
A: The next step will be how we can leverage the platform to build capability. This should not be operated at the transactional level. The technology should expand our managers’ capability to make important decisions regarding talent.
If the system can provide all possible data points, enabling a line manager to make an informed decisions around critical questions like, ‘how much to pay’, ‘what is the right pay’, and ‘how do I differentiate, etc., that is going to be the key for the evolution of the platform. Currently, the technology provides us with data about the difference between the high performing candidate and average performing candidate. The technology has to move beyond that, and it has to look into the fact that challenges will be going to be different from a future business perspective.
I think linking talent management practices and compensation and benefits and strengthening that relationship will be the future for these platforms.
Q: Do you want to add anything before we conclude this interview?
A: I think the managers need to adopt technology to own the talent and express that ownership to drive Compensation & Benefits management. The platform enables the compensation process to evolve from being a transactional process to a talent enabler, connecting both talent management and compensation so that whatever decisions made regarding compensation are aligned with the business needs and talent.
(The Indian Hotels Company Limited (IHCL) adopted RemLink to evolve their C&B capabilities. If you are interested in knowing more about RemLink, leave your details here).