Have you felt dread creep in as you approach a merit cycle? The thought of wrangling stakeholders, ensuring they have the right information, and keeping their proposals within policy and budget (for months at a time) is enough to rouse frustration. You’re not alone.
That’s why we built OpenComp Comp Cycles — a new tool in the Activation Hub (our compensation software solution to ensure that people leaders successfully activate compensation planning in the field via people managers, recruiters, and employees). Comp Cycles is the first tool that links HR and people managers in a shared, fully transparent workspace populated with all the information and insights they need to run better, faster, and more effective merit and bonus cycles. The result is an outstanding time savings of up to 50% for people leaders and 25% for people managers per cycle, and a 16% increase in annual retention.
Explore the post below to learn how Comp Cycles benefits people leaders, managers, and employees.
The status quo (and why it’s not working)
Two groups of stakeholders are deeply involved in merit cycles:
- People leaders keep adjustments on track and on-policy by monitoring status updates, explanations behind proposals, budgets, timelines, DEI analysis, and more. Plus, they coordinate approvals, ensuring people managers have the correct employee lists and salary ranges, and reconciling proposed budgets.
- People managers need clear cut and accurate information when they create proposals, like salary ranges, historical adjustments, peer salaries, budgets, guidelines, and milestones. Without it, they risk making ineffective or costly decisions based on intuition.
Ideally, these groups have real-time access to accurate compensation information. (OpenComp calls this “adaptive pay transparency” — when the right information is available to the right people, at the right time.)
Unfortunately, frustrating merit cycles are the norm today. Communicating the rules, data, and tasks involved in a merit cycle is difficult, and there’s no clear and easy path for people leaders to gain full visibility into the progress and decision-making of budget owners until proposals are submitted. This lack of transparency means people leaders bounce between emails, meetings, and messengers trying to figure out “where things stand” and what people need.
Merit and bonus cycles are typically run out of spreadsheets and tracked manually in ongoing rounds of meetings, emails, check-ins, and messages. This leads to slow, frustrating, and bumpy workflows that result in stress, frustration, and dissatisfaction. That often turns into attrition, HR wasting its time on administration, and other sunken costs.
We built Comp Cycles to solve these problems with transparent, collaborative workspaces, workflow automation, and point-of-decision insights and data. Compensation software for the win!
Align your team in fully transparent workspaces
People leaders and people managers need a better way to work together. They need a compensation software tool that provides:
- Clarity around merit cycle guardrails and eligibility
- Bilateral communication at decision points
- Full visibility into the status of each stakeholder’s tasks
- In-the-moment budget tracking and reconciliation
- Visibility from the proposal level down to each employee’s adjustment
OpenComp’s Comp Cycles compensation software tool provides people leaders and people managers with this information, at the right time. It gives people leaders ongoing visibility across the adjustment process so they can keep every task and proposal on track, without hours of work in emails, messages, or meetings. They can also help stakeholders course correct using in-platform communications.
Budget owners get a single workspace that contains all the information they need to complete a merit cycle, including timelines, budgets, pay ranges, eligible reports, and any guardrails set by their people leader.
This radical transparency leads to a wealth of time saved:
Comp Cycles reduces the hours spent on merit cycles by up to 50% for HR leaders and 25% for people managers.
It’s an unprecedented leap forward in creating a clear, fast, and smooth merit cycle where HR leaders don’t rely on spreadsheets or work management platforms to initiate and drive the process.
Improve accuracy and speed with automated workflows and approvals in compensation software
Every people leader wants to be able to set up merit cycles easily and keep them moving as quickly and smoothly as possible, through final approvals. Setting the process in motion and trusting that it will run seamlessly even with stakeholders involved — whether there are five or 585 of them — is invaluable to people leaders. But they simply haven’t been able to do this until now.
Comp Cycles brings speed into your merit cycle with automated workflows and approval processes. It leverages your HRIS information and automatically allocates the right employees to the right managers as you select budget owners, saving time during your set-up and eliminating errors. Additionally, customizable eligibility rules let you modify assigned employee lists without digging into spreadsheets to identify who is and isn’t eligible for inclusion in a merit cycle. With Comp Cycles, you can set up your merit cycle in just minutes.
This ease-of-set-up doesn’t end when your merit cycle starts. Comp Cycles lets people leaders set rules-based approval flows for each budget owner. In Comp Cycles, you can either set up one master approval process for all your budget owners, or set individual approval flows for each budget owner. You can save approval flows as templates and use them in your next cycle, or for job offer approvals within OpenComp’s Intelligent Offers.
Once you initiate an approval flow in our compensation software, each approver is notified of their tasks, and proposals move on when each step’s criteria are met. Automated notifications and dashboard views of the process remove friction between cycle managers and stakeholders.
Make better compensation decisions using deep insights
Without a reliable and transparent source of compensation data, people managers are likely to make mistakes through no fault of their own. That’s what happens when they can’t easily access historical compensation data, performance scales, DEI assessments, and more. Using outdated or inaccurate compensation data wastes everyone’s time.
What’s more, doing a manual DEI analysis isn't easy. Neither is comparing peer salaries. Most people managers can’t get insights in those areas because getting the compensation data requires spending significant amounts of time in spreadsheets instead of on mission-critical tasks.
That’s how inequity enters and remains in the picture.
People leaders can only make equitable decisions if they have up-to-date data and accessible compensation insights on DEI, salary ranges (including when level changes occur), peer salaries, historical adjustments, tenure, performance ratings, and more. Realistically, they can’t get those insights otherwise.
Comp Cycles provides budget owners with the insights they need at decision points, so people managers can make equitable, reliable, and accurate decisions. Comp Cycles ensures that you use objective criteria and accurate data throughout your merit or bonus cycle, and can demonstrate the rigor of your process to employees. OpenComp customers experience an average retention increase of 16%, and a 75% reduction in gender wage gaps.
Deliver adjustments that retain your team, while staying on budget
The solution to poorly run merit cycles isn’t in more meetings or reminder emails. It’s found in Comp Cycles, a collaborative, transparent, data-driven experience for people leaders, people managers, and employees, all in one compensation software platform.
Comp Cycles unites your people leaders and people managers in a shared workspace where they can access everything they need to work effectively together, instantly. You’ll reduce frustration for everyone involved, save time, and retain more of your employees thanks to Comp Cycles’ transparency, automation, and insights.
Want to see Comp Cycles in action? Request a demo today.
Mark Frigon is the VP of Product at OpenComp and has product and design leadership roles at Data.ai, Scuba Analytics, and Workday. Connect with him on LinkedIn here.