Monday, December 12, 2005

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.