Let me begin with some key findings and conclusions drawn by Bersin & Associates in their “Essential Guide to Employee Performance Management Practices” (2008). Their research, which captured responses from more than 700 HR, Learning and Development, and IT professionals (representing 30% of Fortune’s top 100 companies), included such findings as …
- 40% do not believe their current employee performance management practices play a critical role in achieving business goals and executing business strategies
- 45% say managers in their organization have difficulty differentiating between high and low performers; and
- 38% of line managers do not believe they have the training or skills needed to effectively support the process
But those interesting, likely discouraging numbers aside, the coup de grâce for me was this simple, bottom-line statement from Bersin’s research efforts in this area: “Employee performance management is one of the least liked management processes in organizations today.”
My own, albeit informal research in this area started in the mid 80’s when I was asked to automate the Performance Management Process at a 100-year old brokerage house on Wall Street. I commenced that “research” by asking some HR colleagues, a few line managers and a few employees why they thought we needed the process. My HR colleagues said “how else can you fire someone without getting sued?” My Line Manager colleagues said “how else can we back-up our compensation decisions without having HR on our backs?” The employees I spoke with generally said “frankly, we’re not sure how we benefit from this process.” True story.
One key take-away for me back then, one which I’m still waiting for evidence of its non-relevance today, is that “there’s a big difference between a Performance Documentation Process (owned by HR) and a Performance Nurturing Process (owned by the entire organization).
The typical Performance Appraisal process purports to improve performance, but the disconnect is that it typically doesn't establish or strengthen employee commitment, engagement and/or satisfaction. In the absence of having those effects, how can the process improve employee performance?
A related research finding was detailed in a Gallup Management Journal (GMJ) survey of U.S. workers conducted in 2006: Only 29% of employees are actively engaged in their jobs and 54% of employees are not engaged at all. One can only imagine how low these engagement figures are since the onset of the global financial crisis.
Thursday, January 21, 2010
Sunday, January 10, 2010
HR Systems, Data Integrity and Math 101
A quick multiple choice question to make a point:
When the typical Line or Department Manager receives a data extract from their primary HR System, perhaps to kickoff a Salary/Performance/Focal Review process with their employees, any data issues noted in that data extract are dealt with in the following manner:
(a) The Line Manager receiving the data extract completes a data correction form on-line for all employees with incorrect data, and requests a revised data extract.
(b) The Line Manager calls or emails their HR contact and advises them of the issue … such as an employee in the wrong department, or with an incorrect title or employment status … and requests a revised data extract.
(c) The Line Manager, in the interest of time (particularly if they have many employees in their charge) makes the appropriate corrections in their own personal excel spreadsheet of employee data, and makes a note to inform HR.
If you selected ‘C’ above, you are clearly not alone. Offline spreadsheets of employee/job/organizational data are often maintained by Department Heads in many large organizations today because of some level of distrust of the data provided by their central HR System, and/or the recognition that they want to rely on a system or data repository that they 100% control and actually own!
Offline spreadsheets maintained by Line Managers are the Achilles’ heel of the HR Technology domain. The cost associated with hundreds of Line Managers (or their staff members) having to maintain these “rogue spreadsheets” of employee data -- coupled with the cost to the organization of perpetually reconciling multiple sources of the same employee data -- can translate into millions in larger organizations.
Data Integrity and "Math 101"
- While there are hundreds of pieces of information maintained in a robust HR system or HR-ERP (including historical data), there may be only 25 workforce-related data elements that the average line manager (i.e., department or business unit head) really cares about when making critical workforce or employee decisions.
- An organization of 2,500 employees with a very modest data inaccuracy or obsolescence rate of only 3%, is dealing with 1,875 pieces of “high-value” employee information that are incorrect (2,500 employees x 25 data elements x .03). A considerably larger 10,000 employee organization with the same very modest data inaccuracy rate would be dealing with 7,500 pieces of high-value employee information that are incorrect and unreliable ... 7,500!!!
Data Integrity Feedback Loop: Line Managers should have a very quick, automated mechanism for advising HR that certain employee data may be wrong … including a Feedback Loop which confirms back to the “Data Challenger” that the data issue they surfaced is being researched and, if necessary, corrected IN THE RIGHT PLACE.
This will create a sense of HR system ownership outside the HR department, and gradually begin to put duplicate data repositories out of business.
When the typical Line or Department Manager receives a data extract from their primary HR System, perhaps to kickoff a Salary/Performance/Focal Review process with their employees, any data issues noted in that data extract are dealt with in the following manner:
(a) The Line Manager receiving the data extract completes a data correction form on-line for all employees with incorrect data, and requests a revised data extract.
(b) The Line Manager calls or emails their HR contact and advises them of the issue … such as an employee in the wrong department, or with an incorrect title or employment status … and requests a revised data extract.
(c) The Line Manager, in the interest of time (particularly if they have many employees in their charge) makes the appropriate corrections in their own personal excel spreadsheet of employee data, and makes a note to inform HR.
If you selected ‘C’ above, you are clearly not alone. Offline spreadsheets of employee/job/organizational data are often maintained by Department Heads in many large organizations today because of some level of distrust of the data provided by their central HR System, and/or the recognition that they want to rely on a system or data repository that they 100% control and actually own!
Offline spreadsheets maintained by Line Managers are the Achilles’ heel of the HR Technology domain. The cost associated with hundreds of Line Managers (or their staff members) having to maintain these “rogue spreadsheets” of employee data -- coupled with the cost to the organization of perpetually reconciling multiple sources of the same employee data -- can translate into millions in larger organizations.
Data Integrity and "Math 101"
- While there are hundreds of pieces of information maintained in a robust HR system or HR-ERP (including historical data), there may be only 25 workforce-related data elements that the average line manager (i.e., department or business unit head) really cares about when making critical workforce or employee decisions.
- An organization of 2,500 employees with a very modest data inaccuracy or obsolescence rate of only 3%, is dealing with 1,875 pieces of “high-value” employee information that are incorrect (2,500 employees x 25 data elements x .03). A considerably larger 10,000 employee organization with the same very modest data inaccuracy rate would be dealing with 7,500 pieces of high-value employee information that are incorrect and unreliable ... 7,500!!!
Data Integrity Feedback Loop: Line Managers should have a very quick, automated mechanism for advising HR that certain employee data may be wrong … including a Feedback Loop which confirms back to the “Data Challenger” that the data issue they surfaced is being researched and, if necessary, corrected IN THE RIGHT PLACE.
This will create a sense of HR system ownership outside the HR department, and gradually begin to put duplicate data repositories out of business.
Saturday, January 2, 2010
5 new HCM concepts that could have legs in 2010!
A few HCM concepts I've been noodling on for some time ...
1. Employee Value Indicators … various dimensions, numerically scored, that complement a Performance Rating or revenue-generation metric, thereby presenting a broader picture of the employee’s value to the organization. These dimensions might include latent competencies (see below), trajectory of an employee’s engagement level, # of job candidates referred who become 'A' players, impact of mentoring activity, other impacts from participation in company's social network, and trajectory of the value of an employee’s particular competencies (i.e., will become more or less business-critical).
2. Latent Competencies … competencies that employees possess that might be invisible to the organization, and therefore not leveraged, because they are not relevant to their current job function. Various HCM systems only track competencies at the position level.
3. Total Realized Value (or “TRV”) on HCM Solutions … is the degree to which the broad potential value that an HCM Solution can deliver gets marginally (or even significantly) reduced due to such factors as system underutilization, improper utilization, ineffective change management (causing lower system adoption), data model compatibility issues, on-going system integration issues, the need to alter well-conceived business processes to accommodate system idiosyncrasies, or the need to develop and maintain elaborate competency models.
4. Job Milieux … as implied by this French word for environment or setting … Job Milieux factors might include a direct boss’ management style, whether work is team or individual-based, whether the culture at work is formal or informal, whether the organization is in rapid change mode or more steady-state, etc. The importance of Job Milieux is that these factors could all potentially influence job performance, but influence performance or productivity differently for different employees.
5. Total Rewards Optimization … Related to the notion of Personalizing rewards, but also factoring-in both cost as well as value perceived by the individual, employers will likely be putting forth more effort toward maintaining an “optimal rewards and engagement/retention plan” for every key employee. The objective is to generate the biggest bang (perceived value = better retention and engagement impact) for the buck. Inherent in this exercise is the fact that (a) non-financial types of rewards (like an opportunity to be exposed to different parts of the business) can have the biggest impact in some individual situations, and (b) individual situations are not static very long so these plans must be updated as needed.
1. Employee Value Indicators … various dimensions, numerically scored, that complement a Performance Rating or revenue-generation metric, thereby presenting a broader picture of the employee’s value to the organization. These dimensions might include latent competencies (see below), trajectory of an employee’s engagement level, # of job candidates referred who become 'A' players, impact of mentoring activity, other impacts from participation in company's social network, and trajectory of the value of an employee’s particular competencies (i.e., will become more or less business-critical).
2. Latent Competencies … competencies that employees possess that might be invisible to the organization, and therefore not leveraged, because they are not relevant to their current job function. Various HCM systems only track competencies at the position level.
3. Total Realized Value (or “TRV”) on HCM Solutions … is the degree to which the broad potential value that an HCM Solution can deliver gets marginally (or even significantly) reduced due to such factors as system underutilization, improper utilization, ineffective change management (causing lower system adoption), data model compatibility issues, on-going system integration issues, the need to alter well-conceived business processes to accommodate system idiosyncrasies, or the need to develop and maintain elaborate competency models.
4. Job Milieux … as implied by this French word for environment or setting … Job Milieux factors might include a direct boss’ management style, whether work is team or individual-based, whether the culture at work is formal or informal, whether the organization is in rapid change mode or more steady-state, etc. The importance of Job Milieux is that these factors could all potentially influence job performance, but influence performance or productivity differently for different employees.
5. Total Rewards Optimization … Related to the notion of Personalizing rewards, but also factoring-in both cost as well as value perceived by the individual, employers will likely be putting forth more effort toward maintaining an “optimal rewards and engagement/retention plan” for every key employee. The objective is to generate the biggest bang (perceived value = better retention and engagement impact) for the buck. Inherent in this exercise is the fact that (a) non-financial types of rewards (like an opportunity to be exposed to different parts of the business) can have the biggest impact in some individual situations, and (b) individual situations are not static very long so these plans must be updated as needed.
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