Professional Documents
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Automatic for the people: why automation of performance management is an organisational imperative
The automation of performance and talent management processes brings a multitude of benefits, which make it, arguably, a prerequisite for effective people management. A bespoke approach to online performance management allows HR professionals to meet the specific needs of an organisation, thus creating competitive advantage.
Executive summary
98% of best in class companies use an employee performance management process, versus 59% of other firms.
- The Employee Performance Management Benchmark Report: Managing Human Capital for a Competitive Edge. Aberdeen Group, 2006. Employee performance management is a fundamental business process that too many organisations fail to get right. It is critical to realising the full potential of individuals and maximising business performance. Leading organisations recognise the value of their workforce and aspire to create a high performance culture. Most achieve this through the implementation of performance management processes that are underpinned by an online system.1 The secret to success is to adopt a bespoke approach, implementing a system and process that is the best fit for the company rather than best practice. Our experience shows that what works for one company may fail for another. Despite the advantages of online performance management systems being well-known, some HR professionals have been slow to respond, preferring to follow rather than lead. Theres also been a reliance on off-the-shelf automated systems that incorporate software vendors definitions of best practice. This is not the most effective option for the majority of larger companies. We argue instead that, when automating performance management, HR professionals should shape and deploy a process that is tailored to fit the specific needs of their organisation, thus creating competitive advantage. An historical challenge for HR professionals has been getting buy-in from senior executives with the need to deliver a strong business case demonstrating the return on investment. Well set out exactly how implementing the right online solution for performance management can benefit your business and demonstrate what returns you can expect. Well also present case study examples of HR practice that employ bespoke automated systems and conclude with a guide for applying this approach. For clarity, we define performance management as a process that establishes a shared understanding of organisational success and an approach to leading and developing people to ensure this is achieved.
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A huge number of employees are dissatisfied with performance appraisals. Our research shows this is due to the lack of clarity and involvement in setting goals.
- Performance Management Review: An analysis of the ETS Employee Survey. ETS plc, 2009.
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Anticipated skills shortages mean that talent management, and specifically, development of a management and leadership pipeline, has been identified as the single biggest business challenge facing companies.
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Case study 1
An international media company with world-leading businesses in education, business information and consumer publishing appointed ETS to devise an online talent management system for its top 250-300 performers. The system was to take over from spreadsheet-based data capture with managers forms returned by email, manual data entry and no facility to generate reports. The bespoke online solution devised allows straightforward administration access and easy collation of data via a standardised form, which is then transferred to one central database Simple file management means instant and consistent communication with managersabout the process, with the intuitive interface prompting managers to access activities they need to complete A wealth of reporting options are available reports can be generated centrally or locally by managers with advanced reporting to both Excel and PDF (Adobe Acrobat). Report Packs in high-quality PDF can be generated at the click of a button for talent review meetings (see figure 1 below)
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Process improvement
Increasing employee retention / lower costs associated with losing employees o Employees are more fairly recognised and rewarded for their efforts o Accurate identification and reward for high performing employees Improvement in employee engagement and development o Employees are clearer on objectives and more motivated to achieve o Helps managers identify appropriate development areas for individuals
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Organisations automating performance management can easily realise a 50% - 200% return on investment from efficiency and compliance alone.
- The Business Case for Performance Management Systems Josh Bersin, 2008.
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Case study 2
ETS was appointed by a leading global manufacturing group to streamline its performance management process. The company, which has manufacturing plants in over 25 countries, had previously run ad-hoc performance reviews at each site, using location specific primarily paper-based forms. However, this approach offered no consistency of process or data, and a huge administrative burden on local HR to collate, analyse and report. With no direct involvement by a central HR function, talent management and succession planning was enormously difficult and time consuming. ETS implemented a single online performance review form for all locations, covering 5,000 people Central and local HR has real time sight of the process and can monitor participation levels and manage communications effectively with participants and managers The online system allows real time reporting of data, which helps with both the qualitative assessment of objectives set, as well as allowing access to information for talent and succession planning The usability of the online tool and ability to access the process remotely has resulted in a sharp increase in the level of participation as well as the overall completion rate
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Case study 3
ETS worked with a leading high-street entertainment retailer to overhaul its performance development review. The organisation had an existing online solution but employee buyin was low due to its complexity and look and feel. The HR team was finding it hard to sell the process to stakeholders due to a lack of interest in the process. The organisation also ran a 360-degree feedback process using a separate system. Furthermore the performance development review offered practically no reporting functions and, as a consequence, the HR team were not getting value from the process. ETS devised a combined 360-degree feedback and performance development review (PDR) solution The look and feel incorporated the organisations very specific brand identity, enhancing usability and increasing its appeal to users The process was more streamlined and intuitive making objective-setting, monitoring and interim reviews more straightforward The solution featured powerful administration tool to monitor, track and promote use of the process among employees 360-degree feedback reports reflecting the brands unique image could be generated, which included a one page summary enabling quick identification of the key findings of the report ETS introduced HR level reporting enabling sharing of reports with the business and easy extraction of data from the system
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Align
Understand the organisational context, underlying business drivers and broader organisational culture such knowledge is critical when identifying key design principles and success factors for the project Identify and agree the scope of the project including the timescale to achieve your identified critical success factors Engage key stakeholders to ensure engagement and buy-in from the outset
Define
Develop the project scope and define the solution, seeking input from relevant stakehoders Scope specific requirements of the solution based on best practice techniques and undertake organisational research to inform design Assemble project team and run definition workshops with representation from across the business to define system requirements and associated reports and outputs Ensure best fit solutions are underpinned by best practice advice that draws on relevant research and latest trends
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Develop
Ensure all systems and processes are developed in line with the solution specification incorporate regular project reviews and note changes The completed design should be validated across the business before signing off. This validation process should include subject matter expert reviews, through user acceptance and quality testing Agree, design and deliver the supporting processes and materials required for the roll-out of the solution (e.g. training documentation) and
Deliver
When introducing the new solution to your business, ensure the associated communications and training are timely, targeted and effective Ensure that youre familiar with all elements of the solution and are able to answer questions from across the business Hold a project review meeting to discuss the project to date and document what has worked well and what improvements may be needed
Enhance
Use the reporting from your solution to gain insight into your workforce. Analyse and interpret your results, using the data to inform strategic people focused decision making that delivers tangible business improvements. Evaluation is fundamental to defining the success of any process. You must be able to demonstrate the value of the project to your business, identifying exactly where it has had an impact
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Conclusion
The number of organisations automating their performance management processes continues to grow at pace. Of those not yet using automated systems, there is widespread awareness of the benefits that it offers and as research has shown, there is a resolve to automate soon. The biggest challenge for these organisations remains convincing senior management of the business benefits and getting their buy-in. As weve demonstrated though, there is a very clear business case for doing so, with substantial return on investment, streamlined and more time efficient people processes and, most importantly, a positive impact on business performance.
About ETS
Dominic Wake and Ben Egan also contributed to the content of this report. To contact Dominic about this report, please send an email to dominic.wake@etsplc.com or call +44 (0)1932 219949. ETS provides business-focused consultancy and custom-designed technology to meet the performance management, employee research and 360-degree feedback needs of worldleading companies. We combine innovative technology solutions with practical experience to designed a solution that fits your business needs. ETS delivers our clients ideal world, which means that our solutions exactly match each clients corporate culture and processes: we listen to you needs; we do not expect you to bend to our solutions. Where appropriate, we develop the new processes needed to meet your people objectives. Where it is possible, we can integrate with, and automate, any existing HR processes so that new and old work together. Expert Training Systems plc (ETS) Hersham Place Technology Park 41-61 Molesey Road Hersham Walton-on-Thames Surrey KT12 4RS www.etsplc.com info@etsplc.com HR means business blog www.etsplc.com/blog Twitter @etsplc
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References
1.
The Employee Performance Management Benchmark Report: Managing Human Capital for a Competitive Edge. Aberdeen Group 2006. Performance Management Review: An analysis of the ETS Employee Survey. ETS plc 2009. The Business Case for Performance Management Systems Josh Bersin 2008. Performance Management Review: An analysis of the ETS Employee Survey. ETS plc 2009. High-Impact Talent Management: Trends, Best Practices and Industry Solutions. Bersin & Associates 2007. Cornell.edu/research Aberdeen group 2008. Aberdeen Group Employee Performance Management 2009 Jayson Sabba CedarCredstone 2010 2011 HR Systems Survey. The Business Case for Performance Management Systems Josh Bersin 200833. Aberdeen Group Managing Employee Performance 2008. Aberdeen Group Employee Performance Management 2009 Jayson Sabba.
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