Assess the advantages and disadvantages of using a Web-based compensation tool versus a client-server based or stand-alone PC-based system and then give your opinion on which system would provide the most value to an organization’s stakeholders. Include three (3) facts to support your opinion.
e-Compensation represents a web-enabled approach to an array of compensation tools that enable an organization to gather, store, manipulate, analyze, utilize, and distribute compensation data and information. The advantages of using a Web-based compensation tool versus a client-server based or stand-alone PC-based system include the automated approach that replaces tedious manual processes to make any compensation program easy to manage and virtually error free. Web-based compensation tools do not require installation and updating which saves a lot of administration work and can be access from anywhere with the Internet. The data in Web-based compensation tools is stored remotely and requires little disk space. It also becomes more important that Web-based compensation tools are cross-platform and work on different Operating System.
Whereas using a client-server based or stand-alone PC based system would need an administrator to administer, maintain, develop and implement policies and procedures for ensuring the security and integrity of the client/server database, and also resolving any database issues. However, Web-based compensation tools have some serious disadvantages. The most important problem is their poor user experience, because of the performance problems and browser limitations. Another disadvantage of the Web-based compensation tool is that the remote server could be compromised disclosing private information. The fact that the Web-based compensation tool requires Internet connection can also be a limitation.
Although Web-based compensation tool seems to have more advantages than a client-server based or stand-alone PC based system, in my opinion, client-server based would provide value to an organization’s stakeholders. Three things initially attract people to web-based over client-server: they are easier to deploy and upgrade, demand less IT support, and require less hardware. While it is true that web-based deployment and upgrades are easier, client-server technology actually delivers far superior benefits and long-term cost savings. Client-server software affords a richer, crisper user interface that outperforms browser- or web-based software in terms of the number of clicks and the ease of use.
The client-server based provides set-ups and can be altered without disturbing the clients, while the other two systems require accessing every peer in the network (www.client-serverbased). For example, the client server arrangements aid security requires efforts, because there are fewer servers, limiting the number of persons with access to them and increasing security features of the servers. The two-tiered model enables file sharing between the client and the users. Justify the use of e-Compensation tools in the job-evaluation process from the perspective of HR, management, and the employee.
Through e-Compensation tools organizations can adapt to shifting demands for information. e-Compensation tools enhance the practice of designing and administering compensation programs in a dynamic and competitive environment in three key ways. First e-Compensation tools can increase access to critical compensation information without the need for sophisticated or dedicated IT staffs and sophisticated technology infrastructures. They can simply access key information electronically on an as needed basis. Second, e-compensation tools enable round-the-clock availability of meaningful compensation information to senior managers, HR managers, and employees. Third, e-compensation tools can streamline cumbersome bureaucratic tasks through the introduction of workflow functionality and real-time information processing.
Job evaluation is the process of methodically establishing a structure or hierarchy of jobs within an organization. This is based on a systematic consideration of job content and requirements. The purpose of the job structure, or hierarchy, is to provide a basis for the development of a wage structure. The job structure, however, is only one of the determinants of the wage structure, with other factors becoming increasingly more important. Job evaluation develops a plan for comparing jobs in terms of those things the organization considers important determinants of job worth. e-Compensation tools enhance the practice of designing and administering compensation programs in a dynamic and competitive environment.
HR views the use of e-Compensation tools in the job-evaluation process as a means to streamline their processes and reduce administrative burdens. HR can electronically distribute them to target employees or managers via a corporate intranet. From management perspective e-Compensation can assist in reducing HR administration and compliance costs, help compete more effectively for global talent and provide real-time metric to allow decision-makers to spot trends and manage the workforce more effectively – managers can review a list of proposed merit increases for his or her direct reports.
Managers and employees have access to key information to make completing a job analysis or job evaluation project relatively easy. Employees are able to gain access to data which is improved by utilizing e-Compensation to make critical decisions. The use of the e-Compensation tools empower employees with a collaborative employee compensation application that shows their complete compensation package in an intuitive format and provides the tools they need to plan their financial futures.
Evaluate three (3) benefits and three (3) drawbacks of a centralized approach to managing merit pay programs compared to a more decentralized approach.
Merit pay refers to the process of determining employee compensation (base salary or bonuses), in part, on the basis of how well each employee performs at work. A centralized approach bases an employee’s pay rate on the value of the job/role held, the degree to which the employee has mastered that job/role and how well the employee has performed over time. The most apparent advantages of centralization are an organization’s ability to closely control operations, provide a uniform set of policies, practices and procedures throughout the organization, and better use the knowledge of centralized experts. Companies also adopt different approaches to compensation administration responsibilities.
Some rely on a centralized approach where the design and administration of compensation programs are performed by a single company department. Some rely on a decentralized organizational structure that allows faster decision-making and better adaptability to local conditions and context. In the decentralized approach managers across the organization forecast the pay increases they expect to recommend in the coming year to retain their key employees and to remain competitive.
The decentralized approach can make it difficult to transfer employees from one department to another and may bring about a lack of internal consistency. The drawbacks to the centralized approach are that a compensation program may suit general corporate needs, but not individual department needs, communication between different computers is not easy, resulting in configuration problems, and it does not provide built-in knowledge management capability that would guide or empower managers to make their own decisions.
Suggest three (3) types of integrated analytic features that are needed for compensation planning and decision support in e-Compensation systems. Integrated analytics brings together information from a company’s ERP, customer relationship management, human resources, financial management, supply chain and e-business systems, and enhances it with advanced analytics, empowering the company to react more quickly to a rapidly changing business environment. Integrated analytics better integrates an organization’s information assets across the value chain, delivers role-based business intelligence to the information consumer in a personalized manner, and includes advanced analytical models focused on decision making.
Many human resource information systems, however, do not yet provide integrated analytic features needed for compensation planning and decision support, such as the ability to also see related real-time competitive market salaries. Some integrated analytic features needed for compensation planning and decision making are analytic engines for data enrichment and analysis, analytic applications such as Budgeting, Planning and Balanced Scorecard, and integrated analytic applications that provide process-specific analytics and allow the developers to add more features based on user needs. In order to survive and win in today’s market, ERP vendors have recognized that they must have improved information delivery and analytics as core components of their products.
The rapid flow of information has increased the need for executives and managers to “keep their fingers on the pulse” of their companies and to be able to easily access timely, accurate information. It is clear that the market is moving away from the realm of custom and nonintegrated applications and into pre-delivered products that are closely linked to ERP systems. Assess the barriers that prevent organizations from realizing the potential of Web-based internal equity tools and propose three (3) approaches to overcome those barriers.
Internal equity refers to establishing the relative worth of jobs inside the organization. It is hard to determine the value of the information before you pay. Organizations can find free web-based services such as HR-Guide’s job evaluation tool. There are several factors that hamper organizations from fully realizing the potential of web-based internal equity tools. First, most of the tools are not generally integrated across software programs in the market that support the design and maintenance of internal equity policies and practices, relatively few are currently both integrated and web-enabled. Second, the challenge facing organizations in implementing these e-compensation tools is that these tools are only as good as the data they access. Third, proper training is required to ensure user acceptance and competent use of the technology.
Fourth, some users find data entry tends to be slower and less flexible using web applications than client-server-based software, particularly with nonlinear processes. Finally, while web-based software tools increase access to and distribution of information, the quality and efficiency with which decisions are made still remain ultimately with the manager. There must be organizational commitment to gather, manage, and maintain accurate and relevant data. Organizations need to obtain an integrated web-based compensation software solution that automates and integrates internal equity and external equity software applications and can be used stand-alone, over an intranet, or over the web on an outsourced basis. Lastly, organizations need to implement software and invest in training programs.
Recommend three (3) strategies that HR managers can use to evaluate the quality of market data (surveys, benchmark salary studies, etc.) that they receive from outside sources.
Paying people fairly is good for business. Underpay, and employees will eventually look for a better offer. Overpay, and the payroll budget and profitability will suffer. That is why companies use market data to research the value of their jobs. HR managers use the latest market data to get accurate data relevant to positions within their organizations expertise. Gathering background information is critical in building a pay structure from scratch to articulate the compensation philosophy, clarify concepts that define the fundamental beliefs about the structure, and design and develop the strategy. To determine the prevailing rate for a job, organizations can benchmark jobs against compensation surveys that are detailed and specific to the organization’s industries and regions. A good compensation survey uses standard, proven methods of data gathering and statistical analysis to determine how much companies pay for a specific job in a specific industry.
Commercial and association surveys,
Use at least four (4) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources.