Performance Management
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Performance Management: Current Trends March 01, 2006 Recent research reveals that the majority of organizations are utilizing perform ance management systems / performance management software and many are in the pr ocess of revamping their first generation systems. According to Development Dime nsions International (DDI), performance management systems are active in 91% of 3,600+ organizations studied. This article will review the current trends in per formance management, and how companies worldwide are making changes. Performance Management - A Definition According to SHRM (the Society for Human Resource Management), "performance mana gement is the organized method of monitoring results of work activities, collect ing and evaluating performance to determine achievement of goals, and using perf ormance information to make decisions, allocate resources and communicate whethe r objectives are met." It is likely the majority of employees equate "performance management" to their performance appraisal form and yearly discussion with their manager about "how t hey are doing in their job." But things are changing in this area of HR. Performance Management - Current Trends Strategic HR - The Link Between Employee Performance Management and Organization al Performance Increasingly companies are focusing on "strategic HR," aligning human resources initiatives with the overall goals of the organization to improve business succe ss. Aligning Employee Performance Management (EPM) with Corporate Performance Ma nagement (CPM) has the following effects: 90% of companies surveyed, perceive improved management of their workforce as ke y to gaining competitive advantage. - "Employee Performance Management: The Aligned, Performance Driven Workforce," AberdeenGroup, 2005 Organizations are aligning their employee performance goals with corporate perfo rmance goals through technology solutions. Increased Integration of HR Functions Research shows there is a clear movement to integrate the traditional siloed HR functions into a more holistic, strategic approach to human capital management. Some integration opportunities include: • Aligning employee goals with corporate goals (as described above) • Linking reward and recognition programs to performance • Targeting learning and development toward performance gaps • Identifying skills and competencies of top performers for retention and successi on planning Increased Automation of Performance Management and HR Functions Integrating traditional HR functions, has given rise to an increased need to aut omate them. Connecting the functions at their integration points into clean, clo se-looped systems eliminating duplication of data and streamlining reporting pro cesses is the charge for many organizations. According to CIO Magazine article "Strategic HR Integration" (August 15, 2005) s trategic HR integration offers ROI opportunities in "connecting disparate HR sys
tems into a cohesive whole." When selecting external applications from vendors, companies need to make sure they are "connection-oriented." Online 59% of nology • • • • - "The performance management systems HR executives identify improvement of HCM (Human Capital Management) tech as a key response to their business challenges. Main areas of focus: hiring management solutions pre-employment assessment employee self-service performance management HR Executive's Agenda: The 2005 Benchmark Report:", AberdeenGroup, 2005
However, with all this focus on online systems, More than half (52%) of companies surveyed in 2005, are stuck in paper-based per formance evaluation systems with annual reviews. - "Employee Performance Management: The Aligned, Performance Driven Workforce," AberdeenGroup, 2005 As companies transition to online performance management systems, some key ingre dients are: • Scalability - able to deploy on large scale with solid security • Employee self-service - managers and employees able to access systems anytime, a ny place, on-demand • Integration - ability to connect with other HR systems Increased Communication Regarding Employee Performance With increasing use of performance management technology, managers and employees more easily communicate regarding performance issues. Annual performance review s are being replaced with more frequent schedules (quarterly, monthly, etc.). In addition, performance management technology enables organizations to include fe edback from a variety of audiences. Such 360-degree feedback is internal (superv isors, peers, subordinates) and external (customers, vendors, etc.). Employees Perceptions A recent Watson Wyatt survey of 113 Canadian organizations and 3,000 employees revealed the following of their employees: • Only 29% feel their companies do a good job of identifying and rewarding top per formers • Only 27% feel there is a clear link between performance and pay • Only 24% feel their companies manage poor performers so their work improves A new Hay Insight Research report is a little more favorable, however still show s room for improvement. Below are some highlights from their research database o f approximately 1.2 million employees in over 400 organizations worldwide: Less than 50% of employees believe their organizations adequately address poor p erformance. Clearly it is a challenge for most companies large or small to manage the perfor mance of their employees . . . especially in the eyes of those employees. Howeve r, those organizations making the connection between employee performance and or ganizational performance are taking steps to integrate once disparate hr functio ns with online systems that offer long term ROI towards organizational and indiv idual employee success.
Link : http://www.insala.com/Articles/performance-management-software/performanc e-management-current-trends.asp NEW TRENDS IN HR Human resource management is a process of bringing people and o rganizations together so that the goals of each other are met. The role of HR ma nager is shifting from that of a protector and screener to the role of a planner and change agent. Personnel directors are the new corporate heroes. The name of the game today in business is personnel . Nowadays it is not possible to show a good financial or operating report unless your personnel relations are in order . Over the years, highly skilled and knowledge based jobs are increasing while low skilled jobs are decreasing. This calls for future skill mapping through proper HRM initiatives. Indian organizations are also witnessing a change in systems, management culture s and philosophy due to the global alignment of Indian organizations. There is a need for multi skill development. Role of HRM is becoming all the more importan t. Some of the recent trends that are being observed are as follows: • The recent quality management standards ISO 9001 and ISO 9004 of 2000 focus more on people centric organizations. Organizations now need to prepare themselves i n order to address people centered issues with commitment from the top managemen t, with renewed thrust on HR issues, more particularly on training. • Charles Handy also advocated future organizational models like Shamrock, Federal and Triple I. Such organizational models also refocus on people centric issues and call for redefining the future role of HR professionals. • To leapfrog ahead of competition in this world of uncertainty, organizations hav e introduced six- sigma practices. Six- sigma uses rigorous analytical tools wit h leadership from the top and develops a method for sustainable improvement. The se practices improve organizational values and helps in creating defect free pro duct or services at minimum cost. • Human resource outsourcing is a new accession that makes a traditional HR depart ment redundant in an organization. Exult, the international pioneer in HR BPO al ready roped in Bank of America, international players BP Amoco & over the years plan to spread their business to most of the Fortune 500 companies. • With the increase of global job mobility, recruiting competent people is also in creasingly becoming difficult, especially in India. Therefore by creating an ena bling culture, organizations are also required to work out a retention strategy for the existing skilled manpower.
tems into a cohesive whole." When selecting external applications from vendors, companies need to make sure they are "connection-oriented." Online 59% of nology • • • • - "The performance management systems HR executives identify improvement of HCM (Human Capital Management) tech as a key response to their business challenges. Main areas of focus: hiring management solutions pre-employment assessment employee self-service performance management HR Executive's Agenda: The 2005 Benchmark Report:", AberdeenGroup, 2005
However, with all this focus on online systems, More than half (52%) of companies surveyed in 2005, are stuck in paper-based per formance evaluation systems with annual reviews. - "Employee Performance Management: The Aligned, Performance Driven Workforce," AberdeenGroup, 2005 As companies transition to online performance management systems, some key ingre dients are: • Scalability - able to deploy on large scale with solid security • Employee self-service - managers and employees able to access systems anytime, a ny place, on-demand • Integration - ability to connect with other HR systems Increased Communication Regarding Employee Performance With increasing use of performance management technology, managers and employees more easily communicate regarding performance issues. Annual performance review s are being replaced with more frequent schedules (quarterly, monthly, etc.). In addition, performance management technology enables organizations to include fe edback from a variety of audiences. Such 360-degree feedback is internal (superv isors, peers, subordinates) and external (customers, vendors, etc.). Employees Perceptions A recent Watson Wyatt survey of 113 Canadian organizations and 3,000 employees revealed the following of their employees: • Only 29% feel their companies do a good job of identifying and rewarding top per formers • Only 27% feel there is a clear link between performance and pay • Only 24% feel their companies manage poor performers so their work improves A new Hay Insight Research report is a little more favorable, however still show s room for improvement. Below are some highlights from their research database o f approximately 1.2 million employees in over 400 organizations worldwide: Less than 50% of employees believe their organizations adequately address poor p erformance. Clearly it is a challenge for most companies large or small to manage the perfor mance of their employees . . . especially in the eyes of those employees. Howeve r, those organizations making the connection between employee performance and or ganizational performance are taking steps to integrate once disparate hr functio ns with online systems that offer long term ROI towards organizational and indiv idual employee success.
Link : http://www.insala.com/Articles/performance-management-software/performanc e-management-current-trends.asp NEW TRENDS IN HR Human resource management is a process of bringing people and o rganizations together so that the goals of each other are met. The role of HR ma nager is shifting from that of a protector and screener to the role of a planner and change agent. Personnel directors are the new corporate heroes. The name of the game today in business is personnel . Nowadays it is not possible to show a good financial or operating report unless your personnel relations are in order . Over the years, highly skilled and knowledge based jobs are increasing while low skilled jobs are decreasing. This calls for future skill mapping through proper HRM initiatives. Indian organizations are also witnessing a change in systems, management culture s and philosophy due to the global alignment of Indian organizations. There is a need for multi skill development. Role of HRM is becoming all the more importan t. Some of the recent trends that are being observed are as follows: • The recent quality management standards ISO 9001 and ISO 9004 of 2000 focus more on people centric organizations. Organizations now need to prepare themselves i n order to address people centered issues with commitment from the top managemen t, with renewed thrust on HR issues, more particularly on training. • Charles Handy also advocated future organizational models like Shamrock, Federal and Triple I. Such organizational models also refocus on people centric issues and call for redefining the future role of HR professionals. • To leapfrog ahead of competition in this world of uncertainty, organizations hav e introduced six- sigma practices. Six- sigma uses rigorous analytical tools wit h leadership from the top and develops a method for sustainable improvement. The se practices improve organizational values and helps in creating defect free pro duct or services at minimum cost. • Human resource outsourcing is a new accession that makes a traditional HR depart ment redundant in an organization. Exult, the international pioneer in HR BPO al ready roped in Bank of America, international players BP Amoco & over the years plan to spread their business to most of the Fortune 500 companies. • With the increase of global job mobility, recruiting competent people is also in creasingly becoming difficult, especially in India. Therefore by creating an ena bling culture, organizations are also required to work out a retention strategy for the existing skilled manpower.
