Systems cost to perform the process group "reward and retain employees" as a percentage of total process group cost

This measure calculates the percentage of the total cost to perform the process group "reward and retain employees" that comes from systems cost. Activities in this process group include compensation administration, award/incentive administration, employee assistance, benefits administration, and payroll processing. Systems costs include a variety of specific costs related to computer hardware/software, network maintenance, data storage, etc., and all fees paid to full-time, part-time, or temporary employees or independent contractors hired to perform these services. This measure is part of a set of Supplemental Information measures that help companies evaluate additional variables not covered elsewhere for the "reward and retain employees" process.

Benchmark Data

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Measure Category:
Supplemental Information
Measure Id:
100089
Total Sample Size:
2,075 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
No

Compute this Measure

Units for this measure are percent.

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(Systems cost to perform the process group "reward and retain employees" / Total cost to perform the process group "reward and retain employees") * 100

Key Terms

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Process Cost Components

Total cost for a process, process group, or function consists of the following five components.

Internal/In-house operating cost consists of the first four components (personnel, systems, overhead, and other).

Personnel Cost

Personnel cost is the cost associated with personnel compensation and fringe benefits of employees (i.e., those classified as FTEs which includes both full-time and salaried/hourly employees) contributing to each respective process. Personnel cost should include all of the following costs.

Employee Compensation: Includes salaries and wages, bonuses, overtime and benefits.

Fringe: Includes contributions made towards the employees' government retirement fund, workers compensation, insurance plans, savings plans, pension funds/retirement plans, and stock purchase plans. This should also include special allowances, such as relocation expenses and car allowances.

Systems Cost

Systems costs include all expenses, paid or incurred, in conjunction with:
Computer hardware or computer software acquired by the organization or provided to the organization through service contracts.

Any related costs to process, service and maintain computer hardware or computer software. The costs of providing and maintaining services for each applicable process (e.g., computer system(s) processing (CPU) time, network/system communication charges, maintenance costs for applications and data storage). This includes the costs related to LANs, WANs, etc. This does not include one-time costs for major new systems developments/replacements. Consultant fees should not be included in depreciation of new system implementations. Include only those costs that occur more than six (6) months after implementation, as normal system maintenance costs. Any systems cost (e.g., maintenance) which is outsourced to a third party supplier should be captured in the separate cost category labeled outsourced cost.

Systems cost should include all salaries, overtime, employee benefits, bonuses or fees paid to full-time, part-time or temporary employees or independent contractors who perform services relating to computer hardware, computer software, processing or systems support.

Overhead Costs

For the purpose of this study, provide the total actual overhead costs for the year related to the specified process. These are costs that cannot be identified as a direct cost of providing a product or a service. Include the primary allocated costs such as occupancy, facilities, utilities, maintenance costs, and other major costs allocated to the consuming departments. Exclude systems costs that are allocated, since these will be captured separately as systems cost.

Other Cost

Other costs are costs associated with the specified process, but not specifically covered in personnel cost, systems cost, overhead cost and outsourced cost in this questionnaire. These other costs include costs for supplies and office equipment, travel, training and seminars. Include the cost of telephones, except for that portion captured in systems cost.

External/Outsourced Cost

In determining outsourced cost, include the total cost of outsourcing all aspects of the specified process to a third-party supplier. Exclude one-time charges for any type of restructuring or reorganization. Outsourced costs should also include costs for intracompany outsourcing (i.e., reliance on a shared services center or other business entity).

Systems Cost

Systems costs include all expenses, paid or incurred, in conjunction with:

Computer hardware or computer software acquired by the organization or provided to the organization through service contracts.

Any related costs to process, service and maintain computer hardware or computer software. The costs of providing and maintaining services for each applicable process (e.g., computer system(s) processing (CPU) time, network/system communication charges, maintenance costs for applications and data storage). This includes the costs related to LANs, WANs, etc. This does not include one-time costs for major new systems developments/replacements. Consultant fees should not be included in depreciation of new system implementations. Include only those costs that occur more than six (6) months after implementation, as normal system maintenance costs. Any systems cost (e.g., maintenance) which is outsourced to a third party supplier should be captured in the separate cost category labeled outsourced cost.

Systems cost should include all salaries, overtime, employee benefits, bonuses or fees paid to full-time, part-time or temporary employees or independent contractors who perform services relating to computer hardware, computer software, processing or systems support.

Supplemental Information

Supplemental information is data that APQC determines is relevant to decision support for a specific process, but does not fit into the other measure categories such as cost effectiveness, cycle time, or staff productivity.

Full-time Employee, Part-time Employee, and Temporary Employee

Full-time Employee

For the purpose of this survey, a regular full-time employee is hired for an indefinite period of time and is normally scheduled to work forty hours per week. Appointment is continuous, subject to satisfactory performance and availability of funding.

Part-time Employee

For the purpose of this survey, a regular part-time employee is hired for an indefinite period of time and is scheduled to work less than forty hours per week.

Temporary Employee

A temporary employee is employed for a finite period of time, to fulfill a time-limited role, or to fill the role of a permanent employee who is absent from work. The length of time an employee can work for the organization and be considered a temporary employee may be governed by employment legislation.

Measure Scope

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Cross Industry (7.3.0)

  • 7.5.1 - Develop and manage reward, recognition, and motivation programs (21438) - Managing and executing the programs required to reward, recognize, and retain employees.
    • 7.5.1.1 - Develop salary/compensation structure and plan (10498) - Creating the framework for the provision of salary/compensation to employees. Break down the salary structure into different components such as fixed pay, variable pay, bonus, and allowances such medical allowance, and rent allowance, etc. Develop, adjust, and maintain a pay structure.
    • 7.5.1.2 - Develop benefits and rewards plan (10499) - Developing a plan for provision of rewards, commission, and benefits to employees. Plan health benefits, retirement benefits, non-monetary benefits, etc.
    • 7.5.1.3 - Perform competitive analysis of benefits and rewards (10500) - Analyzing and evaluating the organization's benefits and rewards plan. Compare/Benchmark the benefits and employees plan with other organizations to adhere to industry standard practices.
    • 7.5.1.4 - Identify compensation requirements based on financial, benefits, and HR policies (10501) - Recognizing the employee requirements for compensation on the basis of the financial, benefits, and HR policies of the organization. Recognize individual compensation requirements regarding the financial policies of the organization. Consider the benefits plan and overall HR policies while selecting compensation requirements.
    • 7.5.1.5 - Administer compensation and rewards to employees (10502) - Managing the provision of compensations and rewards to the employees while maintaining consistency with the compensation and benefits plan. Follow the compensation and benefits plan rigorously in order to avoid any discrepancies.
    • 7.5.1.6 - Reward and motivate employees (10503) - Rewarding and stimulating the performance efforts of employees. Create methods for motivating employees. Spur extrinsic and intrinsic motivation.
    • 7.5.1.7 - Review retention and motivation indicators (10510) - Reassessing the indicators for retention and motivation of employees. Monitor the indicators that signal the levels of motivation and retention. Regularly update and upgrade indicators to avoid depreciation and ensure high efficiency.
    • 7.5.1.8 - Review compensation plan (10511) - Analyzing existing compensation plans and making changes necessary to continue to retain employees.
  • 7.5.2 - Manage and administer benefits (10495) - Managing and ensuring benefits enrollment by the employees. Process any benefit claims made by the employees. Balance the estimated amount and entitled amount of benefits.
    • 7.5.2.1 - Deliver employee benefits program (10504) - Implementing the programs that specify employee benefits, other than salary provided, such as those concerning medical care, death, and disability.
    • 7.5.2.2 - Administer benefit enrollment (10505) - Handling the employee enrollment for obtaining benefits. Manage employee enrollment and eligibility. Encourage employees to enroll for benefits.
    • 7.5.2.3 - Process claims (10506) - Processing any formal requests or demands made by the employees claiming that they have earned some benefits. Send the request further up the managerial hierarchy to ensure approval.
    • 7.5.2.4 - Perform benefit reconciliation (10507) - Carrying out reconciliation of benefits delivered to employees. Compare the estimated benefit requirement made by the employee and the actual amount of benefits the employee is entitled to receive.
  • 7.5.3 - Manage employee assistance and retention (21439) - Managing activities centered around delivering programs to support work/life balance for employees; developing family support systems; reviewing retention and motivation indicators; and reviewing compensation plans.
    • 7.5.3.1 - Deliver programs to support work/life balance for employees (10508) - Designing programs that prompt proper balance between work (i.e., career and ambition) and lifestyle (i.e., health, pleasure, leisure, family, and spiritual development/meditation). Account for dependent care, flexible working arrangements, leaves of absence, on-the-job training, etc.
      • 7.5.3.1.1 - Manage flexible working (21440) - Creation and execution of a plan that might allow for work from home days, or alternate hours.
    • 7.5.3.2 - Develop family support systems (10509) - Creating a support structure that aligns with local and federal laws that allow for support for families. This could include things like maternity leave, care for a family member, or in some cases, extended sick leave.
  • 7.5.4 - Administer payroll (10497) - Managing the sum of all financial records of salaries for an employee, including wages, bonuses, and deductions. Use a payroll management system to deal with the financial aspects of employees' salaries, allowances, deductions, gross pay, net pay, etc. Generate pay slips for a specific period.