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Double Dubs

My Top 10 Most Viewed Posts in 2005

I lied - one more post.

Ok - so I've only been around since March. Who cares? It staggers me to think about everything we've covered. From employer branding, engagement, onboarding, technology, vendors, strategies, and just good 'ol news. I've enjoyed blogging, getting to know many of you, and learning from you as well. I hope you've enjoyed it too.

My apologies - I lost all comments when I converted to the new domain. As a side note - I'd love it if more of you would comment back on my posts. It's a great way for everyone to pick up different points of view. I know you're out there, but I get way more e-mails than comments. Go figure.

Here are my 10 most popular posts as voted on by you:

1. Talent optimization and engagement
- June 15, 2005


2. Branding, Communications, Service Delivery
- August 25th, 2005


3. Onboarding Part 1: Definition
- July 5th, 2005


4. Workforce Planning again - The Definition
- June 20th, 2005


5. Oracle Fusion, and future PeopleSoft functionality
- August 23rd, 2005


6. Recruiting to Onboarding
- July 1st, 2005


7. eRecruitment Market Trends
- August 4th, 2005


8. Onboarding Part 2: Integration
- July 6th, 2005


9. Employer branding, talent and engagement Part 1
- December 5th, 2005


10. SuccessFactors TMS review
- November 18th, 2005

2006 HR Technology Outlook – last post of 2005

As my last post of the year, I was going to do the standard year end list. But then I thought better and rather than putting in time that very few people are going to read, I thought I’d drag out a rather old article on the HR tech outlook for HR technology. As usual, I’m opinionated, I disagree, and I’m willing to write about it.

But first, another usual item from me – the disclaimer: I’m in agreement with most if this article.

Observation 1:
HR technology applications will continue to expand, with a strong emphasis on recruiting, staffing, scheduling and employee performance management.(from Miller, Mark, September 5, 2005. “Outlook for 2006 Technology,” BCSolutionsmag.com. Retrieved December 8, 2005 from http://www.hr.com. )

Ok – I’ll go with that. Basically this is a continued expansion of the TAS (talent acquisition), TMS (talent management) and TLM (timekeeping) suites. No brainer here.

Observations 2 and 3:
Vendors seek to expand market penetration and their software offerings for HR applications.

Ok – I’ll go with this one too. We’ve already seen it with the large TMS vendors expanding their offerings in 2004 and ’05. No doubts this will continue.

Observations 4 and 5:
HRO becomes mainstream and almost a necessity. Vendor consolidation in the HRO space will taper off in 2006.

I reject the first point. In the last 10 years, there have been fewer than 100 HRO deals going live. It costs too much, is too hard to implement well. I’m going out on a limb and saying that by 2010, we’ll still have fewer than 1000 HRO deals.

I accept the second point. There simply isn’t much to consolidate any more. My post last week on a potential buyer for ACS doesn't count since it's not a merger between BPO organizations.

Newly formed entities such as ExcellerateHRO, ACS/Mellon, will join the global giants IBM, Hewitt/Exult and Fidelity in offering one-stop end to end HRO services using either ERP applications from SAP, PeopleSoft or Oracle, or their own home-grown HRMS. This is supported by onshore or offshore call/support centers and strong case management capabilities.
ADP, Accenture, Convergys, Arinso and Aon will continue to focus on mid- to global-market solutions.

I reject the text above. Accenture is certainly not a mid market HRO vendor even though I’ve been the one saying they are trying to break into the mid market space. All their deals to date have been huge. Convergys is also not a mid market player and I’m not sure they want to be yet. On the other hand, I’m not sure Fidelity is a “global giant” and ExcellerateHRO is unproven.

PEOs will start to gain a foothold in HRO as well. Vendors like Administaff, Gevity, and Checkpoint HR will make some noise in 2006.

I reject the text above. I’ve talked about the differences between HRO and PEO’s before. Let’s not compare the two. It’s like saying the horse-and-buggy are getting into the NASCAR market.

Observations 6 and 7:
HRT spend will increase. Money will be earmarked for purchasing applications providing metrics and other measurements which will help HR executives gain strategic impact.

For those of you who know what I do and who I am, you know I’m kinda counting on this happening. But hey – we say HRT spending will increase ever year, don’t we?

Observation 8:
Off-shoring initiatives in U.S.-based companies will hit a culture barrier. Eastern European countries, though, will gain favor as an offshore site for IT support.

I actually think this is nonsense. The American economy is on the upswing and we are usually more accepting of things like observation 8. I think we’ll see more off shoring in 2006 with steady growth until the next economic downturn. In my opinion, off shoring has been growing for years with little to no resistance.

Observation 9:
Privacy concerns along with other Web communications standards will gain visibility.

No comment – not really my area.

Observation 10:
The “Web Services” era of software applications begins to take shape.
The concept of a pay as go, pay for what you use software application model first adapted by the likes of Salesforce.com will move into HR technology in 2006. With a user interface modeled on Amazon.com and a search engine approaching Google-like capabilities, this approach will incorporate technologies under the heading of “Web Services.” Using Java script, limited tables and having endless adaptability, new software will emerge. Already some niche providers are taking this approach. In Workforce management, year-old Hoursdoc.com uses this technology.

Hmmm… not sure about this one… Funny thing is that I’ve already written my first 4 posts for next year, and it all revolves around web services. His observation is right on until you start reading the detail. I’m not sure he knows what web services is. At the very least, it is not dependent on on-demand software.

Industry pioneer Dave Duffield, the co-founder of PeopleSoft, is now actively using this technology to build a new ERP platform. During 2006 we should see his group’s early efforts attract a very visible beta client. This is guaranteed to raise the excitement level in HR Technology as Mr. Duffield’s first application has historically been in HR.

I can’t fault him for this paragraph. It would have been my assumption too. When I first saw that payroll was on the list, I assumed HR was as well (even though I didn’t see it). I have it from a good source that HR is not in the first release. Oh yeah – We’ve known the company was going to be called workday for months. We've been talking about workday.com here for months.

Hey – any day I only get on someone for 30% of their comments is a good day. We’ll call it a present for the holiday season. Everyone have a great year end, and we’ll see you in 2006.

ACS for sale - $8B

Ok - I'm trying to not post at the end of the year, but this is news worth posting.

A consortium of investment firms is in talks to acquire Affiliated Computer Services, a technology outsourcing company with clients that include General Electric and McDonald's, for about $8 billion, people briefed on the negotiations said.

The group is led by the Texas Pacific Group and includes Bain Capital and the Blackstone Group, these people said. Silver Lake Partners had been part of the group, these people said, but recently dropped out.

Under the terms of the proposed deal, the consortium would pay about $62 a share for Affliated, which before yesterday's run up in its stock price, would have been a premium of about 15 percent. (from New York Times, December 23, 2005. "$8 Billion Deal Said to Be in Works for Tech Company." Retrieved from http://www.nytimes.com)

Improving the Quality of Communications - Part 2

View part 1 here.

Jason wrote this post about The Manager's Role in PerformanceCorsello, Jason, December 19, 2005. "The Manager's Role in Performance." Retrieved from http://jasoncorsello.blogs.com on December 19, 2005. a couple days ago. Seemed to fit into this topic very well and it's his fault this turned into a 2 day post. In it he refers to an HCI/RecruitMax whitepaper that I have excerpted below:

Jason Corsello, Senior Analyst at The Yankee Group, believes that performance management is mainly about aligning business goals with individual objectives. He maintains that, “the one reason performance management has not taken off in a significant way among line managers is the absence in the past of good tools and technology.” Past tools and processes, says Corsello, “have had a negative impact on line mangers in terms of pushing them away from performance management initiatives.” Now companies have a wide variety of tools apart from appraisal tools – such as goal alignment and succession planning – that they can choose from in order to leverage technology in a better way. “If the companies keep in mind the needs of line managers while shopping for solutions and then motivate them to use them, it will not be difficult to get line mangers to fall in line.” Advises Corsello.

The panel agrees that alignment issues are the most important for line managers in performance management. Managers must be able to see their goals and the goals of their team within the bigger picture of the organization and they must understand how they will be measured against achieving those goals.Human Capital Institute, November 11, 2005. "On The Line: The Manager's Role In Performance." Retrieved from http://www.workinfo.com on December 19, 2005.

At the end of my last post, I lamented that systems are not the end solution of our communication problems. Jason's post helped bring me back to the technological optimist that I usually am. In this briefing, Jason does a wonderful job of explaining in a few words what all of these systems do when combined into a cohesive toolset. In this specific example, performance is nothing without good succession planning, competency management, goal routing, and learning management. And of course, let's not forget a good compensation plan that is tightly integrated with performance.

These disparate tools combine into an incredibly effective employee management package when utilized in an integrated and systematic way.

However, I will go back to my last post and note once again that systems are not the end solution. However, these systems bring to bear the full understanding of a particular employee's situation and how we as HR or managers can guide the employee into increased engagement, effectiveness and productivity. I'm not going to let go of the fact that the systems can't make your managers communicate effectively. However, the smart manager is inundated with direction that she didn't have just a few years ago.

As a final note, I found this blog on employee engagement. The latest post is on communications and market value and the top value additive from a 4 year Watson Wyatt study is dirving manager's behavior. Sorry, I don't have the WWW reference.Hannegan, Christopher, December 20, 2005. "Proving link between employee communications and market value." Retrieved from http://www.edelman.com on December 20, 2005.

Improving the Quality of Communications - Part 1

Employee Engagement at 14% Worldwide

Actually, I'll place a healthy bet that all bloggers and almost all blog readers are highly engaged. Let's face it, for you to search out pages like this one instead of SHRM.com takes some effort. But on to the point:

Towers Perrin recently completed what is arguably the broadest survey on employee engagement. Towers Perrin, November 15, 2005. “ Largest Single Study of the Workforce Worldwide Shows That Employee Engagement Levels Pose a Threat to Corporate Performance Globally.“ Retrieved December 11, 2005 from http://www.towersperrin.com. Results were released last month with the following highlights:

• 84% of highly engaged employees believe they can positively impact the quality of their company’s products, compared with 31% of the disengaged.



• 72% of the highly engaged believe they can positively affect customer service, versus 27% of the disengaged.



• 68% of the highly engaged believe they can positively impact costs in their job or unit, versus 19% of the disengaged.ibid

Anita Bruzzese and Julie Gebauer from Towers Perrin have yet another definition for engagement:

Are you willing to go the extra mile for your employer? Are you so highly committed to seeing that your company does well that you'll put in whatever extra effort is required? ... ''Fully engaged employees have the desire and the capability and are willing to put in discretionary effort for their employer,'' says Julie Gebauer with Towers Perrin, a human resources company that conducted the study. ''In other words, they're willing to go above and beyond the call of duty.''Anita Bruzzese, December 17, 2005. "Businesses must engage workers to meet goals," The Salt Lake Tribune.

I have also seen a quote from David Ulrich where he uses the same language about "discretionary" work to define engagement. Can't find a reference though.

''Clearly, employees want and need more from senior management,'' says Gebauer, managing director and leader of Tower Perrin's Workforce Effectiveness practice. ''Managers have got to be more visible, more accessible and more open to employees. Leaders have got to understand what makes employees click.''ibid

I'm not going to comment on some of the distinct country statistics as I don't know anything about cultural effects on surveys like this. For example, some Asian populations measured very low on the engagement scale. Are they actually engaged and don't answer the questions the same way, or do they all hate their jobs, but stay because you used to get lifetime job security in places like Japan? I have no idea.

Clearly how one engages an employee will differ with each culture and country. The important point is that engagement is indeed critical to the bottom line and organizational success. What is important to me is that I talk a lot about technology and how these implementations increase your ability to improve the relationship with your customers (employees). However, if your managers are utilizing the automation and spending less face time with employees, this is a serious mistake.

Employees do want to contribute more, but believe they are hampered by senior managers. Only 41 percent believe bosses support new ideas and new ways of doing things, while only 36 percent believe top brass effectively communicates the reasons for important business decisions. Only one-third of workers believe senior managers communicate openly and honestly. ibid

So employee portals and self service are great because nether we nor our employees want to spend time on a manual address change process. However, we need not to think about minimizing the interaction - but to increase the quality of that interaction.

Part to of this series tomorrow.

Related Posts:

• GG and DD define “engagement”



• Employer branding, talent and engagement Part 1, Part 2, Part 3



• Talent optimization and engagement



• Commitment vs. Engagement

Mergers and 20 dumb things...

Listen, I can go off topic sometimes, right?

Gautam's post on Tom Peter's 20 dumbest business practices reminded me of something else I read recently:

TP: Mergers of Decrepit Monsters!

GG: Merging for the heck of it!

SA: More Often Than Not, Massive Galaxies Form by Mergers

New data seem to show that galaxies collide all the time. In fact, the oldest and largest galaxies in the universe most likely formed from such intergalactic combinations.

"Our study found these common massive galaxies do form by mergers," Van Dokkum explains. "It is just that the mergers happen quickly and the features that reveal the mergers are very faint and therefore difficult to detect."

"Quickly" on a galactic scale means just a few hundred million years--a small fraction of the 13.7 billion years the universe has been in existence--and, because such collisions rarely involve head-to-head star crashes, they leave few traces behind except in the shape of the resulting galaxy and a general slowing in its formation of new stars.Biello, David, December 6, 2005. " More Often Than Not, Massive Galaxies Form by Mergers," Scientific American. Retrieved from www.sciam.com on December 19, 2005.

Some strange parallel universe stuff going on here (no pun intended).

Yeah - this is what I read when not reading HR stuff. Sad, huh? So GG and Tom Peters make me think of massive galaxies? hmm....

ADP's On-Demand HRMS Direction

I saw this press release and got to thinking about ADP's direction with HRMS. Why do I keep talking about ADP and why are they important? Being the 10,000 lb. gorilla in the payroll market, they are actually also one of the huge players in the core HRMS market as well. They have more HRMS installations in the mid-large employer market than anyone other than PeopleSoft/Oracle. PeopleSoft was the most installed HRMS and ADP Enterprise came in at #2 (please note I am not including PCPW and PayForce - it's pure ADP Enterprise).

As ADP attempts to turn into more of a on-demand company (like workday, salesforce and successfactors), they are held back by technology and legacy customers.

Technology is a huge hurdle at ADP - not that they don't have it, they do and are good at it. If you don't believe me, then you should because there's a great chance they process your stock transactions. Their HR services have grown so fast in the last 6-7 years that the technology infrastructure is almost impossible to keep up with. Acquisitions in all 3 major areas (HR, PR, Benefits) have added systems, service centers, etc. This has also mean different code bases that needed integration and bringing them up to single standards.

As of this year, ADP is close. They have fantastic web services technology that lets you subscribe to a portal with on-demand basic employee self service, check-view, MSS performance reviews, MSS compensation reviews, time and attendance, benefit enrollments. All of this is fully integrated into a single portal experience so the employee or manager only logs in once (we're going to talk a lot more about web services in January). So anyway, they are gaining lots of ground on the technology side. The only problem, which may not really be a problem, is that to get their hosted-only portal, you have to host every service you subscribe to - HRMS, Time, Benefits...

Then there's the second problem. "Legacy" customers. The ones on premise (non-hosted) HRMS. As of the current version, ADP doesn't even offer self service tools anymore - they assume you will host and use their portal. We now go back to the "2nd largest provider of HRMS" story. They have at least 5-700 non-hosted clients IMO. In several years, they will have to convert to ADP hosting, or they will be out looking for a new HRMS that has native ESS/MSS. Or option number 3 - go buy something off the shelf. Until this press release I didn't know anything was out there for non-hosted ADP clients. From what I hear, it's a pretty nifty little product. Considering that ADP Enterprise has over 1000 installs currently in live production, it's nice this large user base has another option.

TAS Vendor Scorecard

Well, I've done talent management scorecards a few times, but never talent acquisition. This is not really a scorecard or vendor functionality comparison. Here are my top 4 vendors and a few notes about them. This is not a review of functionality, just a purely subjective view on who I like and why.

Taleo and Virtual Edge were really a tie with Taleo coming in stronger on the app side, but I'm more excited about watching Virtual Edge right now. Taleo has a slight margin on the functionality side with absurd amounts of flexibility for the end users (managers and recruiters). Virtual Edge is much better in technology architecture. Basically this means easier deployment of web services and accessible API's (if that means anything to you). We'll see if Taleo can pull through some promised technology in their next release. If they don't VE will easily dominate the market - not having web services in 2005 is sinful. Not having it in 2006 is unforgivable.

1) Taleo: Slowed down their R&D processes while preparing for IPO. Still the leader with Virtual Edge creeping up.

1) Virtual Edge: Good technology creeping up on Taleo. This is probably the company to watch and is really the biggest competition for Taleo in the near future.

3) RecruitMax: Poor infrastructure. Installations for each client are separate instances. This is very difficult to manage and support for upgrades and service. Next release of software is supposed to support multi-tenet architecture

4) Brassring: Starting to become a serious mid market play. They are not driving in toward the large employer space. Could not capitalize on early market excitement.

TMS (non) fiancials

I seem to have made the quite unwise statement that I would attempt to evaluate the financials of several TMS vendors. Realizing now that I should take that statement back (entirely possible with just a quick stroke of the keyboard) and deny the whole thing, I submit the following with a few disclaimers (on top of my normal disclaimers):
1. Any and all analysis performed for this post is almost pure conjecture.
2. While I reviewed a few sources of financial data, and have made some pretty reasonable calculations and guesses, many of these calculations were based on educated guesses.
3. I actually have crunched numbers and came up with a few comparisons of profitability, revenues, total clients, total employees. I will not post these numbers since I could be so far off it would be misleading.
4. I have decided to look only at Authoria, RecruitMax, and SuccessFactors. These are private companies and difficult to get data for. For WorkStream, please visit their website here to download the annual report. It’s simply not fair to evaluate WS against “educated guesses.”
5. I have not been involved in a TMS search in the last couple quarters, and don’t have any direct information other than what is on the public internet.

Key Points:
– SuccesFactors seems to be adding clients faster than anyone else.
– Authoria seems to have the strongest base in the Fortune 1000. SuccessFactors is a very close second.
– RecruitMax may not be profitable (I don't know for sure), but is also adding clients as a fast pace. Their average clients size seems to be smaller than Authoria or SuccessFactors.
– Authoria and RecruitMax have more users that SuccessFactors, but it is impossible to tell what product those users are on. For example, my numbers for Authoria may include non-TMS products. However, I have reasonable confidence that Authoria has the most TMS employee subscriptions. RecruitMax has a pure TAS base.
– As SuccessFactor’s client base is 100% subscription based on employee headcount, each employee added is much more significant to the bottom line than for Authoria or RecruitMax.

Profitability:
– Success Factors has been profitable since inception in 2001. I’m not sure if they have ever taken a loss if you exclude cash infusions of about $5M/year. However, this is chump change and I’d guess that they have been turning real profits. I really can’t figure out how they have been cash flow positive since inception.
– Authoria turned a profit in FY’04. They state that they are on course to turn a profit in FY’05 as well. Obviously I don’t know how the acquisition of hire.com will affect the books (or when). Strong revenues from pre-TMS products should help them.
– Regarding RecruitMax, my best guess is that they are not profitable. R&D and acquisitions may affect profitability for a few years, but that's true for anyone in this space.
– In my only comment on WorkStream, they are clearly not profitable. You can look at their financials yourself.

Technology, Automation, and Talent Case Studies

I found this article in CFO Magazine’s online Fall 2005 issue. The full text is quite long and located here. It is a well written piece by Scott Leibs from September 15, 2005. Anything in block quotes below is a direct excerpt. There are so many good examples of everything we’ve been discussion over the last few weeks I had to take a few “case studies” and post them. Also, here are some previous posts that relate:

The truth about what “integration” means
Employer branding, talent and engagement Part 1
Employer branding, talent and engagement Part 2
Employer branding, talent and engagement Part 3
Technology's role in performance management

Often described as "the right person in the right place at the right time at the right price," workforce optimization combines managerial discipline with newer forms of information technology to produce, in theory, everything from perfectly staffed assembly lines to efficiently deployed consultants to well-crafted succession plans. At its most basic, it builds on earlier time-keeping and attendance systems in order to improve staff deployment. At its most sophisticated, it is essentially synonymous with human-capital management (HCM), a "full life cycle" approach to employees that encompasses everything from recruitment and hiring through training, career development, and compensation. While the ultimate goal — greater productivity and efficiency — is certainly in a company's best interest, many facets of workforce optimization are explicitly designed to improve the career prospects and job satisfaction of employees.

Case Study 1: The tie between Talent Management, Automation and Employee Engagement

That's where technology comes in. As Kimberly-Clark's global team developed the new process, it also shopped for software that could support it. A suite of HCM applications from SuccessFactors Inc. now helps speed the review process, in part by supplying a "robot" that provides thousands of sample phrases and assessments to help managers write reviews. Buthman says a review that once took him six or seven hours to prepare can now be done in a third of that time.

"Every employee needs a clear line of sight between what they do each day and how it relates to our global business plan," Buthman says. "That's how they understand the contribution they make. That's part of what makes them feel engaged by their jobs." And engagement, Buthman and others say, is critical to productivity, even if it can be hard to quantify. "

The connection between employee engagement and productivity may be opaque, but the link between performance and pay is much clearer — or could be. One problem with performance reviews, many experts say, is that managers often lack visibility into an employee's achievements throughout the year and instead tend to make decisions based largely on what the employee has (or hasn't) done lately. Many HCM software companies cite this as a reason to buy a full suite of products that can address everything from hiring and performance management to compensation and career planning. As Buthman says, "The ability to differentiate among performers and match those differences to pay really completes the loop."

Case Study 2: Business Intelligence

Randy MacDonald, IBM's senior vice president for human resources, says that as companies apply new kinds of technology to HR issues, they must also apply new measurements. "The CFO gets to see the CEO faster than anyone else," he says, "because he or she can show a series of metrics. HR is now doing the same." Some of those metrics are old hat, such as time to hire, attrition rates, and revenue per employee. But increasingly, HR departments are looking at other facets of the labor market. IBM, for example, looks at everything from the percentage of summer interns who sign on for full-time work to a rolling three-year forecast of anticipated labor needs. HCM software companies have added various metrics capabilities to their products, or partnered with business-intelligence firms that offer a range of "workforce analytics" applications.

Case Study 3: Competency Management Systems

The "all employees are not created equal" message is sometimes anathema to HR executives, but it reflects a new pragmatism taking hold at many companies. Advance Auto Parts, a retailer with more than 2,500 stores in North America, began to "recalibrate" its workforce three year ago in response to poor performance.

It developed a talent-management process that it implemented manually at first, then automated last year (with software from Authoria that integrates with an underlying system from Oracle/PeopleSoft). "The system gives us data we can analyze to see where competencies are strong or weak," says Bryant.

Case Study 4: Talent Acquisition Automation

Susan Burns, operational vice president for employment initiatives and college relations, says that while the front end of Retailology is essentially informational, the back end is a heavily automated candidate-tracking system that replaces a once intensely manual task, freeing HR staff to address "talent-opportunity areas." For example, if a promising candidate applies when there is no suitable opening, a Federated recruiter will maintain a dialogue with that person and alert the individual when an opening occurs. "Handling that kind of follow-up was virtually impossible when everything was paper- and phone-based," she says. Today, more than one quarter of the 100,000+ employees hired by Federated apply via the Web, and that percentage is growing. "No doubt it's a very cost-effective way to extend your reach," Burns says. "We expect the talent market to get even tighter, and we'll need more tools like this in order to keep the pipeline flowing."

CFO Magazine Survey on Employee Performance

As a follow-up to yesterday's post, I found this article at CFO.com on employee productivity.

First of all, many of the 170 CFO's surveyed came from "small companies." Second of all, it's obvious that what CFO's/finance see as important HCM issues are very different than what HR practitioners see.

Question #3: Compensation is the biggest driver for employee effectiveness? I've written about this before. Comp drives employee recruitment, but it's engagement, opportunities and satisfaction that drive retention. I think what drives employee effectiveness are opportunities to grow. I will cave in however and say that a good incentive comp plan will also inspire certain types of workers to increase effectiveness.

Questions #4 & #5: It's interesting that employee learning is the best way to increase employee value, but training and skills/competencies are low on the issues list. CFO's in this survey are obviously looking at (in Q5) cost factors and not ways to drive employee value. I'm not entirely sure I want to make this next sweeping statement, but if you look at real cost vs value metrics, I bet the value in enhancing employee productivity incrementally are much greater than time spent shoring up benefit costs. Don't take that to mean they shouldn't work on benefit costs. I just think the CFO's are wrongly focused.

The below image comes from CFO.com. Please click here to read more about their survey.

Technology's role in performance management

Workforce Performance Solutions Magazine had this article about technology's role in performance management. I thought it a bit obtuse, but I'll expand on my ideas below. I thought we were going to read about EPS systems and deployment. Instead the article was about LMS and how to deploy learning. I didn't really get the tie in until the bottom of the article. The below 3 bullets are an excerpt from the link above.

Competencies to Communicate Job Expectations to Employees: Just about everyone wants to perform well—it’s human nature. And for those employees who do want to perform well, there’s nothing more frustrating than confusion or uncertainty about what is expected of them. Building and maintaining a competency profile for every job role is an excellent way to clearly communicate expectations to employees. This is not only good for incoming employees who are new to a position, but also for experienced employees.

Competencies to Provide a Clear Path to Promotion: A competencies database and a way to search competencies by job position is an excellent vehicle for employees to understand what skills and competencies they must possess in order to be a candidate for promotion. BC Hydro is working to enable and encourage employees to browse different job positions and see the competencies required of each. By comparing their current competency ratings to those of the job they aspire to, employees—with the help of their supervisors—can begin to map out a development plan toward promotion. This not only empowers employees to take more control over their careers, but it also allows the company to have a proactive succession planning tool.

Competencies as a Benchmark to Track Employee Progress: There is probably no simpler or more effective way to track an employee’s performance against development goals than using competencies. Reviewing an employee’s learning and development history is a good starting point, but that approach only tells you what activities the employee has completed. It does not identify and quantify the impact the development activities have had on the employee’s capabilities. Comparing competency ratings for an employee over time is a more comprehensive and quantitative method for tracking an employee’s development progress.

I think most of you will agree that this is certainly not an inclusive list on technology's role in performance management. In fact, this is a bit of an indirect discussion of it. Today's EPS systems do everything from the basic data management of an employee's goals and performance history, to linking or storing compensation, job, learning, etc... However, technology really comes in to play when we talk about self service and how we role this functionality to the end users. In today's world, employees and managers should all be logging into a system to complete reviews. This is not to say that the face to face interaction has been replaced, but that the data management activities have been moved from paper to PC.

Along with this, EPS systems are going to contain any and all routing options an organization needs to manage approval levels or automate 360 degree reviews. The clincher however, is something I mentioned above. EPS systems can collect data from other systems. If you have competencies located on an LMS, the EPS can grab the data (or at least import depending on the skill of your implementor and IT department) and display it in the UI. Rather than your managers looking in 5 different sources for the data required to evaluate an employee, all the relevant data can be represented in a single place. This is crucial since we all know very few managers that will actually attempt to get ALL the data if it's not easily accessible. Next, the EPS should tie directly to the compensation system to continue the data cycle.

The below is part of an e-mail summary of the Wyatt report I received. The line where 52% of employees state their managers tie pay to performance is indicative of my statement above. The lack of data integration is what drives a real ability to tie competencies to performance, and performance to compensation.

WASHINGTON, November 28, 2005 – When it comes to practices that improve employee performance, companies and workers themselves agree there is room for improvement. This finding is based on a survey of 265 large U.S. companies across all industries and a complementary survey of 1,100 workers conducted by Watson Wyatt and WorldatWork.

In designing their performance management programs, most employers have adopted best practices — including providing a formal yearly review (98 percent), helping poor performers improve (96 percent) and offering coaching and feedback (91 percent) — but they have been less successful in implementing them. For example, while 92 percent of programs are designed to link pay to performance, only 79 percent of employers say that managers at their organization are moderately or greatly effective at it. Employees see even more room for improvement with only 52 percent indicating that their managers tie pay to performance.

Managers also struggle with providing formal career development and planning. While the vast majority (82 percent) of performance management programs are designed to include career development, only 37 percent of employers say that managers at their organizations are at least moderately effective at providing it. And only 31 percent of employees say their companies offer career development.

Tax Credit Screening (and a few $100K)

A few days ago, I got an e-mail from someone requesting my thoughts on Projectix. The e-mail said, "I would say it [is a] TMS program. Wouldn't you?" A few e-mail exchanges later, I basically said that it was not a TMS system, it was an TAS system. This was actually being nice because when I worked with the produce a couple of years ago, it wasn't even a decent TAS. However, I'm very glad I held off because after having done some research, they have definitely stepped up and have much more functionailty added recently. I'm sticking with my guns though... TAS does not equal TMS.

(U.S. centric post follows...)

What does all this have to do with Tax Screening you ask? Well, nothing really. It's just that in my research om Projectix, I noticed a page on their website about tax credits.

What do tax credits have to do with TAS, HR or technology? In my opinion, tax credits have to be the least thought about process for HR professionals, and if your recruiting system/staff is not looking at this, then you're losing huge money. There is already enough complaining about HR being a cost center.

There are 2 general types of credits: welfare to work (WTW) and work opportunity tax credits (WOTC). Please don't kill me if I'm a little bit off here, but I'm not a tax accountant. WTW credits are what they sound like. Tax credits are offered any time you hire someone of a particular category. This could be a welfare recipient, a person of a certain age (usually young), etc. WOTC credits line up with what are called "empowerment zones." If you have a location in an empowerment zone (federal or state) each hire you make could qualify you for a credit.

When we talk about credits, we are talking about an average of $3000 per hire. Some of these credits are one time. Others are annually renewable forthe employee. So lets say you have 10K employees and 10$ turnover. For the 1000 employees you hire in a calendar year, you could qualify for $3M in credits. Credits are also not tax deductions. That $3K is not a tax deduction, it is a credit to the bottom line.

So HR technology? Well yeah. A couple years ago, we would have had our tax departments runing around trying to get all this paperwork in to the government agencies. (in most cases you have 28 days from the date of hire to get the credit) The fact that there are now vendors offering to automate this stuff is great. I don't know if RPO vendors are looking into this or perhaps already doing it, but it's a great opportunity for outsourcing.

Here are a couple vendors I know of: Projectix, ADP

GG and DD define "engagement"

Gautam and I take a stab at clarifying our definitions of "engagement" here.

Mine is in the comments...

Authoria tops the TMS vendors?

In a rare show of self control, a vendor has incredible press that it doesn't show off on it's website.

CHICAGO, HR Technology Conference and Exhibition, Oct. 20 /PRNewswire/ --
Authoria, Inc., the leader in integrated strategic Human Capital Management (HCM) solutions, won the industry's first Integrated Performance & Compensation Management Shootout today at the 8th Annual HR Technology Conference and Exposition in Chicago.
The 350 human resources professionals in attendance at the Shootout chose Authoria as the winner after witnessing live demonstrations from all four competitors. The demonstrations followed a scripted scenario written by Bill Kutik, conference co-chair, and Mark Albrecht, vice president of consulting at Salary.com. The three other competitors were Recruitmax, SuccessFactors and Workstream.
"Studies continue to show that Performance Management is priority No. 1 for HR executives and the C-suite," Kutik said. "Last year, we staged the industry's first Performance Management Shootout. This year, we went the next step toward getting full business benefits by integrating performance management with compensation management to compare industry leaders in an apples-to-apples contest, back-to-back for the first time."

It's pretty obvious that I consider Authoria, SuccessFactors, WorkStream, and Recruitmax to be the leaders in the field. My original reviews here and here. All of the vendors are undergoing an incredible amount of R&D at the moment as the industry demands more robust and comprehensive TMS solutions. The trick is that as these companies acquire functionality (much more acquiring than developing going on here), that they integrate well in the back end. Equally as important is that they create UI's that look seamless to the end users if the applications really are pieced together.

Interestingly, last year's "shootout" was performance only. A comment I got via e-mail from a reader (Andrew) suggested that all of these companies could probably survive on performance management alone for a few years. Indeed that's where the core demand is, but once performance is up, compensation is very soon to follow. Additionally, workforce planning is about to hit the market big time as the consulting world looks out 5-10 years, and the vendors are picking up on this. So while workforce planning and succession are not huge functional drivers today, I think (hope) that if a few years it will be as big as performance.

A couple of posts ago, I pointed out a talent management article on Deloitte's page. Notice that their discussion about talent management is about what I call workforce management, not performance or comp.

Back to Authoria and why they won the shoot-out. Well, I should first say that I was not there, do not know what the scripted scenario was, nor have I even seen the most current version of all 4 software packages. However, I'm betting that Authoria's background in knowledgebase and integrating data from multiple points into a single UI gives them an edge. I'm betting that Authoria won because their data transactions may have looked smoother and more seamless. I think RecruitMax's foray from TAS to TMS is still too new, but give them another 12 months to patch things together and they'll be a threat. (and actually, RecruitMax won the performance shoot-out in 2004 - however they acquired compensation earlier this year)

So what happened to WorkStream and SuccessFactors? Clearly we can't say that they didn't have the functionality, integration, or UI. In all honesty I bet the shoot-out was a pretty close decision that once again may have come down to UI and useability. The singe scenario demonstration certainly would not be enough to judge a ranking based on functionality.

I'm going to agree and give Authoria a thumbs up for UI and integration. The lead on functionality is highly subjective based on who the client/prospect is and functionality changes at lightspeed anyway. I'm going to do some research on the financials of these 4 vendors (and maybe a couple others too). I'll post that in a few days.

Employer branding, talent and engagement Part 3

So what does all of this have to do with HR Technology and service delivery?

Employee Self Service/Portal

Manager Self Service/Portal

HR Service Center

Print Communications

I am a firm believer that while your verbal communications are your most powerful communications, your internet based tools and your call center are your most frequent methods of communication.

Employees will hit your self service portal for anything from viewing paychecks, enrolling in benefits, looking for policies, and just generally getting information. If your portal isn't up to par, the employer brand communicated is one of deficiency or even dysfunction. If integration is lacking and employees are logging in multiple times to multiple systems, you are sending a message about beauracracy and administration. The portal should be a smooth experience that they don't have to think about. OK - forget about the technology and user experience for a moment. The portal is also where you can consistently communicate a message. So if part of your employer brand is about community involvement, perhaps you have messaging about your matching gifts program featured prominently in the home page.

Managers are focused on certain things when they verbally communicate the employer brand. Things like the above "community involvement" often are missed by managers because they don't directly impact the operational business. This is ok - so long as you are effective in using the other communications tools. What managers are more concerned with are the obvious - performance feedback, compensation, employee relations... They are also concerned about hiring and training. Ease of use still apply here. However, the managers will also be exposed to tools and systematic processes that help them along the way. Effective communication requires dynamic tools to explain not only the manager's process, but how to communicate results to employees as well. So managers have access to the TAS, PMS, CMS, and LMS as great tools, but the use of the tools, explanation of policies, and communication to employees are all factors that must be thought about before the tool "goes live."

HR Service Centers and call centers are really another topic series. (forgive me...)

Employer branding, talent and engagement Part 2

Note: This blog has moved to systematicHR.com. Please update your links. Posts will be maintained on both sites through the end of 2005.


So last time we talked about communicating brand and an overview of a chain of effect beginning with the manager communication and ending with the shareholder returns via the Microsoft model.

Andrew posted a link to David Kippen. I found this post about branding, talent acquisition and retention equally interesting. The following text is from David's blog:

Let’s assume key employees are leaving, that we’ve developed consensus that there’s a problem, done our due diligence by conducting exit interviews and qualitative and quantitative research among current employees. If our research indicates employees are being lured away by more generous time policies, better retirement plans—or even better pay, if there’s money and will to address it—HR may be able to do something about it. Now, I don’t want to suggest that HR has no operational impact: if research shows managers lack management skills, for example, HR can create training programs to address issues like this, too. But if the root problem is a misalignment between what the organization says about itself and what’s true about it, HR will need help to effectively address the operational issues that define “your work.”

This is where the need for a resonant, robust internal brand comes into play. Because it messages to what we do and why we do it, the internal brand serves to unify “my work” and “my organization.” Think of the internal brand as a clear light on a dark night: by aligning what we tell the marketplace with what we ourselves believe, a strongly-articulated internal brand helps managers and employees voluntarily align their work with their organization’s mission and values. And that voluntary alignment is a much stronger key to retention success than anything leadership can put in place if the recruitment promise doesn’t receive a payoff in the real day-to-day work experience.

David's idea of "voluntary alignment" is what I would call engagement. Employees who are engaged feel a stronger tie to their work and their employer. Repeating myself from a previous post, we find that cash outlays for direct employee benefit are very important for recruiting, but not as important for retention. They key factor here, is if you can move employees into the satsified and engaged range, you are not as at risk for employee attrition because employees now want to work for the company for reasons other than compensation.

Employee Acquisition: Cash Compensation, Benefits

Employee Retention: Total Compensation, Work-life balance

Employee Satisfaction: Work culture, stress, ability to impact work

Employee Engagement: Culture, job design, ability to impact customer, management.

So when David talks about why employees are leaving (better pay, time off, benefits...) the effective communication of the positive employer brand to engage employees would have minimized the entire issue of high attrition.

At the same time, Wyatt's Communication ROI study is suggesting a direct tie between communications to employees and ROI.

The study also found that a significant improvement in communication effectiveness is associated with a nearly 20 percent increase in a company’s market value. Specifically, the study identified nine communication practices that are directly linked to an increase in market value. The three practices associated with the largest increase in shareholder value are driving managers’ behavior to communicate effectively, connecting employees to the company’s business strategy, and following a formal communication process.

I'm taking the "connecting employees to the company’s business strategy" as more branding. In addition to the impact to the shareholder value, "Companies with high levels of communication effectiveness were 20 percent more likely to report lower turnover rates than their competitors."

Employer branding, talent and engagement Part 1

I really need to thank Regina for linking to employerbrand.com. I'm finding it to be quite fascinating. There's really a huge amount of content here about employer branding and employee engagement. I think everyone should read/view the MicroSoft case study they have, not because it's the best one, but for me it's the easiest to follow (I'm a visual learner). The case of how great managers can affect the bottom line with this one (of I'm sure hundreds) strategy to engage their employees and create better results is pursuasive. What I find most interesting, is that managers are at the beginning of the chain. When you communicate your employer brand (as opposed to your customer facing "product brand"), there are probably just a few means of communicating this.

Print communications

Verbal/Management communications

Depending on the culture of your organization, and this would even vary by employee, I would guess that the web tools or the manager are the most effective means of communicating employer brand. Some people (like me) talk to their direct manager once every other month. However, we should make sure that we include direct training as part of the brand communication exercise contained within managing the employee. Every person to person interaction within your organization becomes part of the brand communication, and management should be particularly aware of the positive or negative niuances. As we think about person to person communications, we must also weigh in the effects of team building and camaraderie. Employees who experience higher levels of camaraderie in the workplace will have a more positive view of the employer brand. Managers must foster camaraderie and can do so by effectively utilizing teams and team building activities.

I'll talk more about "print communications" next post.

Google, Brand, Talent, Engagement

It was all wrapped into a single post from one of Michael’s link posts. In this google blogger page where Trisha Weir talks about how she got to be hired (partly by selling WHY she owned a Google t-shirt) I have to give some kudos to the recruiter and hiring manager for recognizing a couple things:

• Brand - Trisha clearly already recognized the google brand
• Engagement - she has a high probablitlity of becoming an engaged employee. Being predisposed to liking google policies for employees based on what she sees in the market, she is already proud of her employer. Engagement isn’t that big a leap.
• Talent Acquisition - when you’re ready to make a hire, how quickly can you make decision and onboard the person? In Trisha’s scenario, she went through phone screen to verbal offer in 3 work days. Great candidates don’t come across your desk often enough to be bogged down in decision beauracracy.
• This also hits on a few other things we’ve talked about in my blog… how do you create work life balance, for one. I’ll admit that I check work e-mails every night, a few times on weekends, and when I’m on vacation.

KM and Learning organizations

Gautam turned me onto this blog. So... What IS up with HR and Knowledge Management?

I don't hesitate to wonder about HR's motivation when it comes to KM. Truly, when we talk about "strategic HR" and the fact that as we head into 20xx we face huge workforce knowledge issues as a generation retires. We also deal with this as training organizations. Everyone in HR is in a state of frenzy over the loss the senior managers and what we should do, from succession planning, to recruiting, and talent management. How is it that HR practitioners are so complacent about working with and networking with KM professionals? Do I give us all the benefit of the doubt and assume that there are not enough KM people in our organizations?

More on Portals

Blogger over at Systematic Viewpoints has been writing about PeopleSoft portals and his implementation experiences lately. Of particular interest is his/er organization's struggle with the HR portal versus the enterprise portal. If you're on common platforms (PS, SAP, PT) then integration isn't so bad. Even if they are not on the same platform, I'm not sure the enterprise portal really needs to interact with the HR portal. The content is sufficiently different and any data exchanges should be achievable through the data warehouse.

Well, I'll looking forward to seeing how his/er tools and portal implementations go. I'm especially interested to see what Oracle offers his/er organization in the upcoming months.