Turning Unused Employee Performance Data into Pure Gold

by Cathy Missildine | Posted | Business Impact

Turning Unused Employee Performance Data into Pure Gold

At this point, I’ve honestly lost count of how many times I’ve written about employee performance data being the “most underused data set in HR.

Although performance management is a subject I know well, something continues to baffle me time and time again.  It relates to what happens after the performance management process is over.

Nothing.

That’s right. After the appraisals are filed away, nothing typically happens until the next cycle.

No analyzing, nothing.

I find this profoundly sad because I believe there is a treasure trove of data sitting idly just waiting to be used. Think about it — revealing  insights around high performers, average performance scores and performance trends desperate to be discovered.

Employee performance data: Perception vs. reality

There is one problem associated with analyzing performance data, and that’s the credibility of the data itself. We all know that performance data has had the perception of not being valid, accurate or relevant. Unfortunately, in some cases, this perception is true.

So how can you, as an HR professional, do your part to change this perception?

 Before your organization can even begin to look at the data set, and analyze and derive value from it, there’s some very important work that needs to be done, otherwise the old adage, “Garbage in, is garbage out,” will hold true.

To create the best possible performance data set (ever), your organization must focus on the following:

1. Make sure that the competencies being measured are the ones that drive business results. Far too often, organizations choose competencies from a library or even copy them from another company. This approach can be dangerous because the competencies that drive results for one organization might not be the same for another. 

2. Provide managers with the training they need to effectively use the performance appraisal tool and to fully understand rating scales. Often, managers aren’t sure what constitutes a meets or exceeds expectations. Because of the subjective nature of this data, training is critical so that managers can make the best decision about ratings.

3. Arrange calibration sessions in which managers must articulate and defend the reasons for performance ratings. Not only do ratings have to be clear and understood, the REASONS for those ratings must also be valid. With so many biases at work in the process, having a second set of ears is an excellent idea.

4. Create performance appraisals that measure what they’re supposed to measure. In other words, don’t make them so generic that they aren’t relevant or applicable. Sometimes, to streamline the performance management process, HR goes with one performance appraisal for all employees. Again, not ideal because the competencies that drive results differ across job families. Making sure the tool is relevant is key.

Richer performance data and competitive advantage

Admittedly, while it’s impossible to remove all subjectivity from the performance management process,  it is possible to extract richer, more objective data by adopting the best practices mentioned above.

This richer data can serve as the basis for employee investments that drive better business results — and greater competitive advantage. According to an Harvard Business Review article, if you want better performance from your top employees — perhaps your greatest asset and your largest expense — you’ll do well to favor analytics over your gut instincts.

Even if you follow the four practices in this post, you can still run into the issue of data credibility.

So let me give you a tip here. Start by working with your managers to use their own department’s data first.

Here’s an example:

Discussing performance management trends — comparing average performance scores year over year and percentage of goals that have been achieved/exceeded — will create interest in this data especially if you can tie these trends to revenues and/or profits.

After the manager sees the value in this data, the negative perceptions about the process will decrease because, as the rater, it’s the manager who is responsible for the data being used. Not surprisingly, sharing this data with managers can result in a more robust interest in the process.

In today’s environment, doing more with less is the new normal, which means productivity and performance are a top priority for managers. So if your organization really wants to understand the true ROI of your human capital, it’s time to use performance data to leverage the true potential of our workforce.

Your Turn: Do you have any tips for creating the best data set?

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