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Rewarding with spreadsheets? 7 reasons to stop doing that

The end-of-year period is one of the coziest times of the year. Christmas trees, mulled wine, and presents: who doesn't love them? But the end of the year usually also means: bonuses, pay raises, and performance reviews. For HR managers, the end-of-year period brings headaches. At least, if they rely on spreadsheets for the annual reward cycle. With the right software tool, rewarding goes much smoother.
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Those who work hard deserve a raise or a bonus. The annual discussion about salary and performance is an important moment for every employee. Behind the scenes in HR, there is a complex process that precedes this. In many companies, this still happens through spreadsheets. That's problematic. It makes the reward cycle a cumbersome, error-prone, and rigid process. Here are the 7 reasons why choosing a compensation tool is better than spreadsheets.

1. Bonus and merit distribution with spreadsheets is time-consuming

Splitting the compensation spreadsheet into multiple files, one for each department, is a challenging task. Department heads distribute the budget according to the instructions and formulas in the file they received. Once filled in, they send it back to HR. Collecting, cleaning, and re-merging the data is a time-consuming affair, as the managers often change the formulas and templates. This has to be corrected manually.

A compensation tool like Youbo automates this process. Based on the employee database, the salary policy, and the available budget, the correct data are automatically ready in the tool. Splitting and re-merging documents is a thing of the past. This is a huge time saver.

2. Bonus and merit distribution via spreadsheets is error-prone

Reassembling the files is difficult. The formulas in the spreadsheets became mutilated. Columns have disappeared and appeared in unwanted places. There are typos in the files. It is a Herculean task for HR to track down and eliminate the errors.

A compensation tool provides real-time access to data that is automatically updated as new information is added. It eliminates the manual merging of files. This drastically reduces errors. The tools have built-in error control.

3. Spreadsheets are too inflexible

Does everyone get the same raise regardless of performance? The classic peanut butter approach is outdated. Salary policy is no longer one size fits all. In the war for talent, driven HR professionals do their utmost to please employees. They do this, among other things, with individualized remuneration that meets the employee's needs.

The formulas in spreadsheets are not capable of reflecting the complexity of individualized salary policy. Software tools can do this. Through integrations, it is perfectly possible to support personalized, motivated salary goals. They flexibly import data from any source and support a tailored salary policy.

4. Spreadsheets are insecure and do not guarantee privacy

What do spreadsheets and rabbits have in common? They multiply very quickly. The classic joke circulating in HR offices in December is not without basis. The many spreadsheets on local systems are susceptible to data theft, loss, or damage. Their security is subpar. They pose a risk for hacking, especially when printing or emailing. Privacy regulations are strict, and rightly so. It is obvious that data must be protected according to the highest standards. With spreadsheets, this is difficult.

Compensation tools are secure. Cloud-based systems offer encrypted storage, backups, and comply with regulations such as GDPR. Only designated responsible individuals have access, with a password. Usage is recorded and traceable.

5. Spreadsheets Provide Insufficient Transparency

Does the budget get distributed by the managers on time? With a compensation tool, HR has real-time insight into the data. Instead of sending general reminders, HR can target specific issues. Are the bonuses being assigned fairly? Are there managers who consistently allocate too much money? Or are there those who are too stingy with compensations? With spreadsheets, you're in the dark about these issues. A tool allows for creating reports based on the numbers.

What impact does a change in wage policy have? Predicting various outcomes is complex and time-consuming with spreadsheets. With a compensation tool, you can easily compare different scenarios.

6. Spreadsheets Hinder Smooth Collaboration

It's not easy to share spreadsheets with multiple users and collaborate on them. The focus of a spreadsheet-based reward policy is on human resources.

However, real-time data processing in compensation tools facilitates collaboration. It makes discussions between HR and managers easier, and also among managers themselves. This benefits the reward policy and the distribution of work.

7. Spreadsheets are User-Unfriendly

For non-technical users, spreadsheets are challenging. They have a steep learning curve and are not ideal for mobile use. In contrast, compensation tools are intuitive. After a short training, users can easily work with them.

Compensation tools enable the generation of clear and intuitive reports for employees, aiding managers in evaluation talks and giving employees a clear overview.

With our compensation tool, Youbo, the reward process is faster, safer, and easier. Companies report saving months of time. Software like Youbo, which supports flexible remuneration, is not just nice to have in today's market; it's a must-have. Youbo works according to the preset salary appraisal process. The evaluation procedure starts from appraisal systems (like SAP, SDWorx, or huapii) and personnel and salary data (e.g., SAP, SDWorx, or Oracle). Based on the employee database, wage policy, and available budget, the correct data in the tool is automatically ready. Managers can easily distribute the budget. Youbo connects with your HR software so that approved compensations are automatically implemented in the payroll.

Curious? Our experts would love to tell you more.