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Incentive compensation and digital HR: the stakes and challenges

Incentive compensation and digital HR: the stakes and challenges
May 17, 2024

Incentive compensation calculation

Have you heard about digital HR? This is where human resources enter the digital revolution, and businesses benefit directly. Discover the benefits of this transformation and how essential it can be for employee incentive compensation.

Digital HR or how the digital revolution flies to the assistance of human resources

In this age of digital transformation, human resources are no exception when it comes to making the best use of new technology. When we talk about “digital HR” or “e-HR”, we are talking about the digitalisation of techniques, services and processes related to human resources with the aim of automating them as far as possible.

By going over to the digital world, human resources are not just aligning themselves with the current HR trends, they are anticipating the behaviour of recruitment candidates and employees and adapting to new working methods. The aim is to improve career management by rationalising processes, reducing costs, improving communication and reducing error and lost time.  

Digitalising HR functions: a beneficial transformation affecting every aspect of the company

Moving over to the digital world means deploying a platform putting all of the human resources missions into a single space. This Human Resources Information System (HRIS) provides the means to control all of the company’s different aspects, such as recruitment or off-boarding whilst also making on-line HR marketing easier.

Digital technology guarantees more effective recruitment methods. With digital HR, dedicated sites, applications and tools can be used to create more efficient and targeted employment offers, better candidate management and better talent integration. And throughout employee careers, digital HR can also implement training tools and provide managers with monitoring platforms allowing them to support their staff more effectively.

Administrative management is also made easier thanks to process automation and access to high performance tools that significantly reduce error margins and guarantee quicker results by saving time.

 

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Digitalising HR functions: a beneficial transformation affecting every aspect of the company

Trop souvent, les fonctions RH sont freinées dans leurs missions par des tâches administratives et répétitives qui les maintiennent éloignées des grands enjeux de la stratégie globale de la société. Grâce à l’automatisation et la simplification des différentes missions, le digital RH libère ainsi les professionnels des ressources humaines de tâches chronophages et leur permet de se concentrer sur leur cœur de métier, la politique RH de l’entreprise.

En favorisant la communication entre salariés, le développement de la marque employeur et en attirant les meilleurs talents au sein de l’entreprise, la numérisation contribue à renforcer la cohésion des équipes et stimule la performance globale de l’entreprise. Les plateformes de communication et les outils permettant un suivi resserré des carrières limitent le risque de démissions et participe directement à la fidélisation des talents.

Le digital RH au service du calcul de la rémunération variable

Among the preconceived ideas about incentive compensation, we find that the development of an incentive compensation plan would be time-consuming and the source of numerous errors. Indeed, if human resources do not have the appropriate tools and focus on the wrong performance indicators, the entire plan and calculation of incentive compensation can be riddled with inconsistencies. A distorted objective-based bonus system goes against the very principle of incentive compensation, which acts as a motivational lever for the employees concerned.

Digital HR makes it possible to get rid of bad habits such as using an Excel spreadsheet to calculate, almost manually, the amount of bonuses and the objectives selected. The range of digital tools available offers numerous possibilities for building the entire bonus system and carrying out error-free calculations, including when it comes to taking into account exceptional situations or complex HR rules. An infallible calculation system, presented in a simple and clear manner, from the job interview and throughout the employee's career, is also a powerful tool for membership and loyalty to the company. The right digital tools and relevant automation processes can boost individual and collective performance.

 

HR functions are particularly concerned by digital transformation since their missions have a direct impact on all sectors of the company. A range of efficient and adapted digital tools that improve communication, strengthen the employer brand, help with management and contribute to overall performance. In terms of incentive compensation, the importance of the bonus system for the individual results of employees and the overall strategy of the company requires possessing and mastering efficient digital tools that leave no room for chance or errors.

 

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Blog post author

Hervé de Riberolles

Managing Partner International at Primeum - Expert in employees motivation enhancement through high-end incentive compensation plans

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