What is Smart Compensation?
Learn about Visier's solution for compensation planning.
Smart Compensation is a data-driven, decision-making solution that manages the workflow of an annual merit cycle or one-time market pay adjustment cycle—from setting the budget through to the communication of pay changes to employees.
Smart Compensation allows your HR Operations team to run a merit cycle without drowning in spreadsheets. It’s flexible enough to encode complex pay philosophies, transforming them into simple math. Smart Compensation guides, empowers, and elevates your managers' understanding to make more informed decisions around promotions and pay. These managers can then communicate effectively with the employees who report to them to ensure they feel rewarded and recognized. Smart Compensation allows your organization to analyze the resulting pay choices before they’re finalized, which helps identify discrepancies—such as negative impacts to equity—so your organization can address any concerns.
Supported pay philosophies
Smart Compensation includes a set of pay philosophy elements to encode strategic guidance into actionable pay recommendations. These elements use data to drive pay recommendations and require that some data is loaded to function. If the required data is not loaded, these pay philosophy elements are not available.
The following table outlines the supported pay philosophy elements.
| Pay Philosophy Elements | Description |
|---|---|
| Merit |
|
| Promotions |
|
| Across-the-board |
|
|
Bonus |
|
|
Long-term incentives (LTI) |
|
Delivered value
Smart Compensation is designed to automate the compensation cycle process. It guides that process from one stage to the next, using features that make it easier and more efficient. The value delivered from Smart Compensation is listed below.
Automate Compensation Cycle
Smart Compensation includes progress tracking and multi-level collaboration, so various levels of your organization can review and adjust as the allocations flow up through the supervisory hierarchy.
Optimize Compensation Dollars
The CFO or HR team sets the top-down budget for the annual compensation cycle, which is in line with business objectives and competition in the market. Smart Compensation performs the bottom-up application of that budget for the exact employees who are within the scope for each cycle, according to your objectives and through the pay philosophy you’ve configured.
You can align pay to cost-of-labor adjustments and align your merit matrix to estimate how many employees will likely get identified for promotion. Then you can balance the available budget against your objectives to arrive at the optimal budget and hold-back before managers begin the allocation process.
Smart Merit Recommendations
The recommendation engine provides initial compensation values for your employees that are in line with your pay philosophy. These recommendations are included as compensation presets and can be configured for adjustments, such as how much of a raise is given for promotions, as well as the configuration of merit matrices.
Person-level recommendations provide an unbiased and fair anchor point for managers to start their allocation. Managers can then adjust from this recommendation, but they must justify their adjustments with valid reasons. This approach provides the ideal mix of reducing manager subjectivity while maintaining manager discretion.
Smart Pay Conversations
Smart Compensation prepares managers to have healthier pay conversations that drive the people outcomes you want. By exploring historic data about your employees from multiple sources in a single interface, managers come prepared to have a meaningful discussion that optimizes the impact of pay to motivate employees. Smart Compensation takes the bold approach of guiding line managers with a simple user interface that’s crafted to allow them to work through their tasks efficiently and build their competency along the way.
Proactively Address Fairness and Equity with Checks and Balances
Smart Compensation includes industry-leading analysis capability to empower stakeholders to understand the impact to equity, fairness, and the risk of exit throughout the process to help ensure that the compensation budget is applied in the most impactful way. This approach includes a unique hypothesis analysis capability to create a data model of what the organization looks like—including the proposed changes—in real-time and before the decisions are finalized and sent to pay.
Note: Smart Compensation does not perform pay equity regression testing typically done through a third party under legal privilege; although, it helps manage fairness and equity to reduce the need for this type of testing.
Greater Pay Consistency to Support Pay Transparency
Smart Compensation provides managers with the separation of factors for individual employees to support a constructive and impactful pay conversation. The application also prepares managers by allowing them to see pay and job change history, both of which are essential to understanding employee expectations.
Functional capabilities
Smart Compensation provides for unlimited compensation cycles that can run in parallel. It also provides recommendations for employee compensation increases, and organizes employees into task groups and creates approval chains according to a hierarchy. Typically, this capability is based on your supervisory structure, but Smart Compensation can use any hierarchy based on your employee IDs.
As well, security and permissions are set up to align with these hierarchies and capabilities are assigned to users so that they’re able to see the data they need to perform tasks assigned to them. The base configuration allows managers to see all relevant data about their employees with managers of managers able to see all relevant data for the population within their portfolio. Support users can see relevant data about the population they’re assigned to support; whereas it’s the usual practice that HR Operations users are granted access to the entire population. Smart Compensation supports detailed permission definitions, which are modified to your requirements during onboarding so you can ensure that your users only see what they need to see.
Data elements
The following data elements are required to enable the Smart Compensation functional capabilities:
- Employee Profiles: Employee IDs, Full Name, Job Name, Career Level, Start Date, and Manager ID are examples of relevant data fields.
- Hierarchies: Supervisory, location, and organizational hierarchies are used to assign tasks and segment employee populations.
- Compensation: Depending on the type of compensation cycle you’re planning, current compensation data is required. Smart Compensation supports base pay and bonus pay types.
- Pay Levels: An employee’s position in a pay band is an important driver of recommended increases. It drives visualizations to help managers make decisions that ensure equity.
Talent assessment capabilities
Within the compensation cycle, Smart Compensation gathers data from managers by asking them to perform a talent assessment prior to viewing its recommendations for individual employees. This data is dependent on the pay philosophy that you’ve chosen and is used when the merit matrix that includes proficiency is selected. In the talent review, managers identify the proficiency of the employee, which contributes to the math for the recommendation.
Analytic capabilities
Smart Compensation assists with decision-making by surfacing analytic content at critical moments of the workflow for both the HR Operations user and managers. This analytic content requires data about your employees and organization to function.
Data elements
The following list shares the types of data that drive the analytic content. Although the following items are not required, they add richness and context to the decision-making process:
- Employee History: This type of data is important for managers to gain a deep understanding of an employee’s expectations with visualizations of career history, compensation history, and potential career paths learned from all historic movements within your organization.
Note: You need to onboard additional data to access this functionality.
- Visier Benchmarks: Promotion rate benchmarks are surfaced in Smart Compensation to inform the HR Operations user when budgeting for expected promotions within a compensation cycle.
Note: To access Visier Benchmarks at no cost, your organization must participate in our Benchmarking program.
- Standardizations: Standardized occupations and locations are valuable additions to your data that align benchmarks and provide the ability to explore potential career paths for employees based on Visier’s extensive community data. This type of data is helpful when managers are preparing to determine who to promote and the roles into which to move the employees.