What HR Professionals Need to Know When Implementing a Compensation Tool for your Pay Review Process

The annual pay review process requires planning, patience and most importantly, accuracy. By implementing a thorough and intentional strategy, companies can improve the efficiency and effectiveness of their review processes. While this concept is understood and appreciated, there remains the question of mechanics when formulating a strategy and choosing a compensation tool. What specific criteria are best considered when choosing a compensation tool for your company to utilize? When choosing an effective, adaptable and well-formulated compensation tool, be sure to:
1. Determine the system compatibility
This is fairly basic, however, companies sometimes get deep into decision making without first determining whether the software is compatible with their current systems. Some points to consider when checking for compatibility:
  • Even when using a web or cloud-based solution, such as a SaaS, ensure operating System compatibility for both PC and Mac. You can validate usability and compatibility through:
  • Demos of the solution using both a PC and a Mac.
  • Complete demos and testing in different web browsers and operating systems
  • More extensive, in-house testing using PC and Mac while using different browsers.
Work with IT to identify how often browsers are updated and when the next update is anticipated. Confirm with the vendor how often they update their solution to be compatible with the latest browser updates. Working with a company that is up to date and responsive is vital to ongoing success.
2. Get detailed information regarding currency conversion
If you have any dealings outside of your home country, currency conversion will be an often overlooked aspect of compensation software choice. Even if your company is not currently working with additional currencies, it may be a need to anticipate for the future. When considering currency conversion, ask the following questions:
  • How does the vendor handle currency conversion?
  • What currencies does the vendor currently support? If you have any unique needs, how does the vendor plan to handle currencies for your company specifically?
  • Will you, as a company, be responsible for providing monthly exchange rates? If so, how often will you need to provide this information? Will there be an integration completed to send the vendor this information seamlessly?
  • If the vendor will supply conversion rates, how do they determine exchange rates?
  • How will base pay (as well as the bonus planning cycle) present when managers are viewing the process in their own currency?


When asking these detailed questions, don’t stop at confirming global compatibility. Ask for a list of all currencies supported and in the works (if any.) If you are working on implementing a greater HCM, communicate with the vendor to ensure confidentiality and pay requirement awareness for different countries.
3. How will the solution perform with less than perfect job data?
As we all know, having clean internal data is important, but may not always be realistic prior to implementation. The lack of flawless data prior to implementation should not be a barrier to improving processes and systems, but with some solutions it may be. Take the time to thoroughly understand how the state of your specific data may impact the functionality of the system.
  • Collaborate with the vendor to provide a demo using a small set of your own sample data to understand the solution functionality with real data.
  • By using sample data specific to your company, you are more likely to identify critical items to be resolved prior to implementation and go-live of improved planning process.
4. Understand and communicate your reporting requirements
When considering a compensation planning tool, understand what reporting requirements are necessary to empower management and executive teams. Points to consider include:
  • How will the current job structure and compensation grades impact the data you are reporting?
  • What is the quality of the data you will be utilizing? System demos are often presented with (essentially) perfect data, designed to present the desired demo results. In reality, in-house data is less than perfect. Does this system still accurately and understandably report the information desired using “real” data?
  • Know what type of reports you require and ask for examples of such reports using your sample data. Note the steps to retrieve the data you are looking for and the process involved.
5. Be honest with the vendor regarding the current state of your data.
  • Understand how your current data will impact additional involvement and manual labor to produce the desired result.
  • Identify priorities for data “clean-up” prior to implementation. Or, decide what your limit is as far as how much preparation work is realistic for any particular system prior to implementation or Go-Live.
The major themes surrounding selection, regardless of your specific needs, are increased communication, thorough understanding of your own requirements, and increased and intentional testing. Proper planning and accurate system selection can help create a solid foundation for your company’s compensation planning and review strategy.
If your company is implementing a compensation system, contact CompTeam and we will help you select the right system and implement it to meet your needs.

About The Author

Heather HormellHeather is a systems and data, analytics expert.
She has 10 years of experience in creating and implementing employee onboarding programs which include aspects of company culture, industry trends, and facets of organizations to support employees through their new endeavors. In addition to new employee onboarding, Heather has developed and implemented department specific new employee programs, continuous employee development, and regulatory training
Heather’s experience also expands to oversee the implementation process of a variety of HR Systems including: Core HR Management tools, Compensation Management, Performance Management and Learning and Development. All of which support the intersection of HR and Information Technology to help increase efficiencies throughout the employee life cycle.
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