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Thorough Package Tracks Compensation Closely; Interview Tool Helps Match Candidates to Jobs
Your company has several locations, including offices in Japan, Germany and Poland. Managers at several levels at all the locations work on employee salary increases, merit increases, stock option payments, incentives and other adjustments to compensation.
How do those managers keep track of their own budgets? How can higher-level managers possibly keep track of the amounts being allocated by so many subordinate managers in so many different locations?
Compensation management was a four-month "nightmare" every time Boston Scientific in Natick, Mass., needed to alter salaries and incentives, confesses Olivier Deslandes, HR information systems manager.
Deslandes's company now uses Departmental Merit Review from Interlynx Technology in Boston. The web-based software automates compensation planning, allowing managers to see in real time and in one place the effects of their compensation recommendations. The process that used to take his company four months now takes 20 days, Deslandes says.
Like a Powerful Spreadsheet
For the manager, working in Departmental Merit Review is like working in an excellent, pre-designed, web-based spreadsheet. The screen shows the names of employees, budget available, the average percent for increases so far and the budget remaining.
Managers display an employee's name and type in their recommendations for base pay, performance-based increases, incentive increases and stock options. Displayed on the screen, unique for each employee, are recommended ranges for pay increases.
Displaying the information is easy enough. The real magic happens behind the scenes. "On our system, Departmental Merit Review extracts data from PeopleSoft, and managers see only their own employees," Deslandes explains.
"Managers make recommendations, such as to give one employee a 5 percent increase, another 3 percent, another 10 percent. As you do it, in real time you see your budget shrinking." An onscreen table shows the budget and reduces it as you go, displaying how much money remains in the pot.
Senior managers can see the overall effect on the budget of all their subordinate managers' pay decisions. Interlynx product manager Peter Leavitt says the product allows for "a just-in-time view of the allocation of money from any point in the organization."
The program includes workflow design, giving successive levels of reviewers automated deadlines scheduled at appropriate intervals. Managers can see which reviews have come in and which are overdue.
If a manager doesn't submit a review on time, the software automatically inserts default changes so that the employee's data can keep moving through the approval process. Automatically generated e-mail alerts the tardy manager that the system is about to insert a default pay raise or other information, and the HR manager and other relevant managers also get the same e-mail.
E-mail notification is a particularly strong plus for this software. Managers get periodic reminders to submit their analyses. If a senior manager changes the recommendation of one of his subordinates, that subordinate gets an e-mail telling her that the higher-up made the change. Managers can review four reports. One shows the status of each salary reviewer. Another gives overall progress for all salary reviews. An incentive report shows information just on incentive allocations, while a stock option report displays how many options each employee has and how big the budget of available options is. Other reports are available, such as an equal employment opportunity report. If you like to create your own customized reports, you can export data into Microsoft Excel.
HR as Strategic Contributor
I really like the way this program empowers HR as a strategic contributor to the company's bottom line. Compensation is generally a company's biggest budget item, by a considerable margin. By overseeing managers' use of Departmental Merit Review, HR helps the company engineer its most effective compensation plan.
At Boston Scientific, Deslandes explains, a division manager can see "who is below or over budget, any important trends, such as whether one given population is getting a more thorough increase than another or whether some locations are being more generous than others." The CEO can similarly look over the compensation for the entire corporation.
Managers can use information from the program to motivate certain departments. For instance, because top brass can see the big picture, it can decide to decrease the customer service department budget by a certain amount and increase the information technology budget by that same amount. Departmental Merit Review is flexible and can be used module by module, allowing the user to focus just on stock options or just on salary, for example.
The compensation program has strong, role-based security, which means that a system administrator can set privileges manager by manager. The integrated workflow model means that information flows to the right managers in the right sequence.
With a list price of $100,000, Departmental Merit Review is clearly a program for larger companies. Interlynx does plan to offer an application service provider (ASP) version later this year, which could open the door for smaller companies to use the product via the web.
Keep in mind, too, as Deslandes cautions, "Even though the technology is great and reliable, it requires a lot of work up front." For instance, HR has to make certain that the system knows who has rights to access what kinds of data, and HR has to set up for everyone using the system.
"This kind of project will only work if you have the local HR people deeply involved," Deslandes warns. "You can't just run it from corporate and think, 'We will roll that out, and it will work.'" He advises, too, that companies with multiple locations begin by setting up the software at just one location.
In 1996, SmartHire earned solid recommendation in these pages as an economical, practical tool for achieving a scientific approach to interviewing. The most recent version of this software also warrants praise. Davidson Consulting in San Diego, SmartHire's producers, have only improved this interviewing tool.
First, a refresher. SmartHire is designed to maximize the reliability and value of interviewing by giving users a unique, systematic methodology for assessing how well jobs and people match. It supports users in preparing for interviews, conducting interviews and evaluating the competing candidates.
SmartHire's claim is that it expedites how you define the unique competencies required for a given position. The software produces printed, structured interview guides to probe candidates regarding those abilities and helps users measure interviewees against the established job criteria.
Tailoring Interview Questions
The core function of the program--creating a structured interview form-leads users to identify precisely both the technical proficiencies and personal qualities required in a job.
SmartHire launches the process by stimulating the user's thinking about previous people who have held the position, asking for the names of two individuals from each category of job performance--excellent, average and poor.
The program then asks the user to articulate and enter the different abilities, behaviors, technical skills and traits that most contributed to these persons' respective rankings. This information helps focus an interview on actual experience-derived job-success factors.
The program next provides screens for collecting the job's technical requirements. The first is for specifying the essential skills and competencies an applicant must have to earn initial consideration, such as a specific number of years of experience or a certain type of degree. SmartHire then prompts the user to enter up to five critical and five non-critical technical requirements.
Completing the technical component of the interview guide involves composing and entering the questions to be asked relative to the previous prerequisites. The questions will be used in the interview to assess a candidate's level of expertise for each defined essential and desirable technical competency.
SmartHire next targets the required personal traits needed for a job. The program is based on the premise that a person's competencies and behaviors can be measured by five dimensions the software refers to as CLUES--conscientiousness, likability, undogmaticness, extroversion and stress tolerance. SmartHire enables development of CLUES profiles for a job and an applicant to assess compatibility.
To determine the job's CLUES profile, the user works through 22 consecutive screens that list descriptors such as cost-conscious, friendly, independent, persuasive and resilient. Users select the two in each group that are most important to the job. SmartHire interprets the choices and generates both a measure and rank for each of the CLUES dimensions. For example, the analysis might indicate that the job demands a high level of conscientiousness but very little need for extroversion. To interview a candidate and find out whether he or she meets the criteria for the job, the user can select from a library of questions organized by CLUES category.
The thought and time invested in carefully defining both the technical and CLUES competencies make it possible to print structured interview guides that can help keep interviews sharply focused.
Upgrades Benefit Users
The current, upgraded version of SmartHire demonstrates that its makers have not been resting on their laurels since they were last reviewed here. One new function allows multiple users to provide input relative to a job's CLUES profile. SmartHire will analyze the choices and generate a CLUES composite profile reflecting the opinions of these expert employees. This multiple-user capability represents a thorough approach to obtaining reality-based, objective job evaluation.
A second enhancement is the greatly increased library of built-in CLUES questions, now totaling 550. Users can ask a question as is or rewrite it as desired. Purchasers enjoy considerable flexibility relative to a question's content and wording.
An interesting innovation is a module that allows users to conduct a job interview using the computer as a tool during the interview. The SmartHire Interviewer displays each successive question on screen, provides for entry of a score and notes about the applicant's response and even counts down how much time has been spent on the current question and the interview overall. It's a feature that could be used by HR departments comfortable with such an interviewing approach for temporary or lower-level positions, where less intensive interviewing might be required.
SmartHire now has a component for scoring interviews and comparing different applicants to each other and to the ideal CLUES profile for the job. Users can see a screen showing every candidate's scores by CLUES category and by each technical competency question. By clicking on a desired applicant's name, the user gets a comparison showing how the candidate's CLUES profile conforms to the one developed for the open position.
Back in 1996, SmartHire did a terrific job of serving its intended purpose--making interviewing an organized, information-based, reliable and fair hiring tool. The enhancements since then have further increased the software's value and its potential contribution to a systematic and accurate selection process. SmartHire gets another "thumbs-up."
Editor's Note: Inclusion in this column does not necessarily imply endorsement by SHRM or HR Magazine.
Compiled by Stacy VanDerWall, editorial assistant.
Jim Meade, Ph.D., based in Fairfield, Iowa, is an author and HR software consultant specializing in software selection. He is currently preparing The 2001 Guide to HR Software. E-mail him at firstname.lastname@example.org.
Gary Meyer is a freelance writer and software reviewer based in Cincinnati.
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