Overview on Human Capital Management

Human capital management (HCM) is an approach to employee staffing that perceives people as assets (human capital) whose current value can be measured and whose future value can be enhanced through investment.

An organization that supports HCM provides employees with clearly defined and consistently communicated performance expectations. Managers are responsible for rating, rewarding, and holding employees accountable for achieving specific business goals, creating innovation and supporting continuous improvement. HCM software streamlines and automates many day-to-day record-keeping processes and provides a framework for HR staff to manage benefits administration, payroll and create map out succession planning.

There are many excellent solutions that don’t attempt to do everything, but focus on specific functionality – such as recruitment, HR administration, or performance management. The Human Capital Management market is crowded, with many different vendors.

This list below is an attempt at capturing best enterprise-grade solutions that are proven, well-maintained, and being actively developed:

·         Workday

·         Ultimate Software

·         SuccessFactors BizX

·         Oracle Fusion

                                                                      

Workday Inc. is an on‑demand (cloud-based) human capital management and financial management software vendor. Workday Human Resource Management helps to effectively handle a global workforce. From hiring       employees to analyzing the workforce, Workday helps  to manage the processes. As business circumstances and requirements   change— including organizational structures, business-process rules, worker assignments, and reporting priorities, Workday  immediately adjusts for those changes.

Key features offered by Workday:

•        Intuitive User Interface

•        Business Process Framework /Advanced Work-Flow Capabilities

•        Actionable Reporting / Analytics

•        Total Workforce Visibility

•        Constant System Enhancements

•        No Database license, Server or Software Upgrade Cost hence less Cost of ownership ( TCO)

•        A Unified HR, Talent Management System

Three times a year, Workday releases updates to its HCM solution. Unlike traditional on-premise software that requires costly and time-consuming upgrades every 3 to 5 years, Workday's mulit-tenant architecture allows customers to move to the new updates in just a few days - at no additional costs - as part of their regular subscription fees.

Workday's HCM solution is designed to help a company to plan, hire, manage and analyze the workforce. People in the company are most valuable resource and Workday provides the tools to effectively execute HCM strategies.

 “Human Capital Management (HCM) is responsible for attracting, developing and managing the firm’s biggest asset: - People”.

Compensation Software Tools

Compensation is one of many human resource (HR) tools that organizations use to manage their employees. For an organization to receive its money’s worth and motivate and retain skilled employees, it needs to ensure that its compensation system is not an island by itself. Hence it is important for an organization to link compensation to its overall goals and strategic.

Smart, successful organizations do regular planning and evaluation of their compensation and performance appraisal system. It is critical to consistently communicate clear message regarding, how pay decisions are made. Today, organizations tend to view employees as more than just another resource. Compensation has become blended within an overall talent management approach where compensation programs include all employees and not only the “rock stars” of the organization. There may be variations depending on the type and level of contribution of each employee, but generally speaking, compensation aims to be consistent to motivate all employees.

Software Can Help Ensure Fair Compensation

• Software allows decision makers to manage and visualize compensation within an overall talent    management picture
•   Analytics indicates trends in employee behavior, which can lead to the ongoing adjustment of the    overall  compensation planning
•  Technology has the ability to create a space where employees are able to share unstructured        feedback (e.g., freeform comments as opposed to pre-defined surveys). Unstructured data is a    valuable source  of insight for HR managers, as it allows them to trace employees’ dissatisfaction with  compensation,  in real time
•  As flexibility is becoming an important part of compensation packages, software can help track  flexible  work conditions, thus eliminating timesheets or the need to punch in and out

It seems that the way in which technology can assist with designing fair compensation plans depends entirely on the company culture and on the ability (or willingness) of its decision makers to adapt to employees’ demands.

In today’s technology market we see a number of software tools that help or provide some fabulous features that are very beneficial for HR manager. The top compensation management software products are:

•       CompensationXL
•         HRsoft Compensation Planning
•      QCommission
•      EASi - Stock Plan Software
•      Halogen eCompensation
•      Glocent
•      Kenexa

It can be safely concluded that Compensation strategies should no longer be based on whim and fancies of individuals. It should be based on structured and consistent parameters and a software tool can help achieve the goals.

SaaS vendor selection & Performance review by HR tools

 Software-as-a-service (SaaS) continues its rapid growth — becoming an increasingly strategic part of firms’ application portfolio. SaaS presents a compelling new opportunity for small and medium-sized organizations. A 2008 report by AMI Partners titled "2008 U.S. Small and Medium Business Applications & Solutions Market Overview" found that 21 percent of small businesses and 31 percent of mid-sized businesses have tried SaaS products. Software configuration, upgrades, maintenance, and support are all responsibilities of the vendor; customers adopt a "pay-as-you-go" pricing structure, with monthly fees based upon actual use i.e. they're now "renting" the software rather than "buying" it. Following are the areas in which the SaaS approach is ideally suited for HR as a function:

·         Applicant tracking

·         Time and attendance management

·         Benefits management

·         Leave management,

·         Employee self-service functionality,

·         Payroll management, recruitment and performance management.

When implementing SaaS, there are a number of processes and tasks that a business must complete, in order to successfully implement SaaS.  These considerations and processes are detailed below:

·         Understand exactly why are you implementing SaaS- There are a number of reasons why businesses would want to implement SaaS. Some business might want to improve the efficiency of their HR business related process while others might have some specific pain points to address

·         Data ownership- Buyers expect that they have ownership of their data — but in some cases they have been surprised by fees associated with getting their data back at the end of their relationship with the provider. SaaS contracts should be clear about any fees associated with getting data back at the end of a relationship as well as other details such as data format

·         Support expectations- SaaS vendors are often able to provide additional services such as password resets and health checks

·         Cost increases at end of contract- Firms often spend time negotiating their initial contract and considering the total cost of ownership based on that initially agreed-on price

·         Backup and recovery guarantees-  SaaS buyers should understand how their vendors are approaching backup and data recovery as well as to write language into the contract that commits the vendor to restore data in case of disaster

·         Flexibility and quality of service- Many SaaS providers do their integration and data exchange from Web server to Web server over public Internet on a secured or unsecured port. The quality of service via public Internet is “best effort” at the network level and thus the provider cannot ensure high quality

·         Global reach- Global companies need to ensure their SaaS provider has a solution in the countries that meet the buyer’s existing and expanding geographic needs. This is especially important where users need fast response times.

Performance Review- In the whole organizational life cycle a performance review is one of the most important stages for employees. Performance Review is a powerful evaluation mechanism to measure individual employee performance accurately, clearly, and objectively for an engaged, focused, and highly productive workforce. The performance review is intended to be a fair and balanced assessment of an employee’s performance.

                     Sometimes it has a negative effective, if it is not performed well by managers and supervisors. 

“90% of performance appraisal processes are inadequate. –Salary.com survey”.

    Most Serious Performance Appraisal Problems are:

§  Actual performance is not assessed                             

§  Infrequent feedback

§  Lack of effectiveness metrics

§  Lack of accountability

§  Managers are not trained

§  A time-consuming process

There are some tools in market that helps HR in Performance reviews making it less time consuming, appropriate, effective and trustworthy. A shift to web-based, on-demand technology is making these systems affordable, regardless of the size of an organization, with quick implementation schedules and requiring minimal IT support and automatic upgrades. When selecting an automated performance management solution make sure to do your research. Some solutions offer nothing more than an electronic appraisal form while others offer complete best-of-breed goal management solutions.

                Cornerstone is one of the best software tools in the market today to support performance review process. The cornerstone tool translates workforce activity into positive business results, identify and track employee performance, recognize and reward top performers. The Cornerstone helps organization to get the greatest return on its human capital investment by offering

§  Goal Setting & Management

§  Performance Appraisals

§  Social Reviews

§  KPI Dashboards at Every Level Of the Enterprise

§  Custom Performance Reviews & 360-degree reviews.

                        Apart from Performance Management, Cornerstone also offers capabilities across other HR areas such as Skill & Competency Management, Succession Management and Compensation Management.