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Performance Management has been unsuccessful in many organizations. Traditional annual appraisals and development programs are no longer appreciated by employees and employers alike. The reason – they aren’t employee centric, meaningful and do not give tangible results.
58% of organizations rate their performance management systems as “C Grade or below.” Statistics shows that only 14% of organizations are happy with their performance management system and over 90% managers are unhappy with the existing system as it doesn’t cater to employee development needs. Clearly, there is something wrong and ineffective when it comes to the existing Performance Management processes. Adobe was one of the first organizations to do away with Traditional Annual Appraisals in 2012 and the company opted for Continuous Performance Management along with introducing a concept of frequent check-ins and feedback discussions. No doubt, implementation of CPM has given significant growth in workforce productivity and sudden decrease in voluntary turnover by 30%.
The Big Transition – Continuous Performance Management
According to Bersin, Deloitte Consulting LLP, “Continuous Performance Management (CPM) is defined as an approach that fosters continuous conversations between managers, direct reports, and teams about goals, work progress, and performance to date (in the form of constructive or positive feedback). CPM aims at smoothening the process of ongoing one-on-one conversations between managers and direct reports, periodic performance and development conversations, and real-time collection of performance feedback data within immediate work circle.”
In the past few years, there has been a steady shift from competitive evaluation model (where employees are rated and scored on some parameters to evaluate their performance) to ongoing coaching and development model (where an employer is more focused on helping employees become better, perform brilliantly and learn new skills rather than managing scorecards). Employers are now embracing the latter model to meet employee development needs, enhance employee experience, and build a high performing workforce. This has become a clear roadmap to keep the workforce engaged, motivated and happy. And who doesn’t know that an inspired and satisfied workforce leads to better business performance and profitability!
Continuous Performance Management Best Practices
Performance Management practices are still undergoing much-needed redesigning. According to the new model, traditional annual appraisals and employee development approach has transitioned into a continuous, real-time feedback and coaching process combined with frequent manager-employee interactions. This new approach accelerates accomplishment of goals, makes performance assessment more meaningful and prioritizes employee’s career development than rating and scores.
With annual performance evaluation cycle, the key challenge was to deal with dissatisfied employees due to once-a-year feedback and absence of systematic skill development programs. Employees expected more from their managers than just one or two feedback sessions. Here are the few best practices that made CPM more popular and result-driven.
Periodic Discussions on Goals – At all time, keep employee goals aligned with team goals and business objectives.
Frequent Performance Check-ins and Conversations – Frequent interactions between managers and employees help in identifying areas of improvement in performance and behaviour.
Constructive Feedback – Criticism goes a long way if it is given in a constructive and thoughtful manner. Provide feedback that make employees understand their weaknesses and strengths.
Learning and Skill Development Initiatives – Learning and coaching on ongoing basis gives opportunity to accelerate career growth.
Performance Improvement Checks – Continuously measure performance (through reviews) to identify if the corrective action plans are working in favour.
Continuous Recognition and Appreciation – Keep employees motivated with ongoing recognition for their hard work and effort.
Unlock the Potential of Continuous Performance Management
Over the past few years, numerous articles and discussions have taken place about the significance of transitioning from once-a-year to Continuous Performance Management, and how organizations such as Adobe, Accenture, Deloitte, and Cisco have seen significant increase in overall workforce productivity and development.
CPM initiatives have focused exclusively on development, employee experience, workforce engagement rather than just performance. Some of the benefits that have been realized with implementation of CPM are:
» Increase in employee engagement and performance
» Low employee attrition and dissatisfaction
» Foster culture of continuous learning and development
» Improvement in organizational agility
» Positive transformation in work culture in organizations
Though everything sounds good in theory, the bigger quest is to identify right technology and solutions that enables organizations to implement Continuous Performance Management successfully.
Technology has been a greatest enabler in implementing CPM effectively. Some performance management software vendors have closely studied the concept and significance of CPM to help organizations in adopting it easily.
Though technology providers have developed solutions to meet the rapidly growing needs of CPM, organizations are yet to embrace this approach.
What are you doing to retain top talent and improvement your performance evaluation methodology? Will Continuous Performance Management be your choice too?
Let’s start with the universally accepted principle that configurability, like the rest of the “abilities” relative to HCM systems — usability, scalability and inter-operability — are the hardest aspects of a product offering to dramatically improve. These platform attributes (vs. features) consequently should be front and center when evaluating prospective HR technology, because if high marks aren’t earned now, that likely won’t be changing anytime soon. Conversely, “features” are basically being added every product release cycle, which are occurring much more frequently in the cloud HCM era.
This post looks at the various strategic components of an HCM platform from the standpoint of where very robust configurability — or the ability to determine how the system behaves based on user defined rules, parameters and other conditions – matters most. And this control over the system, whether related to defining workflows, process or data handling rules for different populations, or other process nuances, should largely be within the purview of the HR or HRIS organization … with the exception of the most complex configurations.
My perspective on where configurability matters most is based on operating for three decades on all sides of the HR and HR Technology domain. Additionally, a key point to highlight up-front is that while HR technology process areas are arranged below according to where a configurability toolset is most critical (listed from least to most), all strategic HCM areas or more transactional / administrative HR areas have configurability-related requirements. This discussion is therefore about relative importance of the configurability toolset, not where it is or is not important.
Configurability Considerations by Strategic HCM Area
Learning Management: Examples of areas often associated with configurability requirements and capabilities include branding, workflows (e.g., requests and approvals), courses offered by learner profile or organizational criteria, curricula or course-chaining rules, eligibility drivers, test results as drivers, e-Commerce rules (to charge-back the learner’s cost center), assessment steps and options, gamification parameters, governance rules around social learning and 3rd party content, etc. Learning management systems absolutely need to be configured, and arguably as much as any other strategic component of an HCM system in order to drive ROI. The reason why I started off mentioning LMS tools is because configurability rules tend to be relatively straightforward and standard from customer to customer; consequently the flexibility and sophistication of these capabilities probably won’t be a major source of product differentiation.
Total Compensation Management: Examples include eligibility to participate (i.e., be covered within) a particular compensation process, salary increase rules and guidelines (aka “grids”), total compensation elements and parameters, total rewards statement options, long-term incentive plan and deferred compensation plan parameters, and something we will see more of going forward given the importance of personalization in achieving a superior employee experience: total compensation trade-offs and equivalencies; e.g., ability to “trade” X portion of an annual salary increase for a type of compensation with more upside but also greater risk. This area of HCM is being mentioned second because while configuration needs such as specifying increase guidelines and eligibility rules largely have common structures across companies, long term incentive data handling rules and plan designs can vary significantly.
Recruiting: Examples of process aspects that can have very broad and/or complicated configurability requirements — thus making the configurability toolset’s sophistication and flexibility more of a product differentiator — include branding the candidate experience, job posting rules, a myriad of rules for automating candidate relationship management and recruitment marketing activities, interview sequencing parameters, when different screening steps apply, offer letter content scenarios, background checking steps, assessment test applicability and access to results, when search firms and agencies can be used, workflows related to starting salary and what data gets passed to the employee record.
Given all the different flavors of recruiting-related configurability needs, does another talent management automation area exist where the criticality of configuration capabilities is on-par (or sometimes even more critical) than recruiting? Yes.
Performance Management: Recruiting and performance management are fairly close as far as being HCM areas where a flexible and powerful (but also straightforward to use) configurability toolset is a huge difference-maker. The key reason why I’m asserting that performance management is the HCM process or system component where these capabilities matter the most is the following: Organizations often use more than one system for talent acquisition, so all of the impactful configuration capabilities don’t have to be provided in one product. Performance management on the other hand, including in the context of modern day continuous performance management (“CPM”) and real-time coaching, is almost always handled through just one product’s configuration capabilities; therefore, the performance management product used must have a configurability toolset that is frankly off the charts.
A sampling of such capabilities include aspects related to process design (e.g., 360 degree feedback or something else; as well as whether the process is goal or competency-centric or both), the process per each population segment or business area, weightings for goals and/or competencies, capturing coaching content and actions needed/taken, participation parameters, whether other “employee value indicators” are captured in the process (e.g., employee mentors others even though it’s not part of their job purview), how data is passed to other systems such as learning management, how kudos or other types of recognition are given, etc. And if an end- customer decides they want to capture something a bit more esoteric such as which competencies might become increasingly important or the opposite? Well this is where the PM tool’s flexibility and power are also on display.
If you’re in the market for enterprise performance management software that excels and differentiates by allowing users, including non-technical users, to shape and mold the system any way they need to, now and in the future, you should focus on configurability capabilities. The more impressive these are, the longer you will use the product when your industry counterparts are in replacing mode, and the shorter your time-to-value will be.
2018 has seen a shift in HR’s focus area. The emphasis is on “Employee Experience” now. It is about the experience an employee gets at work. A recent study has found that 83% of HR leaders cite “employee experience” as an important factor for organizational success. By offering a valuable workplace experience that meets professional needs and expectations of the employees, any business can drive employee satisfaction, workforce engagement and loyalty.
The post contains a case study of one the largest financial service providers dealing primarily in remittances, foreign exchange and bill payment solutions. The company has a large support staff of more than 2,200 employees spread across 800 offices in 31 countries to provide end-to-end financial services to worldwide customer base.
The company faced challenges in efficiently managing performance appraisal process. Their subjective performance appraisal process resulted into unfair, biased and meaningless employee evaluation. Managers believed their instincts and gut feel to evaluate subordinates’ performance and behaviour. Overuse of subjective evaluation led to some risks and employee dissatisfaction. The company faced several difficulties in:
» Managing complex appraisal data for employees working at different levels.
» Managing numerous appraisal parameters and complex data.
» Deciding incentives for employees (with their consent) and paying them accurately.
» Establishing an unbiased and continuous performance management process.
» Involving employees in the appraisal process to increase workforce engagement and satisfaction.
Challenges were discussed with Empxtrack team with an aim to automate the appraisal system and get an affordable solution. The client needed a highly customizable, automated Performance Appraisal software that could manage their complex and vast appraisal data, in a systematic way using simple workflows.
After thoroughly analysing and understanding client’s requirements, Empxtrack team soon got on the job to provide the solution. A highly customizable appraisal system was designed that streamlined goal setting and performance review processes. The system had the capability to easily handle complex appraisal data in an easy and systematic way. Empxtrack appraisal system efficiently helped the client to map fields and score data of a large file with more than 162 fields.
The process was designed such that all stakeholders were equally involved in the goal setting, review and deciding incentive for each employee. Employees and managers got better visibility of employee goals and achievements.
Image 1: The image shows a part of the evaluation process with overall goal achievement for each parameter. The metric score card had multiple categories with several parameters, each parameter was assigned a weight.
Employees could view goals along with achievements for a specific period. Employees’ consent was taken before processing and finalizing their incentives and appraisal scores. They also had the option to reject the suggested incentive whenever there were issues. The system gave transparency and better visibility to all stakeholders, including HR, Reviewer, HOD and others, in employee achievements.
Image 2: The image shows final achievement score of an employee, appraiser’s feedback and a consent from the employee. The highlighted section shows an employee’s over achievement (105%) and consent taken before finalizing achievement percentage.
“Empxtrack turned out to be the perfect solution for our business as we aimed to introduce a more formal and streamlined annual goal-setting and performance evaluation process in 2018. It is simple to set up, requires minimal time and effort to administer, and user-friendly for our employees. In addition, the customer service team is highly accessible to ask questions and amenable to recommendations for future enhancements. Above all, the system is extremely affordable compared to other solutions on the market”
Janine Ambrose Salina, Director HR, Busch LLC
This case study is about the largest manufacturer of vacuum pumps, blowers, compressors and low-pressure technology products in the United States with more than 500 employees. The company, Busch LLC, has a huge clientele spread across the globe and it comes with more than 50 years of expertise in manufacturing and offering customized solutions for vacuum applications.
The organization believes in employees’ career development along with its growth. To streamline its performance management process, the client was looking for a highly customizable solution on ADP marketplace that could be integrated with their ADP Payroll.
Busch LLC already had ADP Workforce Now® as their HR and payroll system of record and focused on enhancing and expanding their entire HCM ecosystem. They started looking for a comprehensive, customized Performance Management system on ADP marketplace to identify solutions that could easily be integrated with ADP Workforce Now and could streamline and expand company’s HR capabilities and processes. Mapping to their Performance Management process to meet their existing needs was the top priority for Busch LLC. The main requirements were:
To customize competencies. Along with three core competencies that each employee had, based on the job roles, employees were encouraged to select 3 more competencies of their choice (called “Dynamic” Competencies), that could help in their career development and learning. It was one of the pre-requisites for performance appraisal.
Employees were expected to take approval from managers when adding dynamic competencies but doing this manually was time-consuming and difficult.
To identify changes made in dynamic competencies. Managers faced difficulty in identifying and tracking status of the changed dynamic competencies.
This led to two problems: (a) It became impossible to identify employees who never changed their competencies and managers remained unaware about their development needs. (b) It was difficult to identify employees who frequently changed their competencies and were still not able to perform better.
To identify employee development needs. Managers had difficulty in ensuring that employees had the prerequisite skills and knowledge that were needed to meet SMART goals and objectives. Busch faced a critical need to deploy a solution that could help identify employee development needs.
To enable managers to track progress of employee goals on regular basis. There was no way to monitor employee achievements and track performance on a continuous basis. Thus, making it impossible for managers to turn up with performance improvement plans at the right time.
These challenges resulted in loss of productivity which impacted team’s efficiency, company’s growth and profits. The company discussed these challenges with Empxtrack team, with an aim to focus on employee development, improve employee productivity, streamline the process of competency mapping and increase overall business outcomes.
Busch LLC expected Empxtrack to enable cross-company strategic alignment to help the workforce reach aggressive business objectives.
Empxtrack was already listed on ADP marketplace and could be easily integrated with ADP Payroll. Busch LLC finalized Empxtrack Performance Management to manage performance reviews for their employees.
Data integration with ADP became easy and convenient. Through Weekly scheduler, employee data was easily integrated from ADP to Empxtrack. The profiles of all employees were updated, and information about new employees was added, without additional effort.
Empxtrack provided solutions to overcome all complex issues, including dynamic competency mapping, tracking employee performance in real-time, identifying employee development needs and monitoring progress of employee goals. Empxtrack team fulfilled all customization requirements without additional cost.
With implementation of Empxtrack, employees were easily able to add dynamic competencies in the performance appraisal module in just a few clicks and get approval from their managers. This gave employees an opportunity to choose dynamic competencies based on their choice and share their skill development needs with managers. The process became extremely simple and quick.
Image 1: The image shows Dynamic competencies added by employees.
Image 2: Dynamic competencies can be added or changed and submitted to manager for approval.
With the help of Dynamic Competency Update Status Report, it became easy for HR and managers to identify employees who haven’t changed dynamic competencies in past few years and identify employees who frequently change competencies.
Image 3: The above image shows three highlighted cases for 3 employees, Ana, Christina and Eduardo respectively. All three cases show unique state of Dynamic Competency Update – as Accepted, Not Initiated and Submitted to Manager. Ana’s dynamic competency has been approved by her manager, thus the state shows Accepted. Christiana hasn’t changed the competency (it’s showing Not Initiated) and Eduardo’s managers hasn’t sent the approval (showing Submitted to Manager).
Empxtrack turned out to be the perfect solution for the client, as Busch wanted to introduce a more formal and streamlined annual goal-setting and performance evaluation process. Easy to set-up, minimal time and effort to administer, and user-friendly interface for employees impressed the client.
Managers could now continually track employee goals and perform employee evaluation based on well-defined parameters. They could create timely performance improvement plan and guide employees on how to enhance knowledge and improve skills and performance.
Image 4: Employees could add or update goals and take approval from their manager. Goal achievements could be captured by employees or managers.
Empxtrack also delivered robust metrics and reporting, which had been virtually non-existent at Busch. Soon the leadership at Busch started using Empxtrack solution to quickly determine top performers within the workforce – something which couldn’t be done earlier without extensive manual work.
Performance management could be carried out in a continuous and timely manner. The entire process was automated, and it was time and cost saving for employees, managers and all other stakeholders involved in the process.
The integration between ADP Workforce Now and Empxtrack went very smoothly. The other note-worthy benefits were:
» Performance appraisal became more transparent, holistic and meaningful for employees. Managers could view progress of employee goals (tasks and measures) at any point of time.
» Employee development needs could be easily identified.
» Employees felt empowered to take their own career decisions.
» Easy data integration with ADP eliminated the data errors.
» Continuous Performance Management process gained more significance, improved employee productivity and encouraged well-planned training and development programs.
» The solution helped in transforming the company’s talent management strategy and culture improvement.
A one-size-fits-all HR software is designed and developed to meet the basic needs of any business. However, organizations require unique solutions to cater to specific problems and needs of their people and business. Thus, there is a growing requirement for cloud based customized HR software that can be personalized and map to the existing processes of an organization. This is the major reason for saying NO to a one-size-fits-all HR software application.
What Does Software Customization Mean?
Software customization is the process of developing a tailor-made application for a business. Customized HR software is developed to cater the unique requirements of an organization’s different departments and its employees, and it maps to their existing business processes.
Benefits of a Customized Cloud-based HR Software
Using a customized HR solution that meets business needs is a worthwhile investment. It is customer focussed with numerous benefits.
Maps to the Existing Processes. Software customization simplifies mapping of existing requirements and processes of the organization. The processes are automated without making changes in the existing workflows.
Result-Oriented and Efficient. Efficiency is the key to success in a competitive world. Customized solutions become a tailor-made platform for managing daily operations and tasks with ease. They are focused on producing the best results with high efficiency and keep the business moving forward.
Prevention Against Data Security Breaches. Protect the software from external threats. It is a well-known fact that majority of hacking attempts become successful as they are performed on known software vulnerabilities, in commonly-used software. Hackers see customized HR software as a less attractive target as it requires comparatively more effort to learn how to breach the system.
Multiple Visibility and Access Controls. Customize access and visibility permissions for different user roles depending upon the specific requirements.
Maximum Configurations. Any good customized solution should provide maximum configurability to add more value to the offering. The users can get configuration options in the product that can be tweaked in just a few clicks, as and when required. Configurations are originally designed by following best HR practices and industry standards, and they meet out-of-the-box requirements of the client.
Custom Forms and Rules. Performance appraisal forms can be customized by the user (HR) to meet specific process requirements.
Tailor-made Reports and Easy Identification of Trends. Generate multiple tailor-made reports for all stakeholders, including the leadership, HR, managers and the employees. Customize your dashboards and enable easy analysis of data and quick decision making. Patterns in workforce productivity, headcount, absenteeism, appraisal status, employees’ leave frequency, goal completion status etc can be further identified.
Personalize the Product. Personalization is the need of the day as it gives a private label to the brand with numerous options to completely customize the look and feel of the software. The product can be branded and personalized as per the preferences. Basic customizations, like change in colour scheme, fonts, layout, logo, menus, reports, features and more, can be done to provide a tailored user experience.
Scalable and Reliable for Long Run. Meet client’s present and future requirements. A custom product can easily grow and adapt with your organizational changes. Its capabilities can scale up easily with the growing needs of an organization. No need to look and migrate to a new software due to changes in processes or increase in employee numbers.
Attract and Retain Top Talent. Give a customized experience to job candidates and employees by customizing your recruiting practices and providing customized offerings. This will not only increase the engagement levels but will aid in attracting and retaining top talent and enhancing the overall productivity of the organization.
User-Focused Development. Custom software development team assists at every step of the process, from the planning stages to implementation. Necessary training is provided for optimum adoption of the product. No need to read instruction booklet to get started with the product. It is also ensured that the entire workforce is fully trained on the new system.
Research indicates a major shift towards highly customizable HR software solutions. Customization offers countless benefits when compared with a licensing off-the-shelf software. Scalability, extended support, guaranteed & timely maintenance, integration in the company’s existing software environment, to name a few.
If your organization needs a customized HR software that can integrate well with your existing processes, then get in touch with Empxtrack team to discuss your requirements. Empxtrack offers maximum configurability and customization, with custom-made workflows, forms, user interface, access controls, leave & attendance rules, and more.