The impact of compensation and benefits on an Organization

On average, companies spend 20-40% of operating costs on employee-related expenses. These include employee wages, bonuses, insurance, and additional benefits. Manually tracking these expenses is very labor intensive and has a high likelihood of errors.In this discussion, let’s address how a HRIS can be used to track and monitor these costs. What are the benefits of using a HRIS for compensation and benefits? How can a HRIS be used strategically to determine the impact of these costs on an organization?***Please no Plagiarism, follow instructions. References please. Attached information for guidance. Around 300 words*****
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Impact of Compensation and Benefit Costs to an
Organization
Employee total compensation includes items such as wages, bonuses, and non-monetary
benefits. Compensation packages keep employers competitive by attracting and retaining talent.
Companies that don’t stay current with salaries and benefits may lose quality, trained employees.
For this reason, compensation planning is critical, and HRIS helps manage this business
element.
Some compensation costs are fixed, while others are variable, depending on economic and
business factors. HRIS systems aid on monitoring changes in compensation costs, so that
companies do not experience surprise increases in human capital costs. For example, in some
states, insurance premiums vary based on the number of employee accidents. If not monitored,
this additional expense could negatively impact company initiatives. With an HRIS, reports can be
pulled to show discrepancies and prepare for future increases in costs.
Compensation Costs
Total compensation refers to all expenses related to providing recompense to employees. These
costs include fixed costs and variable costs:
Fixed compensation costs:
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Salaries
Set bonuses
Variable compensation costs:
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Hourly wages
Variable pay plans
Incentive-based bonuses
On-the-spot bonuses
Profit/gain sharing
Stock options and restricted stock units
Vacation pay and paid leave/paid time off
Health insurance benefits (most are partially subsidized by employers)
Other Benefits (short/long term insurance, unemployment, workers compensation)
Non-monetary benefits (discounts, perks, etc.)
401K match
Tuition reimbursement
Car allowance
Cell phone/internet
How HRIS Supports Strategic Partnership
For a business to prosper, it’s paramount that employee compensation is managed efficiently.
Companies are constantly looking for ways to increase margins while providing adequate
employee compensation. HR can utilize HRIS software to support business initiatives and support
strategic partnership.
For example:
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HRIS can link compensation to department budgets.
Salary increases and bonuses can be integrated into the annual plan.
Cost-of-living allowances (COLAs) can easily be updated and wages recalculated.
HRIS can provide employees with comprehensive total compensation reports.
HRIS reduces time spent on HR administrative duties.
Mandatory government reports and tax changes can be updated easily.
Paychecks can be made more accurate and timely.
Employee pay scales can be monitored regularly.
Unemployment and Workers Compensation can be simplified and regulated.
Benefit administration can be a cumbersome task, but with an HRIS the undertaking is
streamlined and managed without human errors. HRIS helps HR departments deliver timely and
accurate benefit information, renew contracts, and track benefits in relation to total employee
compensation. Rising insurance costs and increases complexities are simplified with automated
benefit enrollment and employee self-service (ESS). Employees control changes to their benefit
elections and personal information, and this results in a win-win because employee satisfaction
ratings rise, delays are removed, and business costs are reduced.
The Impact and Cost of Compensation and Benefits to an
Organization
This video addresses various types of compensation and their costs and the impact the costs
have on an organization.

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