Workscape Provides Sophisticated Management of Total Compensation and Performance
April 21, 2010

Software for managing talent must enable employees to understand their total compensation including pay and benefits along with their performance evaluations. Human Resources is responsible for making the proper investments in these applications as part of managing the tenure of its workforce. A major supplier in this market is Workscape. The vendor historically has focused on customers in very large organizations, with over 50,000 employees, but recently has been reaching out to organizations of smaller size but most valuable for those over 1,000 employees. I have just attended Workscape's 2010 analyst summit to assess the company's efforts in both these markets.

Since 1999 Workscape has addressed the needs of HR in benefits and compensation and its business now serves 3 million users and manages $125 billion in compensation for its customers. Workscape released its recent results for 2009 about its business performance in terms of customer wins and product releases. According to that, Workscape has served some of the largest and most complex benefits and compensation plans of corporations including Cisco, Dell, Union Bank and many others.

Workscape strives to provide total compensation, benefits and performance management. It assists the need to establish and manage pay for performance by linking an employee's accomplishments in a performance appraisal with appropriate compensation and incentives. At the summit Workscape executives insisted that they will not get into the recruiting or learning segments but stay focused on rewards. Workscape has been expanding into midsize companies that have 500 employees or more. This is an important step to expand its business and to bring integrated pay for performance to smaller sized companies to motivate and retain talent.

Workscape executives presented the company's full line of products to the analysts in attendance. First was for outsourced benefits administration. The product features an employee portal that brings access to information regarding current benefits, employee profiles, beneficiaries and dependents, voluntary programs, forms, carrier information, summary plans and other relevant benefits information and links to provided programs. This product, introduced 10 years ago, aims to relieve HR from managing the disparate systems that support programs and services in an organization. It provides a single view of the workforce and management of benefits across it. It also helps HR with employee engagement activities to manage cost structures, compliance and risk and the workforce's expectations. The benefits administration takes an employee self-service approach that allows individuals determine the best choice for their healthcare needs. It's also useful for the CFO to have such a unified approach, which makes easily visible to everyone what employer and employee are paying for these benefits and getting everyone to understand costs of benefit choices especially healthcare ones.

Workscape also has a performance management application called Performance Manager that helps establish and review goals, objectives and expected activities to fulfill an individual's role and responsibilities. The application enables an interactive dialogue between managers and employees on progress towards goals. Our recent benchmark research on talent management shows this capability is of the highest importance to 68 percent of organizations. In addition the application tracks alignment to goals by the individual and others who are contributing to this goal. Workscape provides for a range of capabilities including multiple rater assessments that help make the performance review a continuous process and not an annual event. The new release of Performance Manager - version 6.65, coming in May - helps managers examine employees' progress toward specific goals, review individuals' performance and facilitates routine bidirectional communication between manager and employee to review barriers or questions on improvement. The application provides methods for reviewing objectives, values, development activities and overall review in step-by-step fashion. In addition inline analytics and reporting examine performance by individual and team. The application also integrates with a product called Compensation Planner to provide performance information for compensation assessment.

Workscape Compensation Planner is a robust compensation management application that helps organizations integrate base and merit pay, bonuses, incentives, spot payments and rewards in a single environment. Our firm reviewed the application in detail in 2009 and rated Workscape a Hot Vendor in our Total Compensation Management Value Index. This application meets key requirements for global organizations easily with support such as multiple currencies and provides flexibility in managerial reviews with adjustable columns and interactive support as is found in a spreadsheet. In addition Compensation Planner provides self-service for managers to access employee profiles, history and comments. It offers guidelines that have visual indicators for establishing allowable ranges of merit and bonus pay that are configured by administrators. Workscape has partnered with Callidus to bring variable compensation from sales into a total compensation view though they yet to have shared integration with a common customer. This application has a flexible environment to integrate data from other systems that might be used in call centers, field service and other operational areas that currently use alternative systems or mostly spreadsheets for incentives and rewards. This robust application often shows up on the short list of compensation management product reviews because of its robustness and maturity in usability, capability and manageability as identified in our Ventana Research Value Index.

Workscape also has expanded its Manager Self Service focus with an application that has new capabilities to support compensation and performance management and include spot awards to employees and unfortunate events like employee termination. Workscape has made this application a place for providing new capabilities to related workforce performance activities for its total reward focus. It has developed a supporting application for eligibility management that is bundled to support compensation and performance applications so that the supporting analysts can manage this step to ensure that managers can easily select from available compensation and performance plans.

Workscape has taken steps to ensure that its platform is accessible and scalable for managing deployments in hosted and software-as-a-service (SaaS) approaches. This is important as the company develops interfaces based on application domains and personas in its applications along with integration with other applications in the enterprise and services across the Internet. The Workscape platform has expanded to support service-oriented architecture (SOA) by enabling services and message interfaces. Workscape is expanding to use the HR-XML standard to provide another interface to its SOA; however, although supporters have been trying to advance the standard for a decade, it has not gained the support of many major application and services in production releases of applications let alone use by IT organizations supporting HR.

Workscape says it uses its compensation and performance applications in its own organization, including quarterly performance reviews, which according to our Motivate Performance benchmark research, less than 10 percent of organizations do. This is a good step as it is the wave of the future to maintain continuous communication with the workforce.

Of course, Workscape is not perfect. In terms of improvements needed, its applications could use better integration to other key talent management systems. In particular, they should be able to publish needs to learning management systems or provide integration for competency libraries by employee role that help start the performance assessment; both of these capabilities were top requirements in unifying talent management processes for HR found in our benchmark research. In general Workscape needs better automated bi-directional integration of applications and data that can interoperate across the enterprise and in cloud computing environments where more organizations have these applications and services today. There are plenty of providers today that I have covered recently like Informatica and Jitterbit who address this need in organizations today. I also suggest that Workscape partner with other application and service providers used by its existing customers to help drive the total rewards concept to the next level.

I think Workscape is right to focus on total rewards (or as I call it total compensation). It has carved out a viable position on benefits and incentives to help organizations establish pay for performance. Workscape has an advantage in that most of the talent management software providers, such as Saba, SuccessFactors and Taleo, are just getting started with compensation, while others like Authoria, Plateau and Softscape who have investing more heavily to compete at same level as Workscape. In addition ERP providers including Infor, Lawson, Oracle and SAP have not been investing significantly in this market segment. Workscape also can address the link of executive compensation and benefits to performance. This has been talked about endlessly in the industry but rarely implemented; and Workscape provides the means to integrate a special group and classification of benefits that can be managed within the unified application.

The overall approach by Workscape helps finance, operations and HR work more closely together to attract and retain talent as compensation is a linchpin for employees that should be increased based on specifically defined performance attainment. Now Workscape must focus and expand its customer base and demonstrate the value in managing benefits, performance and compensation effectively.

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Mark Smith - CEO & EVP Research


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