When Workday’s “Power of One” fails: An example from Payroll-Compensation integration

LONDON

At the turn of the millennium, PeopleSoft, the then-undisputed HR tech leader, asked me to join them as Product Strategy Manager to help them with their European payrolls. Until 2001, PeopleSoft only had payroll for North America. For other countries the spin was that what really mattered was to have all your employees’ key data in one global system (Core HR) which you would then interface to various downstream systems (Payroll, Finance, Time Tracking, Expenses etc.) depending on needs. The underlying message was that Payroll was just an engine, not a strategic tool and therefore there was little value in having it in the same system. Actually you didn’t even need to have it in-house, just outsource it to ADP and the likes.

That was until PeopleSoft realized there was a lot of money in the Payroll business and that there was a lot of value in a Payroll-Core HR/Compensation integration after all. That’s when they built a global team, of which your humble servant was part of covering France and Spain. In a payroll blitzkrieg unheard of in the industry until then and since, we brought to the market close to a dozen payrolls (France, Spain, UK, Germany, Switzerland, Netherlands, Japan, Australia and a sprinkling of other countries).

Suddenly, in a not-so-subtle move that I found highly entertaining, Payroll/Compensation integration was all the rage. At every meeting with customers, at HR tech conferences, in press and analyst encounters, our message was that an HR system without payroll wasn’t worth the pixels it showed on your PC monitor. You needed the Payroll module as a mandatory accessory to your global Core HR/Compensation.

Fast forward two decades and to today’s indisputable HR Tech leader, Workday. Just like its forerunner, Workday started with a limited number of payrolls (and no finance tool), so it was all about having a global core HR system, the rest was dismissed with a wave of the hand as optional, ancillary and unimportant. Then came finance and the slow drip feed of payroll and, lo and behold, out of the cloud emerges the fundamental, indispensable need to be able to integrate both within the same system with the same data model and UI (which now goes by the fancy term of UX). Workday coined the phrase of the Power of One which as they say in their marketing material does not “require any process or configuration changes on your end”.

Well, as we all know, there’s marketing and there’s the truth. Or, to paraphrase Mark Twain, there are three types of lies: lies, statistics and software marketing (truth be told, Workday is certainly not the most egregious perpetrator here; the Oscar probably goes to Oracle and their fanciful claims about basically every product they throw at their customers.)

But, back to Workday, since this post is about Workday. There are many examples where the Power of One is contradicted by the reality of many. The one that I want to focus on deals with one of my favorite Workday and HR topics: Compensation under its various guises: Core Compensation, Payroll and Compensation Review.

Compensation Review is the process whereby you increase employee salaries and award them bonuses and stocks, usually once a year, based on their performance (and the company’s.) To run this process Workday has a pretty strong module called Advanced Compensation, on which I got certified in 2019. I’m not going to inflict boring technical and business details on you, but suffice it to say that in order for a bonus to be calculated you need a reference compensation if your bonus is going to be a percentage rather than an amount. That reference compensation (which is called Compensation Basis in the Workday lingo) is usually the standard salary (Total Base Pay in Workday-ese ) or it can be created from scratch to include any compensation component such as allowances as long as these compensation components are…available in Workday. If they are not (such as overtime which is often part of another tool, Payroll) then you need to load those amounts back into Workday using some esoterically named Eligible Earnings Override.

 

The villain revealed

So far so good. Everybody understands that Workday cannot retrieve a data not held within Workday. And since a majority of Workday customers use third-part payrolls (especially outside North America), it is perfectly understandable that these amounts need to be extracted from your payroll system, appropriately formatted  and then loaded into Workday for Advanced Compensation’s consumption.

 

Except that, and here’s the rub, there are many customers who use Workday Payroll. In that case you’d assume from Workday Payroll to Workday Core/Advanced Compensation the data should flow as easily as the River Thames under London Bridge.

Wrong!

Rather than being able to point your bonus calculation to the relevant Payroll earnings (or sum thereof) you still have to go through the whole cumbersome task of extracting/preparing the data in payroll, then loading it into Workday, then going and referencing it for your bonus calculation.  Where is the Power of One? Looks more like the madness of many ─ as we all know how messy integrations are. When you’re using separate systems, no queda más remedio as my Spanish friends would say, you have to build that interface. But why would you have to do that when you’re running the SAME system? That’s what you were told and sold: buy one and no integration need, right?

I heard that Workday is planning on fixing this, which is long overdue. But why did you even have the issue in the first place?  Bad product design happens everywhere, even with the best. But then be a little modest when taunting your Power of One which has been found lacking.

And don’t get me started on absence management. With Workday you can track your employee absences in Core HR, in Time Tracking and via Payroll as well. In Core HR you have it more than once: the standard Absence features and the Leave of Absence functionality. Like estranged siblings, neither seems to be aware of the other’s existence. Another product strategy gone mad.

Workforce Planning? Integrated only in name. Another Power of One derailed.

Alright, I thing I’ll stop here. You get my drift. Time for Workday to spend a bit less time on Marketing and more on Product Strategy and Development.

 

(This is the latest in a series of posts on Workday. The most popular feature below. Many more can be found by searching chronologically the list of posts on the right-hand pane.

-Feb. 2021: "10 features Workday should deliver - yesterday!"

-April 2016: "SOW - A Comparison of 3 Global Cloud HR vendors: SAP, Oracle and Workday"

-Feb. 2015: "An open letter to Workday's Bhusri and Duffield: Time to fix Europe"

-May 2011: "PeopleSoft vs Workday - Old vs New" )

 

(The Global HR Technologist is enjoying a 4-day Jubilee Holiday in London, a place he has been visiting relentlessly on business and pleasure for over three decades now, going back to when he was a teenage student in Britain under the Iron Lady’s rule. “When a man is tired of London, he is tired of life; for there is in London everything that life can afford,” said Dr. Johnson a couple of centuries ago. So true now as then.)