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Hr compensation analytics
- 1. Part 1 –Relevance of Employee Benefits ALI SAEED
- 2. Introduction Employee benefitsare non-cash and indirect compensations which are paid to workers. These benefits are often issued to employees on top of their already derived wages and salary. The aim of these is to retain and attract employees Since employees really love benefits, they seek out recognition and appreciation for their contributions and hard work done. Since employees are the most valuable asset of companies, HR management values employees more than pay lip
- 3. Concept of BaseSalary Cost The base salary cost can be defined as an amount which is paid to an employee whenever a work is accomplished The base salary cost is different from salary, benefits, compensation, bonus, or other forms of rewards which can be availed to employees When a work is applied for, the base salary becomes the amount which will be offered to the worker for those specific tasks to be performed Base salary is similar to Gross income but both have a lot of differences
- 4. Importance of IncentiveCompensation Increase productivity Employees are driven by incentives to become more productive. Productive workforce improves the success of the business Reduction in the turnover of employees Issuing of incentives does not only ensure that employees are motivated but it also ensures that these employees spend longer time in office affairs Attracts new talent Research shows that incentives attracts 57% of candidates and acts as their highest consideration before a job is accepted Businesses are beginning to adopt measures of incentives in order to improve the attainment of the success of the business
- 5. Concept of EVA The Economic Value Added is a way of measuring the financial performance of a company from their residual wealth. In order words, EVA is the operating profit minus the cost of capital The performance of a company along with its management is assessed when when wealth and profits are created for the shareholders The calculations of the Economic Value Added is solely dependent on the invested amount and suitable for companies with rich assets If the EVA of a company is negative, this means that enough value is not generated from the funds
- 6. Concept of BSC A Balanced Score Card is used to evaluate employees based on different quantitative factors and metrics The objectives of what needs to be accomplished is communicated to employees using the Balanced Score Card A “Balanced” view of the overall performance of the organisation can be understood by the adoption of strategic measures through BSC Services, products, and projects are effectively prioritized by the use of BSC
- 7. Expatriate Compensation Anexpatriate compensation is an additional money paid to workers of a company abroad. These benefits can be a housing allowance or a relocation allowance, etc. The aim is to keep international employees abroad at a level of finance which is sufficient during their international work or task This acts as a package of compensation along with the normal benefits and salary offered in the home country of the employee The expatriate compensation attracts employees who are both interested and qualifies for international assignments and tasks
- 8. Introduction – Part2 Study shows that the issuance of benefits and compensation appeals to the employees within the organisation It helps to build a positive relationship with employees The effectiveness in terms of productivity and output is usually improved when compensation schemes and benefits are ensured The effectiveness of compensation can be measured using HR Analytics
- 9. Concept of HealthcareBenefits Healthcare benefit is a reward and talent attraction procedure utilized by organizations which provides different healthcare packages to motivate employees The reason why this is adopted by organizations is to make healthcare cheap for its workforce, motivate the employees, improve their efficiency and dedication, and other reasons Research shows that the job satisfaction of 53% of employees who received healthcare benefits was improved Study from 45 business organizations shows that healthcare benefits helped their organization to grow
- 10. Importance of HRAnalytics in Compensation Benchmarking Salaries: since hiring candidates is expensive and time consuming, the HR analytics enables HR managers perform better negotiations when hiring, and helps them to also understand how a candidate ranks compared to his/her peers and the market demand for that role Ensures Pay Equity: racial or gender discrimination can be eliminated with the adoption of HR Analytics which prevents some employee from receiving less due to their sex or background Tracking business goals: the goal of the business can be easily monitored and tracked to see if the organisation is working in accordance with its objectives, vision or compensation Compensation analytics assist HR managers to understand those key drivers to reward or retain the right talent
- 11. References L. (2021,March 18). Employee medical insurance: Why is health insurance important? - Pacific Prime. Pacific Prime’s Blog. https://www.pacificprime.com/blog/employee- medical-insurance-why.html SHRM. (2017, August 22). Designing Global Compensation Systems. https://www.shrm.org/resourcesandtools/tools-and- samples/toolkits/pages/designingglobalcompensation.aspx Cook, I. (2021, March 12). HR Moments Matter: 3 Compensation Challenges Solved With People Analytics. Visier Inc. https://www.visier.com/clarity/compensation-people- analytics/ Kantaria, S., Al Tamimi & Co, Barr, G., & Vesuvala, R. (2020, February 1). Thomson Reuters Portal (beta) Signon. UK Practical Law.
Editor's Notes
- #3 Job satisfaction is directly linked with the satisfaction of employees. There will always be a decrease in the level of commitment of employees if their satisfaction are not considered
- #4 Base salary is paid to exempt or professional employees who are expected to work for a set number of hours per week. Such workers usually are not required to track the number of hours they spent on work. And if they work overtime, salaried employees don’t get paid for it.
- #5 Incentives are a great way to ensure that employees within an organisation stay motivated to do their job to the best of their ability
- #6 Economic Value Added is the incremental difference in the rate of return (RoR) over a company's cost of capital. Essentially, it is used to measure the value a company generates from funds invested in it.
- #7 One approach to evaluating both financial and nonfinancial measures is to use a balanced scorecard Business organisations utilise BSC to look at strategic measures and traditional financial measures to get a more “balanced” view of performance.
- #8 Many expatriate compensation plans attempts to protect the expatriate from negative tax consequences by using tax equalization plan. Under this plan, the base income of the employee is adjusted so that the expatriates do not pay more on tax
- #9 Compensation includes salary, tips, wages, commissions and bonuses while benefits includes wellness programs, pension, day care, company car, frequent flyer miles, hotel points contests, and many more
- #10 Healthcare and social benefits may be defined as a set of services, as well as the effects of these services, aimed at satisfying the health and social needs of single individuals or of the whole administered community and considered as worthy of protection.
- #11 compensation analytics will help you understand the factors that determine the right pay, such as engagement levels, performance, manager effectiveness, recognition, career development, and even workload. Compensation analytics also unravels just how different an individual employee’s experience may be from their peers.