HR.com’s Marc Miller has released his “Outlook for 2006 Technology,” and he has some observations worth noting.

His 10 major points:

1. HR technology software applications will continue to
increase in functionality. Applications must address the
changing demographics and needs of the aging
workforce and the global workforce.

2. Vendors who were in “best of breed” or application
“niches” will seek to expand their offerings.

3. Mid Market organizations will be a major target of all
vendors including the traditional ERP vendors who will
down market, and best of breed vendors who will seek
to offer new one-stop bundled solutions.

4. HRO as a strategy will continue in its wide acceptance,
now considered a mainstream approach with clear cost
benefits.

5. HRO vendor activity such as mergers and acquisitions
will level off or cease in 2006. Alliances between
multiple providers, though, will continue.

6. Organizations will increase their HR Technology spend
budget for 2006/7.

7. HR executives will firmly grasp the need for
performance metrics and other measurements to
preserve their worth and to gain credence as a strategic
business partner in organizations. Driven by that desire,
HR executives will seek software applications that make
such metrics user friendly and easy to calculate and
present.

8. Off shore deals by companies headquartered in
American companies will be limited and possibly
legislated against at the state level. Although mostly
pertaining to IT support, HRO with off shore support
will not be readily accepted by American workers.

9. Privacy and Internet communications standards
such as XML consortium standards will continue to be
issues and will be embraced by more organizations,
especially those in a global marketplace with
global structures.

10. “Web Services” as the next new thing or wave in
technology and service delivery will emerge and make a
very visible initial impact on HR software delivery.

Here’s some commentary at the HR Technology Discussion Board

Article found here discusses the government’s efforts in the pay for performance arena. Apparently, the FAA and Veteran’s Health Administration are already online with the Department of Homeland Security and Defense Department working their way through the process.

Maybe there’s hope for government yet.

One of the questions we hear most often when talking about succession planning has to do with bench strength. Bench strength is another one of those sports analogies we’ve all come to love that speaks to the depth of our organizations. Who do we have waiting in the wings to step into a new position when needed?

The issue gets a lot of press whenever a high level executive at a major company prepares to step down (as with Jack Welch at GE) or dies (with the unfortunate passing of Jim Cantalupo of McDonalds). In McDonald’s case, the company had no significant succession plan and struggled both in terms of strategic direction and stock price. In Mr. Welch’s case, the succession planning process had begun years in advance because both the position and the person were so obviously important as to merit some serious thinking about who would step in. But what about lower down in the organization at the VP level, the director level, even the manager level?

The truth is that, in the new information worker driven economy, every level is important. During the industrial age, when most workers were performing tasks now done by machine, succession planning for the organization was basically irrelevant. But now think about Google. Google exists because a couple of guys had a good idea and the will to make it work. The company thrives because it hires the smartest people it can find and sets them free to do their best. No machine can do what any Google employee does, and most likely, none can do what you do either. The skill set is paramount.

So back to bench strength. Today’s workers are basically free agents (more sports analogies, sorry). As we all know, the days of working for one employer for an entire career are long gone. The norm is now for employees to move freely about the business world wherever they can find the best deal for themselves. How can a company make them feel important, show them movement, win the war for talent? Thinking pragmatically about bench strength is part of the answer.

So where can you start?

Understanding and evaluating your bench strength is predicated on visibility into your workforce:

· Who do you have available?
· What are their strengths and weaknesses?
· What is their skill set?
· What motivates them?

These data points can come from a variety of places. They can come from other systems or processes such as performance assessment, competency assessment, performance reviews or even Myers-Briggs. The point is that you can’t begin to think about bench strength or succession planning until you’ve got a good picture of your workforce.

Once the visibility is in place, you can begin to analyze the data from the perspective of bench strength. You can seek out the talent gaps in your organizations to find out what skills are lacking. You can examine which roles have many potential backups, and which have none. You can explore the far reaches of your company to find talent in places you’d have hardly looked before.

The challenge is figuring out where to start and what tools you’ll use to get there. And the answer is unique to your organization.

What strategies and tactics have you used to understand bench strength or implement succession planning? Share your experiences and your wisdom.

I’m just taking a gander at a replay of a web conference in which our own Rob Bernshteyn participated along with a couple of very smart guys from Watson Wyatt.

It covers a topic I think is pretty critical to the whole proposition of what we’re doing here at SuccessFactors: how are performance management systems actually linked to real, financial, bottom-line results that get noticed and rewarded by the powers that be?

To whet your appetite, here is an impressive fact: companies with "strong" workforce performance management systems have financial performance more than double that of companies with "weak" systems according to Watson Wyatt. Seriously, it’s true. I saw the slide.

The logic goes something like this:
Financial performance is driven by four employee-related factors (see slide);

1. Commitment – Motivated to help the organization succeed
2. Line of Sight – Understand organizational and personal goals, how they relate, and how to achieve them
3. Enablement – Have the resources, tools they need to execute
4. Integrity – Play by the rules because its the right thing to do

In turn, each of these drivers have drivers of their own:

1. Commitment – Performance-based rewards / employee development
2. Line of Sight – Performance management / cascading goals
3. Enablement – Seeking out and acting on employee suggestions / involving employees in decisions
4. Integrity – Understanding company values / living those values

It’s somewhat theoretical at this level, so if you’re interested, I encourage you to take a look at the webcast. Some really practical, interesting discussion. In any case, the bottom line is that performance management systems can support the main employee-drivers of financial performance and in this way, can directly affect the overall success of the company. Seriously.

UK site Management-Issues highlights some of the cultural difficulties in bringing performance management to other countries. Some reactions revolve around the exporting of "American" efficiencies to societies in which they’re not appropriate. Interestingly, in Asia, some objections have more to do with hierarchical, experience-oriented companies pushing back against the the idea that people should be evaluated in a more meritocratic fashion.

Performance management is an idea that employees often greet with skepticism no matter where they are in the world. Some see it as just a management gimmick to get rid of some people or promote their cronies. But once the system is in use, not only do people realize there is nothing to fear, but embrace the chances for feedback and the opportunity for advancement it affords.

At SuccessFactors, we’ve got success stories from around the globe. British-Telecom (UK), GemPlus (Switzerland) and Jollibee Foods (Philippines) are just some of the companies using our software. But even companies in the US with international reach use the system everywhere they do business. Just for example, Kimberly-Clark has users on the application in 14 languages!

If you haven’t seen it already: SimplyFired.
The contest to find the most horrible story about getting fired.
And they’ve crowned a winner.

Check out the site to read some funny and terrible stories.

Came across this article as CIO Asia magazine on the state of strategic HR there.

The author, Charles Moore of Heidrick & Struggles in Singapore believes Asia is lagging behind in "appreciating how HR has changed and how critical strategic HR can become." He believes that this is partially a function of a lack of HR professionals equipped to handle these newly strategic roles, but also due to a traditional tendency to resist hiring aggressive, persistent HR people. 

The interesting part is this warning:

The
disturbing trend for HR is that the focus on talent management is being
driven more by CEO’s and not by HR executives, simply because there are
not enough HR executives equipped to deal with this. Companies cannot
have great products without great people, and they cannot sell great
products without great people. Only companies that focus on HR’s talent
management role will become truly great.

To paraphrase: if HR can’t figure out how to focus on talent management instead of pushing paper, those responsibilities (and the opportunities that follow) are simply going to be taken away from them.

Hope everybody had a great long weekend.

I don’t know if this is new, of if its just new to me, but I’ve found an e-course at about.com on “Powerful Performance Management,” penned by Susan Heathfield. Basically, you get one email a week for four weeks on the topic. It has the following parts:

• The definition of performance management,
• Why performance appraisals are universally disliked and don’t work,
• How to use performance management to help people succeed and improve,
• How to communicate performance feedback,
• How to set measurable goals as part of the performance development planning meeting,
• How to participate effectively in a performance management system, and
• How to integrate 360 degree or multi-rater feedback into your performance management system.

I’m not generally in the business of sending people to about.com, but It seems like this might be a good introduction to the topic of performance management. As I get the courses, I’ll report back on their worthiness.

Here’s the link to sign up if you’re interested. If you’ve gone through this course, let us know your thoughts.

HR Magazine has a cover story on the uphill climb involved in changing HR.

We’re often brought into a situation to help HR bring visibility to
their workforces and align goals as part of a larger effort to change
the company. From where we sit, the uphill climb is slowly evening out. The
smart companies know that to stay competitive, they have to make HR a
strategic business partner. Without the right people in the right places at the right times, the rest of it doesn’t matter.

A Quote:

John Sullivan, a professor in the management department of the College
of Business at San Francisco State University, learned just that when
he took a year’s leave in 1999 to be chief talent officer for Agilent
Technologies, based in Palo Alto, Calif. The first day, he heard the
common refrain, “Oh, we love you; we’re really looking forward to
changing.”

Two days later he was told, “John, I’ve been here 20 years, and this is how we do things.”

“I ran into resistance with people saying, ‘Who are you as an outsider
to tell me what to do?’ ” Sullivan recalls. “I had been told
specifically by senior leadership that they wanted HR shaken up because
the war for talent was on and the old model wasn’t working. But, even
if you get that message from the CEO, the people at the director level
often haven’t heard that message or they don’t really believe that’s
what you were told because their premise is ‘We have been doing fine.’
”

Lesson learned? “Don’t assume they believe your mission,” says
Sullivan, “and don’t start making changes until they buy into the fact
that HR must change and that it’s not you causing that change, but that
you’re just the weapon that senior executives are using.”

Here’s a ‘Q’ from today’s edition of the "Dear Workforce" email newsletter:

We are a health care system employing
nearly 5,000 people. Our philosophy on salary changes no longer fits our
business. Up to now, we have boosted employees’ pay when the market dictated it.
The current practice greatly increases costs and may reward employees whose
performance does not merit an increase. What best practices are other health
care organizations following in this regard?

The ‘A’?

• Establish compensation levels that eliminate
  unwanted turnover
  and position your organization as a sought-after
  employer.

• Focus on variable compensation, incentives and
  bonuses that motivate employees to boost quality and productivity.

• Redesign your benefits programs so employees can
  customize packages to their specific needs.

• Develop employee recruitment and development
  programs that improve your competency levels.

• Adopt aggressive performance management policies
  that identify and reward high
  performers, even while stimulating personal and professional growth.

The Lowdown:

Basically, the answer encompasses some aspects of comprehensive Performance Management. In this sense, I agree with the author – Thomas Flannery of Buck Consultants in NY. The problem is, of course, that the question submitted is really about Pay for Performance. The challenge of paying for performance is one that’s getting quit a bit of exposure these days and the truth is that there’s no easy ‘A’.

The only way to truly pay for performance is to 1. Align the efforts of your workforce with the overarching goals of your organization. 2. Systematically and quantitatively Evaluate performance against those goals through a comprehensive review and assessment process. 3. Adjust all types of compensation (base, benefits, stock, etc.) in a way that’s correlated directly to that performance.

What kinds of tactics have you used to pay for performance. What works and what doesn’t?