An article from the WSJ (at AZcentral.com) on paying for performance. The article cites a few examples of companies struggling with the challenges of implementing pay for performance. It’s hard to be surprised by the fact that employees aren’t all thrilled with the idea of not getting the same increase as others in the company.

That said, companies have a choice.  In the words of Martyn Fisher, Director of Talent Management at National Starch and Chemical: "As much as we would regret our average performers leaving, we’d regret more an above-target performer leaving, and that is the tough choice we have to make."

Via a google search I came across an interesting interview at a site called the Business of Healthcare. Specifically, I found a podcast with a gentleman named Steven Barney on the topic of Human Resources in healtchare. Mr. Barney is the SVP of HR for the SSM Healthcare system in the Midwest.

Though the interview starts with the interviewer stating that he always felt that “HR is just a barrier, a bureaucratic engine that is just a support function” the topic soon shifts to more valuable thinking from Mr. Barney. I’d recommend a listen if you have the time (it’s about 50 mins – a little long for my taste).

Healthcare is a very unique industry with a number of difficult people-related challenges. As Mr. Barney notes, 40 – 50% of all expenses in the hospital world are people – they are the main instrument for providing care. But, with a very diverse workforce with workers from across the educational spectrum and a “tradition of hierarchy” aligning the workforce behind common goals is no simple task. Nevertheless, he says, there are just simply too many moving pieces to allow credentials to get in the way. It’s necessary to bring everyone to the table in order to move forward.

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Just catching up on some light reading. Before it was Dubs, but now we’re on Jason’s list of five talent management vendors to watch in 2006. 

At the ZdNet SaaS blog, Phil is listing the analysts he thinks really get the on-demand model. I’m not familiar with everyone on the list (I’m working on it). Though it could be misconstrued as blatant cow-towing, I’d vote for some of the guys who cover our space.

I came across this interesting interview at HCI.com on the nature of self awareness as a tool for managers. The interview is with Dr. Miriam Lacey, a professor at Pepperdine University who focuses on organizational behavior and development. The point with the most resonance for me was this one:

Observe your impact on other people. If you are in a meeting, what happens after you talk? Do they ignore it? Do they get inspired and energized? Are they rolling their eyes and looking the other way? We are not taught to look at the impact we have on people. That’s a skill managers ought to develop. Seeing your impact and adjusting your personal style accordingly is the best predictor of management success that I know.

The best people I’ve ever worked with are the ones who can read others and understand the impact they are having on them.  Conversely, the most difficult to deal with are the people who “are who they are” with no interest or ability to change or adapt to different environments.  I think Dr. Lacey makes an often overlooked point: each person has the ability to “adjust their personal style” to maximize their impact. Those that don’t may be missing a critical management competency.

SuccessFactors happens to be located directly across the street from Siebel headquarters in San Mateo, CA. As most of you know, Siebel was bought last year by Oracle and, as with any acqusition of that size, the future is unknown for many of Siebel’s employees.

So today, circling the Siebel buildings are these shark-like trucks – picture below – with a message from CRM competitor SalesForce.com: "Is there a U in your future?" and sporting the now familiar "No Software" moniker with a slight adjustment  to read "No Future."

In case you were wondering, this is what the war for talent looks like:

By way of disclaimer – SalesForce.com is a customer of ours and SuccessFactors is a customer of theirs. Yesterday we announced our participation in their AppExchange – more on this later. 

I’ve been following an interesting line of thinking going on at Talentism about the idea of "Strategic HR," but I haven’t yet pointed it out. Though I do agree that the topic is timely and in some ways worthwhile, I haven’t waded in because I have some reservations about holding forth on HR strategy when, as Jeff himself says "Strategy is almost always worthless. Not because the strategy is bad, but because there is usually a huge gap between the strategy and the execution."

As a relevant aside, on my first day at SuccessFactors my boss sat me down to talk about the spectrum between strategy and execution. He argues that one of the biggest challenges for any business – and indeed for any employee – is to choose where on the spectrum to land. Too strategic and nothing gets done. Too tactical and your actions have no rhyme or reason. The word ‘balance’ is wrong, because it implies that you’re seeking the midpoint of the spectrum. In fact, you are seeking the point on the spectrum that’s appropriate for your role, your company, your department and your industry. It’s always a little different.

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A Towers Perrin report via Management Issues reports on the global spread of pay for performance. The success of the approach in North America and Europe has led to adoption in Asian and Latin American countries alongside regionally-based reward packages.

James Matthews a Towers Perrin principal noted:

“We are seeing annual bonuses, which used to be reserved for the
professional-level employee, being used more broadly in lower levels in
the organizations, represented in our study by the manufacturing
employee, said. For the
first time, in countries like Canada, France, Korea, Mexico and the
United Kingdom, year-end bonuses for this group are the norm and not
the exception.”

Ventana Research released this note saying, basically, that ERP (Enterprise Resource Planning) systems (Oracle, SAP and others) don’t do workforce management well. In fact, they assert that a choice to use an ERP system to manage the workforce is a statement that workforce performance is not a top priority for the organization. They even go so far as to say "Ventana Research advises organizations not to rely solely on ERP for processes and systems to manage the workforce." Pretty interesting stuff.

HR groups are often under significant pressure (or even directed) by IT and Finance to go with an HR module from the ERP vendor they already deal with. It’s thought that this will simplify data integration as well as the operations and management of the new software. The reality is tha workforce performance is just not something that’s core to the big ERP guys. They throw it on there, or in some cases give it away for free to make sure they hold their position of influence at your company.

Ventana urges against this line of thinking:

During the holidays, one of my good friends from Germany visited me with her boyfriend, Elger.  At 33, Elger is one of the youngest Chief of Detectives in Germany.  He’s an amazing guy—black-belt in Judo, fluent in Russian and German, and pretty good at English for someone new to the language.  He served on the German narcotics beat for two years, and while here in the states he could easily spot drug dealers hanging out by public transit stations.   
 
In Germany, the police force is a civil service job.  Elger has 106 direct reports.  I asked him how he did performance reviews for that many people, and he told me that it was a labor intensive process that required the assistance of his secretary.  Of course, I had to tell him about SuccessFactors’ software—that it has a writing assistant with “starter” text so that he and his secretary wouldn’t have to re-invent the wheel 106 times.  And it even has a proxy feature, so that he can delegate the writing of performance reviews in case he’s too busy fighting crime.  And our application is available in German.

If you feel like a general commanding an army of direct reports, SuccessFactors has the right on-demand artillery to help you align, develop, motivate, and maintain your high-performance workforce.