Managers at Texas’s Alamosa Personal Communication Service once used Excel spreadsheets to handle compensation planning and to determine whether they had the budget to hire new personnel. Invariably, they had to contact human resources to check their own data or visit payroll to request a bump in someone’s pay at the wireless service provider. Simple things seemed to take longer than necessary.
Many of those common managerial tasks became easier last January, when Alamosa installed an HRMS. The Web-based software has a "manager self-service" (MSS) module that allows managers to see different screens to determine budgeting, bonus and merit pay, auditing, maximum and minimum compensation ratios, and vacation requests. Managers access the information from the company’s intranet or remotely through a secure Web site.
The company has now embarked on a program to use its HR system, which is from NuView, for tasks such as payroll and for calculating commissions. Managers have embraced the software. "We’ve had a really good response, especially in the area of budgeting," says Jason Hardin, Alamosa’s HRMS database administrator. "Managers like it quite a bit and tell us it saves them a great deal of time." Alamosa has more than 300 users of the system because anyone who has an employee reporting to him is classified as a manager and has access to the system.
The next big wave
MSS is poised to become the next great tool in the HRMS arsenal, says David Rhodes, a principal with HR consulting firm Towers Perrin and a specialist in HR service delivery. The consulting firm’s own recent polling data shows that 72 percent of the 200 survey respondents plan to implement MSS applications within the next year. This comes in response to "the widespread recognition" that the greatest cost-savings through technology will occur when managers can more seamlessly handle functions related to compensation planning. "Employee self-service is good for communications with employees, but you make real progress if you can change the amount of time managers spend managing HR functions," Rhodes says.
Yet Towers Perrin data also shows that MSS has hardly reached its full potential. Thirty-seven percent of respondents in its survey said their MSS programs have not realized or exceeded expectations, hardly a ringing endorsement of currently available software. "I would say it’s early in the game; MSS is still in its infancy," says Rhodes. "It’s like a child that’s suffering growing pains, and there’s less evidence to suggest it’s making a difference even as expectations are going through the roof. But the expectations are incredibly high because the payoff is so high."
How high? No one really knows, and it's difficult to quantify how much money is saved when a manager makes a decision that does not require HR intervention. The cost-savings that result from attractive interfaces and information presented in digestible screens remains elusive. Yet NuView’s CEO, Shafiq Lokhandwala, claims that a company saves $35 when it makes a salary change through an MSS system. He arrives at the figure by assuming that a manager making a salary change first fills out a form (10 minutes) and then sends it to HR for approval and processing, a transaction that may take a half hour. MSS requires no printing, the application can be made online, and HR can quickly approve it since the manager knows her budgets, her salary limitations, and so forth.
An exemption change, or W-4, costs about $15 per employee per transaction using a paper-based system, says Lokhandwala. Using MSS software will reduce that to $5 per transaction. The software also helps managers in thinking through merit and bonus pay options by not only automatically giving them maximum and minimum percentages and dollar figures but also collecting all the appropriate information on employees into electronic files for comparison. "Employers have access not only to performance reviews, but also to past history of a particular employee or of everyone they ever hired," he says. "It’s all there for review."
Easy access without HR
That ability is, in fact, what attracted Doug Linn to his HRMS software more than a year ago. As senior director of human resources administration at Integrated Telecom Express, Inc., Linn uses Auxillium West’s HRnetSource™ because it integrates performance reviews with internal and external salary data to assist managers in making decisions on bonus pay and salary increases. Employees at the San Jose-based broadband company electronically file their self-appraisals to managers, who also can tap relevant information online from key customers and elements of 360 feedback from other employees.
Armed with what once took up the contents of a file folder, the company’s more than 20 managers can now use the software to read how any of their employees are viewed by customers and colleagues. They also can check their salary ranges against prevailing local standards for people in the same position with similar educational backgrounds and experience levels. Using a salary matrix along with the annual merit budget, a manager can better determine what kind of raise an employee deserves on the basis of performance and the "market value of that job," Linn says.
The external information goes a long way toward helping his managers see whether their pay scale has any relation to reality. If any of Integrated Telcom’s 100 employees are below the local average, managers will have an opportunity to make adjustments to bring them in line with what they should be earning through salary increases and bonuses. The managers, moreover, have easy access to salary comparisons without having to ask HR to run a special report for them. "It’s all really up-to-date information our people are getting, and it’s empowering because they don’t have to ask questions if they need something; it’s all available online," says Linn. "People have information and it’s available whenever they want it."
Two other advantages have emerged as the company uses this technology. One is security. Linn believes that the software provides more security, since fewer people have a chance to see employee records. It’s quite unlike the paper trail created by the old file-folder system, where secretaries, HR staffers, and others could routinely eye private documents if they wished. Second, having compensation explained online saves Linn from having to answer a constant flow of questions from managers and employees; they can look it all up online. Non-native English speakers benefit, too, since they understand written information better than verbal and are less intimidated by reading information off a Web site than asking an HR manager.
"The data is all there for employees and managers, and they don’t have to go to HR all the time to talk about these issues," Linn says. "HR has more time for more substantial issues instead of frivolous things like questions about deductibles."
Larger users of MSS sometimes buy a specific software program rather than one incorporated into a bigger HR system. At the Northrop Grumman subsidiary TASC, more than 400 managers have employed Workscape’s Compensation Planner for the past two years after using an internally designed system. Workscape’s software shares data with the company’s PeopleSoft system, according to Audrey Sullivan, director of HR systems.
The firm, which has more than 3,000 employees, ditched the in-house MSS for a more sophisticated program that managers could feel comfortable using for a variety of tasks while "helping business decision-making all the way down the line," says Sullivan. The software gives managers information on an employee’s schooling, training, title, and compensation, enabling them not only to bump a salary but also to coach a staffer on how to move to a higher compensation level.
Because the system gives data on national compensation levels, TASC can make employment offers based on solid data instead of anecdotes. And since TASC serves as a government contractor on many projects, the MSS can pull reports on the cost of the labor whenever a demand for it arises.
Sullivan says the MSS provides more easily understood reports than the Excel spreadsheets of the past. Convincing managers to jump on board wasn’t difficult because they had already enjoyed some of the benefits of an MSS system, albeit one not as powerful as the current program. "The system has received a lot of accolades from our managers for being simpler, cleaner, and faster, and they like the fact that it’s Web-based and tied into our portal," she says. "They really have enjoyed working with this product."
Workforce Online, March 2002