Employee reward management, in particular share incentive management and operations, generally involve manual processes that can be cumbersome and take copious amounts of time to get right. Incentive plan issuers are seeking better ways to manage these plans – to quicken turnaround times, mitigate the risk of human error and control data, and effectively automate all the tedious administration processes from employee communication and performance tracking to generating financial reports.
Integration is the new buzzword amongst technology providers and for a very good reason. Using Application Programming Interfaces (“APIs”), data can flow freely and securely from one application to the next, allowing technologies to “speak to each other” – eradicating the need for manual human intervention, making data more accessible and allowing for a more productive, error-proof workflow. And with so many stakeholders involved in the reward plan process, including Payroll, HR, Finance and Accounting, having a single source of true information that integrates effectively, couldn’t be more important.
Setting up the single source of truth
Incentive plan management technology ensures that a single point of reward data and record-keeping is maintained, and by integrating with other company-wide systems using secure APIs, administrators and participants alike can rely on a more robust, hassle-free experience.
In particular, having real-time share price information and transaction updates can provide much-needed transparency and help award holders and plan managers make better personal and business decisions faster.
But it’s not only plan administrators and participants that will reap the benefits of an integrated, automated approach – Finance and Accounting require agile reporting systems, Brokers need to trade in real-time, and Payroll must settle these awards timeously and without error. All stakeholders need peace of mind.
Simply put, automation (and specialised automated tools) saves time and lets your staff focus on other, more strategic activities. In the case of incentive plan management, specialised administration software streamlines share plan processes by generating reports, performing calculations, tracking tasks, and communicating with employees. Regardless of complexity, an end-to-end automated approach to managing the award lifecycle ensures efficiency for all stakeholders.
But not all technologies are equal, so it is recommended that one seeks software that meets your key requirements. Here are some of the most important considerations when assessing a platform:
- Store employee data: When selecting technology for managing awards, it is paramount that it can save participant data and link it to pertinent information about awards, such as their terms and processes. Data should be available for instant reporting and disclosure purposes.
- Engage with employees: For seamless employee engagement, opting for a platform that enables personalised multilingual communication is crucial. This way, your employees can receive real-time updates about their awards and stay informed on the amount and timing of what is due, whether in shares or cash.
- Communicate with brokers and traders: To ensure integrated trading functionality for share plans, it’s essentia l to consider straight-through processing with a preferred broker allowing your employees to trade in real-time.
- Issue awards: Do not overlook the importance of a completely digital issuance and acceptance tool that efficiently boosts plan engagement and allows administrators to manage a sometimes global and complex participant base.
- Aid in vesting: Ensure your tools use vesting dashboards to receive alerts for upcoming tasks, compute intricate vesting percentages, and release awards.
- Exercise and settle: One of the most critical aspects of managing share incentive plans is efficiently managing the settlement process, including having complete control and oversight of trades and payment transactions and the associated taxes. Full oversight is only possible if your administration technology is sufficiently integrated with trade execution partners and payrolls so that all stakeholders can track the status of any transaction.
- Account for plans: Most company administrators miss the importance of having a direct link between share plan transactions and their direct impact on the financial statements – and this consideration is of utmost importance to ensure a complete and integrated end-to-end solution. To comply with complex accounting standards such as IFRS and GAAP, it’s essential to find the solution that will make each and every issuance, vesting and settlement easy to account for.
- Report: The aim of reporting is to provide multiple stakeholders with access to real-time information to aid in effective decision-making. Reporting capabilities should be assessed based on the type of information that is accessible, the ease with which this information is dissectible, and the clarity of the information represented. For share plan management, it is advisable to seek a technology that provides access to a range of audit-ready accounting reports, including valuation reports, as well as access to all the relevant information for vestings, transaction and real-time disclosure information on a per-participant, per-grant, per-tranche level across various divisions in an organisation.
- Test and Design: Testing functionality is crucial in evaluating a proposed incentive plan and formulating a plan that aligns the company’s objectives with those of the employees. Don’t forget that every set of plan terms results in different administration and accounting requirements, and the extent of this should not be overlooked.
- Support: Having adequate system and technical support is the make-or-break in selecting an incentive plan technology. Understand who will service your standard and complex incentive plan queries – is it a call centre agent or someone in-the-know?
When evaluating an incentive plan management tool, it is imperative to consider how processes can be integrated to achieve better automation for all those involved in managing an incentive plan. After all, a holistic approach is critical for success.
ShareForce’s Role in Incentive Plan Management
ShareForce is a world-leading web-based platform that brings automation and simplicity to managing equity or cash-based employee incentive plans.
Specialising in incentive plan technology solutions, we offer an end-to-end automated approach to managing even the most complex requirements of the award life cycle and your specific requirements.
If you’re interested in comparing your current processes to ShareForce, book a demo with us by filling in the form below or or visit www.shareforce.net/contact