The compensation management is a necessary undertaking for the functioning of any business – from a two person start up to a multinational organization employing thousands upon thousands of people. But it also has a nasty way of getting unnecessarily complicated when it’s not kept on top of. A breakdown in your compensation management process can make this necessary proceeding take weeks longer than it should, costing your organization time and money, as well as precious manpower. So how can you streamline the process and ensure it doesn’t become a chore?
To put is as simplistically as possible: you need to get everybody on the same page. Everyone involved in the compensation management process throughout the entire organization needs to have a plan in place; a protocol to follow when it comes time to put together the necessary data to complete the compensation management process. Without a plan in place, things quickly fall apart.
For example, if you have managers sending compensation and performance data on their direct reports up the chain of command – and have no kind of plan of action in place – the compensation process can turn into a waiting game. You’re waiting for them to get around to sending the necessary data, backing up the compensation process and costing precious time. And when they finally send the necessary information, what happens to it then? Without a disciplined approach in place to handle the compensation management process, a detailed plan, it languishes at each step on the approval chain until that person finds the time to send it through to the next person up the chain.
Now imagine this scenario across multiple departments, with multiple levels of employees receiving different grades and types of compensation (including performance/merit increases, stock options, and whatever else makes up your compensation mix). If your organization operates in multiple regions, multiple countries with multiple currencies and tax regulations then things get even stickier. Surely you can see the picture. The more complicated things get, the more possibility there is for time to be wasted.
The solution is to have a plan. Depending on how often your organization completes the compensation management process, set up dates letting everyone involved know exactly what is expected of them and when. Let each person on the approval chain understand their role, what’s needed of them to keep the compensation process flowing smoothly, and the time frame in which their role is expected to be carried out.
Without having a game plan in place things will all fall apart in short order. It’s imperative that, just like in a play or a sports team, everybody knows where they’re supposed to be, what they’re supposed to be doing, and when they’re supposed to be doing. Without this knowledge, this plan, everything else is chaos.