Just as it has over the past five years, technology, over the next five years, will give human resources professionals far greater power and ability to wield more influence over their organization's operations. From day-to-day functions like performance reviews, goal management and recruiting strategy, technological innovations are helping transform human resources from a sometimes burdensome afterthought into a valuable piece of a company's business plan.
Just as technology has changed the way HR people and management view their work force, it also is transforming the way they compensate their work force.
After years of largely ignoring the massive benefits that can come from a concise, focused compensation system, companies finally are looking at compensation as a key business driver—and using technology to leverage it. Over the past few years, compensation tools—especially those used as part of a larger human capital management software suite—have become a more widely adopted way to cure the corporate aches and pains associated with pay planning. The future only holds wider adoption of these technologies, as more companies look for lean, agile compensation systems that tie into their larger human capital management plans-more specifically their performance management system by implementing a pay-for-performance compensation system.
By linking performance management and compensation systems, a company can get a clear picture of its work force—who is employed, what workers want out of their jobs, who's contributing, who's not—then pay employees accordingly. In doing this, companies essentially take their payroll, which is often a company's largest and most complicated expenditure, and turn it into a motivation tool, built into the infrastructure and culture of a company. Likewise, linking pay to performance eliminates the need for managers to rely on intuition and memory to recall an employee's performance highlights, goals and targets. A cutting-edge compensation system automatically captures an employee's information so managers can make objective, fact-based decisions.
Compensation information also can be used to examine other matrixes, such as how a company's employees are being paid compared to the larger market, if employees' goals are aligned with those of the company, and if workers are properly accredited or certified, among other factors.
A compensation system that leverages technology to reward workers based on merit and allows employees to grow and advance based on their skills, aids in employee retention, and helps motivate underperforming workers is a key part of both a company's overall HR strategy and business plan and is a critical piece to a business' success. It's the best internal investment that a company can make.