David's Employee Performance and Talent Management Blog

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November 2007

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November 30, 2007 6:15 AM

Compensation Technology Goes Mainstream

Linking Appraisals and Compensation

Check out this feature in November's Talent Management, titled "Compensation Technology: Drive Higher Performance, Gain Competitive Advantage".

It explains how compensation management technology has become increasingly mainstream over the past few years, and how it is transitioning from Excel-based programs to best-of-breed applications from vendors dedicated to employee performance and talent management solutions.

The article states that Yankee Group research analysts forecast a 19.6 percent growth in the compensation management market over the next several years, as more organizations seek to develop a pay-for-performance culture and recognize compensation as the cornerstone of effective talent management. We have also found this to be occurring, with many of our customers tying their employee performance appraisal cycles directly to base compensation and spot bonus levels.  Increasingly, organizations are realizing how tightly compensation and appraisals must be linked as part of a successful talent-management process.

When looking at talent management vendors, it's essential to consider those whose technology will easily integrate into your existing payroll software. When integrating a new solution, you don't want to have to unnecessarily change established processes and procedures within your HR and accounting departments. 

Look for a software solution that is flexible enough to integrate with whatever platform you've got, as well as duplicate the look and feel of current (maybe paper-based) performance review and compensation forms. Otherwise the learning curve and implementation costs of using an automated system may get out of hand.

Reporting is a key feature too. According to the article, compensation technology provides organizations with a standardized vehicle to not only capture and document compensation decisions, but to also document and communicate that they are made fairly, accurately and within corporate guidelines. But a step further is the ability to systematically review compensative levels and measure those against budgets and financial forecasts. This is a powerful tool for the company's bottom line, as you can identify specific managers who may routinely over-spend on compensation, or those who are not spending enough and experiencing higher-than-average turnover among their top performers.

Finally, the article points out that compensation technology should be able to accommodate exceptions. Employees who make significant contributions to company success should be recognized for their efforts. In addition to variable pay components, think about alternative rewards such as "spot award programs" to motivate high performers when corporate guidelines do not allow for a merit increase.

Long story short: appraisal technology and compensation technology should be closely linked in any organization. If selected and implemented properly, they should be able to serve as a planning tool and competitive advantage in your market.

Are you using compensation technology? Tell us about your experiences...

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November 27, 2007 5:15 AM

Building Leaders Today

Succession Planning and Management Training Programs

Take a look at this recent article from the Globe and Mail's Report on Business.

The article highlights the phenomenon of management promotees failing in their new roles, and how some companies are seeing improved results by providing management training far in advance of any promotions.

This again brings up the importance of succession planning to sustain the strength and competitive advantage of organizations. Succession planning has recently become one of the biggest HR concerns, largely because of a looming power vacuum expected as the baby boomers retire, and the new challenges of engaging and retaining knowledge-based millennial workers.

As the article illustrates, succession planning is most effective when it is driven by an individual development plan (IDP). William J. Rothwell, Ph.D., SPHR, describes the process: "Once it is clear what present and future gaps exist for individuals as a result of performance assessment and potential assessment, some means should be established to help them prepare for the future by narrowing those gaps. To that end, individual workers - and their immediate supervisors - devise a plan to help individuals develop themselves and thereby prepare for possible future promotions."

One way to do this is to establish in-house leadership and management development programs. A second way is to develop competency menus that provide specific developmental suggestions for individuals, like books to read, classroom or online courses, on-the-job assignments or shadowing opportunities.

It's also important for the succession-planning process to establish accountability. Individuals - and their bosses - must be held accountable for cultivating their talents over time and closing developmental gaps. Otherwise, IDPs, and indeed the entire succession-planning process, are ineffective. Often, financial incentives for talent development can also help. For instance, individuals can be given bonuses if they achieve their developmental objectives, and supervisors can be given bonuses if their workers achieve their developmental objectives.

These are just a few ideas for improving the succession planning process and helping newly promoted workers succeed in their new roles. For more information, visit our succession planning blog page.

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November 16, 2007 7:16 AM

Survey Says: Engagement and Delivery are What Matters

Looking at recent surveys from Watson Wyatt and Towers Perrin

If you haven't seen the recent surveys from Watson Wyatt and Towers Perrin, they are both well worth a read. Both surveys highlight the challenges faced by HR and provide some compelling evidence on the importance of employee engagement. Some hard numbers help to reinforce what HR already anecdotally knows - recruiting and keeping talent is a lot easier when the organization invests in their employees.

Watson Wyatt's 2007/2008 Global Strategic Rewards Report looks at how companies worldwide are handling attraction, retention and reward management issues. Key findings on a global basis include:

• The majority of employers have problems attracting critical-skill employees (70 percent) and top-performing employees (67 percent)
• Financially high-performing firms get performance management right. For example, their managers are much more likely to link organizational performance to rewards (51 percent versus 38 percent of low-performing organizations)
• Clearly setting expectations and delivering on the reward promise is a formula for a more engaged workforce. 69 percent of employees who say their employers succeed at both promise and delivery are highly engaged, compared with roughly 25 percent overall.

The Towers Perrin Global Workforce Study takes a hard look at employee engagement. The global study includes a survey of nearly 90,000 workers in 18 countries and information from a normative database with more than two million employee records total. The main finding from this study is that employees do not believe their organizations or senior management are doing enough to help them become fully engaged and contribute to their company’s success. This "engagement gap" as coined in the study is reinforced by the numbers in the survey:

• Just 21 percent of the employees surveyed around the world are engaged in their work, meaning they're willing to go the extra mile to help their companies succeed.
• 38 percent are partly to fully disengaged.

While I can't say I am entirely surprised by these findings, it serves to point out that more organizations need to wake up and take the steps required to get employee performance and talent management to the next level. And by that I mean, doing more than getting rid of paper forms, but by finding ways to truly deliver on organizational goal alignment, pay for performance and other initiatives. For those of you already moving in this direction, congratulations, you are ahead of the curve. For those of you that haven't, make it a focus for 2008 and if need be, take these findings to your boardroom to build the case for making talent management a strategic priority.

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November 13, 2007 10:30 AM

The Need for Web-Based Employee Performance and Talent Management - Part Three

Zoological Society of San Diego

The Zoological Society of San Diego provides an excellent example of the rollout and results of automating employee performance and talent management.

The Zoological Society of San Diego, which operates the 100-acre San Diego Zoo, the 1,800-acre San Diego Zoo's Wild Animal Park and the department of Conservation and Research for Endangered Species (CRES), rolled out its new strategic plan in January 2005. Tim Mulligan, director of human resources, was responsible for the supporting process component of the plan, and a large part of that component focused on achieving employee accountability. To reach the goal of accountability, Mulligan introduced an effective and easy-to-use web-based employee performance and talent management solution. The goal of the new solution was to introduce performance accountability and to give employees a clear understanding of what they were responsible for on a daily basis.

Since implementing the system, the society has achieved a number of benefits including establishing greater employee motivation as well as employee accountability. Mulligan says the society's 17-person executive team has wholly embraced the solution because it provides greater visibility into the day-to-day operations of the organization. Additionally, with the web-based system, the zoological society's employees are now able to see a clear connection between the objectives that have been set for them and the overall objectives of the organization, which is driving stronger overall performance for the organization as a whole.

The zoological society's experience illustrates how managers and executives can drill down into the organization to see the goals of any individual or team, providing a new ease of visibility, accountability and goal management where before they would have spent days sifting through reams of paper. With just a few mouse clicks, an executive can track how the company is progressing toward achieving objectives and identify where, or with whom, intervention is required.

With employee performance and talent management systems, executives now have unparalleled insight into their workforce -- who is performing well, who should be rewarded for outstanding work and who is at risk. This enables the executive team and the organization as a whole to take action, keep high performers happy and retain their best employees. A company can also gain an understanding of where it is positioned from a skills and competency perspective so that it can constantly help employees improve and advance the yardstick of success. Executives are then able to assess whether they have the right people doing the right jobs, and who they need to attract in order to meet tomorrow's strategic objectives.

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November 9, 2007 10:27 AM

The Need for Web-Based Employee Performance and Talent Management - Part Two

A Holistic Approach to Automation

Now that we've established the need for automation, the next step is to bring everything together and make it happen. While employee appraisals are at the heart of performance management, organizations should focus on integrating closely related business functions including compensation management, succession planning, and goal alignment and learning management into the performance management process.

This holistic approach ensures all related information is instantly and easily accessible to those needing to make accurate decisions about employees, including their compensation adjustments, promotions, risk of leaving, etc. Managers often want to compare the skill level of employees with others in their group --how well they performed on their goals year over year, what new training they completed, how close are they to any targets set for career advancement, etc. This information can be easily tracked in one system and is instantly available for workforce planning. Most companies set strategic objectives on a yearly basis, these objectives provide the overall direction for the company. An automated employee performance and talent management system can be used to map these goals for divisions, teams and individuals. The end result is that managementand employees, have a clear idea of what each employee must achieve on a daily basis to ensure the company meets its strategic objectives.

Mort O'Sullivan, CEO of a leading accounting firm in Florida, uses an automated performance management system to communicate team goals to all team members and help them to understand each other's roles: "Our firm has goals for growth, marketing development and team recruitment and retention," he said. "These now cascade down so that each individual knows how they contribute. Before employee performance management, many people simply didn't have a clue how what they did was important to the overall mission of the firm. People get it now."

In the final installment of this series, I'll look at how the San Diego Zoo automated their talent management process and I will share a few final thoughts.

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November 6, 2007 10:20 AM

The Need for Web-Based Employee Performance and Talent Management

Why is Automation Important?

The October Issue of World at Work's Workspan Magazine includes an article from Halogen CEO Paul Loucks on the need to automate employee performance and talent management. As biased as I am, I think it does a good job of summing up the core arguments for automation.

Borrowing from Paul's article, today, I'll look at why automation is important and follow that up early next week with a look at taking a holistic approach to automation and a case study from the San Diego Zoo discussing how they made it all happen.

It's no secret that employee performance and talent management have traditionally been viewed as tactical HR functions. But the rules of the game are changing with the current labor market and executives are becoming more interested in their human capital. In recent years, leading organizations have started to adopt new technology and strategies in order to streamline and improve the quality of processes -- enter web-based automation.

The automation of employee performance and talent management systems help identify and develop key personnel, as well it enables organizations to align employee goals with those of employees. In a highly competitive marketplace, instantly understanding the core and leadership competencies, strengths and weaknesses of your workforce is a powerful performance management tool. Companies are increasingly squeezed when it comes to finding the skilled workers they need to get the job done and reach their objectives. A recent U.S. Commerce Department study indicates that 60 percent of new jobs in the 21st century will require skills held by just 22 percent of U.S. workers. In such a tight labor market, companies need to not only attract workers, but create an opportunity for them to grow within the company to retain them over the long term.

In addition, industry experts are predicting that automated talent management and employee performance measures will become a standard part of Wall Street critiques and corporate annual reports within the next five years.

The end result -- automation is critical from an HR and business perspective. Early next week I'll look at some best practices for automation.

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July 11, 2008 5:00 AM

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July 9, 2008 5:45 AM

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June 30, 2008 8:15 AM

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