Here at HWC, I firmly believe that there are already enough challenges for companies when looking to implement compensation software without having to also deal with some of the many myths that naturally occur in the world of IT (and often business in general to be honest).

Here are just a few that I have come across in our industry.

1) "Best Practice is the Best Solution" I firmly believe that Best Fit rather than Best Practice should be adopted by companies. Best practice may result in you needing to completely change the way you manage your compensation processes. Don't get me wrong, this may be a good thing sometimes, but it should not be the rule. The technology should fit your processes NOT the other way around and so you shouldn’t have to compromise on the solution you adopt. The type of solution should be what best fits your requirements. The point is to not start with the solution – you should work out what you need first and let the solution come from that.

2) "What You Want = What You Need" People will quite often know what they want; however, despite best intentions, in my experience this doesn't necessarily translate into what companies actually need. Start with the end result and work backwards, NOT the other way around. Don't start with what you already have. Visualise what success looks like; know what your aims and objectives are; ask yourself "Why?" – you may not even need a system at all! A meeting of minds of all potential stakeholders as early as possible will help mitigate changing requirements half way through the process and it will also help to ensure that the aims and objectives are for the whole project team, not just for one individual. More time upfront means far less time in the long run, which means far less expense!

3) "Everything Must Talk to Each Other" Integration seems to be a big buzzword in compensation software at the moment and that you shouldn't even look at solutions if you aren’t able to integrate them into say your payroll software, your HRIS etc. I take a slightly different opinion. It should all come down again to what is right for you and what you are looking to achieve with your compensation solution you are looking to implement. Integration may be right if your population is 20,000 employees around the world; it may not be if you have 200 top executives whose data is of utmost sensitivity.

4) ""Rip and Replace" is Necessary" Too many times I hear from reward professionals I meet that they have had to rip out all existing systems to replace them with their new compensation software solution. Whilst in some instances this may be the best option if it is indeed a complete replacement, it shouldn't be seen as the only solution. More often than not, there is functionality, data or process manipulation that is carried out in other places that may be perfect for what is required. So why get rid of it? All or nothing doesn't have to be the only two options on the cards – existing platforms and systems can be assimilated to provide the most appropriate solution to fit your needs.

5) "We Must All Live in the "Cloudy" World of IT" The misconception is that many people have gotten the term 'Cloud Computing' confused with simply offering the software online, commonly referred to as 'Software as a Service' (SaaS). Without meaning to be too controversial, this is possibly a purposeful muddying of the water in the marketing world to make something old look like something new. People need to be clear on the differences and what they mean to them. What is right for you will depend on a lot of things and you will definitely need to take into account what your security requirements are when making this decision – likewise, you alone will not be able to make this decision. You will need to work with your IT Department in order to meet all guidelines and requirements that they may have. This will need to be brought into the equation when selecting your solution provider – how far can they meet your requirements and if there are compromises to be made are these acceptable to all stakeholders?

There are of course many more misconceptions about compensation software than just those listed above; if you are interested in hearing about these and others in more detail, then please come and visit us at e-reward's "Spotlight on Compensation Planning Software" event in London on 14th October 2014 – www.e-reward.co.uk/software.

This principle has come up in conversation recently with both a new contact and a long standing existing client. Whilst I am sure in principle most people would agree and avidly support the concept, reality is for many quite different as these real-life examples will demonstrate.

It was refreshing to have discussions with a prospective client who actually wholeheartedly supported our desire to delay the implementation of a new, bespoke remuneration system in favour of spending a good few months really qualifying and agreeing the requirements up front. With many different iterations not only expected but encouraged, they recognised that whilst the temptation was to have a system that would considerably improve their day to day share plan administration with immediate effect, there would invariably be more issues in the long-run, if short cuts and assumptions were made in the most important phase. How otherwise would we know we were building what was actually really needed?

This subject came up again with an existing client – in a conversation of a more operational nature, relating to the need to check reports and how many checks should be done before it was deemed enough had been carried out? Was it ok to accept that 90% would be ok but 10% would not? How large would the potential ramifications be as a result of this tolerance?

And yet we all do this and often accept it as ok. For me, this wasn't necessarily anything new, however in an ever-increasingly busy and hectic life; there is daily temptation to fall into this trap.

Indeed, as the same client pointed out in an email to me – this trap is often experienced in our personal lives. How many of us have not rinsed the dishes BEFORE putting them in the dishwasher only in the morning to find baked, hard cheese and tomato sauce on all of the plates? Suddenly a 10 minute job has become a 30 minute one with a far lower quality for the efforts put in.

Without wanting to teach people to suck eggs, as someone involved in the industry, I cannot emphasise the importance of this philosophy enough. When looking at potentially implementing compensation software, no matter how "simple" you may think your requirements are, more time upfront means far less time, energy and cost in the long-run I guarantee it.

I reiterate, just because we all know and agree with this principle doesn't necessarily mean we rigidly adhere to it in practice – whether at home or in the office! Nevertheless, how many of us admit to still paying the price for when we didn't and instead we fell prey to the "happy ears" trap of rushing those early parts of the process?…

This post is somewhat later than I had hoped, but back in May I attended WorldatWork's 2015 Total Reward Conference in Minneapolis. Having been a 1st time attendee last year in Dallas and being so very impressed with the conference streams, subject matter and sheer honesty of all of the speakers and fellow attendees, to say I had high expectations for this year's event would be an understatement of the century! I am pleased to say that this year's conference did not disappoint and I left Minneapolis really motivated and buzzing with ideas that we are now implementing to help continue to add value in everything we do for our clients. Great stuff.

However, that's not what I want this post to be about. I heard some really insightful statistics, viewpoints and general remarks and so I thought it might be nice to share some of them with you. I hope I have quoted people correctly, if not, I apologise!

"Executive compensation is the most highly regulated and scrutinised area of our industry" – Anne Ruddy, President, WorldatWork.

“The single biggest problem in communication is the illusion that it has taken place." George Bernard Shaw – Irish playwright and co-founder of the London School of Economics.

"Employees want to feel they have a voice, are valued and regularly receive feedback." Dr. JP Pawliw-Fry.

"There is more and more complexity in executive compensation…"
And
"There is more and more complexity with payout structures too, for example, many companies are using more than just Threshold, Target and Max as their payout levels now." – Linda Steffen, Farient Advisors.

“Every plan design choice has an impact on the expected payout value of performance based awards and the probability of an executive achieving the goals. Awards should be set with certain expectations of achieving each payout level. All of this also needs to be matched with the executive's perceived value of the award."
And
"Don’t add additional complexity to your remuneration plans if the outcome doesn’t really change by doing it." – Jack Zwingli, Institutional Shareholder Services.

“Displaying too much data and information resulted in some of the key functionality being missed by users."
And
"Employees didn't previously understand the company's compensation programmes properly – systems may make the information more readily available but they still need to understand what they are consuming." – Michael Murray, Hermann Miller.

"I'm looking for a workplace that's fun, flexible and innovative" – taken from Aon Hewitt's "Inside the Employee Mindset – Key Findings on What Differentiates, What Rewards and What Communicates" paper.

"Long-term incentives provide the incentive to remain with the company, i.e. retention but these often counteract incentives to maximise short-term performance."
And
"Managers are better motivated to pursue innovation when they are given more incentive compensation with longer vesting periods."
And
"Bonuses provide incentive to attain usually short-term goals, which are sometimes asserted to be at the expense of longer-term value maximisation." – Steven Balsam, Ph.D.C.P.A. – Professor of Account and Senior Merves Research Fellow, Temple University, Fox School of Business and Management.

"Our Counsel: Don't Set the Bar Too High.”
And
"A car only has enough horsepower to pull a certain specification car. If you keep bolting things on, you will eventually run out of gas…" – Darrell Cira and Steve Seykora, Mercer.

And so to San Diego in 2016 here I come!

Claire Bedwell
Client Services Director, HWC

Admittedly this is a bit of a late reflection on an event held at the end of February but I came away from ifs ProShare's Celebrating Excellence event with a couple of impressions that stuck in my head and then spiralled off into a million other trains of thought. I will try and summarise just a few here.

Passion was a particular impression I came away with – let me explain. It was really inspiring (and dare I say it somewhat refreshing) to see first-hand genuine and authentic passion in the company speakers. Those that stuck with me in particular were Pat Simms from Rio Tinto, Anchal Kausal from Rackspace and Shelly Ribbons from Henderson Global Investors. A lot of time, energy and cost is invested in trying to foster and encourage employee engagement in the reward and benefits they receive from their employers but does anyone think about how the engagement of the HR / Reward Team and its internal and external partners are perceived by the employees?

To me, the aforementioned company presenters clearly demonstrated their engagement and passion through their communication to their audience. But can we all honestly say we do the same in how we communicate internally?

We all know we live in a world where reward and benefits should be tailored to the specific factors that will Attract, Retain and Motivate individuals. What attracts Bob wouldn't necessarily retain Joan but it might just motivate Anna if it was communicate in such a way that she would respond to. It's nothing new but it might just be that we are finally witnessing and more importantly recognising and accepting the breaking down in companies of internal facing vs external facing teams. Is trying to improve every step of the "employee" lifecycle any different to actively seeking to improve each step of the "customer" journey? As Sir George Bernard Shaw famously said: "the single biggest problem in communication is the illusion that it has taken place."

And so for me, the over-riding theme from ifs ProShare's event was the importance of "fit for purpose." Whether this was at the business strategy level of aligning reward policy with company objectives or whether it was right down to how an employee can pick up the phone to someone to discuss his / her options at share plan maturity. Inactivity and indecision are the biggest dangers – doing the same thing in anything over and over again and expecting different results is Einstein's definition of insanity. Today’s "fit for purpose" may very well be passed its sell by date tomorrow – fluidity and flexibility is therefore key in ARMing our talent pools. As it should be in how we manage and administer their performance and reward throughout their employee lifecyle.

Have I raised any ground-breaking new ideas? No. Do we all know and believe that reward and its communication to employees should not be designed around stereotypes and a one size fits all approach?

Absolutely.

And yet instead of utilising technology to facilitate this bespoke approach, too many companies are having to bang a square peg into a round hole and make a rectangle box when what they should be doing is asking the question: "what shape will best support our reward policies both now and in the future?"

Rudyard Kipling has brought us many things in life – his poetry and stories have likely influenced us all in some way, even today, long after we first stumbled across him probably sat at a wooden desk in a classroom, looking out of the window and wishing we were anywhere else but there.

Fast forward more years than I care to admit and here I am, sat with his poem "The Elephant's Child" in front of me, just reminding me of the importance of each and every word of it.

I keep six honest serving-men
(They taught me all I knew);
Their names are What and Why and When
And How and Where and Who.

We could all take our pick out of the many, many challenges in reward that we are currently facing. Nevertheless, we all know that beneath the surface no two problems are the same –– as Maslow infamously said "It is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail."

One person's iceberg is another person's Everest. One person may have only just started their climb, whereas another is already wearing the t-shirt. One reward team’s "nice to have" is another's "absolute must." And yet it is so easy to find ourselves starting with the solution without even knowing truly what the problem or challenge is – how often do we ask ourselves if we honestly know what success looks like?

And so I find myself coming back to "The Elephant's Child" time and time again.

I can't help but notice that a 7th is missing – the "Which"– well, I guess history can’t spoon feed us everything – some things have to be left to us to decide for ourselves don’t they…?

I listen to a lot of people. Directors mainly, working in Reward, in a multitude of different industries. I hear a lot about the tidal wave of legislation on the horizon and how the management of reward and remuneration gets more and more complex every day. Even more annoying when it really doesn't need to. It's of genuine interest to me to hear how various issues and challenges are dealt with using only guile, determination and a perilously large excel spreadsheet. I am in awe of those reward teams that make it all happen effortlessly it seems, like a swan gliding on the surface of the lake, delivering the pay review, the share vesting and the increased engagement levels without even breaking a sweat. That's exactly how it is, right?

No?

For those who demand so much from the Reward Team, but don't actually know what happens behind those doors, scratch the surface and tell me what you find.

I often see good people stressed by the fear and the consequences of what happens when that 150 column spreadsheet finally collapses under the strain. It is often the case that simple issues escalate to become major problems and then the attempts to solve them also escalate accordingly.

I am reminded of the NASA approach to the problem of making a biro work in zero gravity aboard the space shuttle. Without gravity, the ink wouldn't flow. Millions of dollars, time and resource were spent in the name of research to resolve the issue. Triumphantly, they announced that the problem had been solved!

The Russians had switched to pencils.

Problems may be complex on the surface. But solutions do exist.