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);
- Commitment – Motivated to help the organization succeed
- Line of Sight – Understand organizational and personal goals, how they relate, and how to achieve them
- Enablement – Have the resources, tools they need to execute
- Integrity – Play by the rules because its the right thing to do
In turn, each of these drivers have drivers of their own:
- Commitment – Performance-based rewards / employee development
- Line of Sight – Performance management / cascading goals
- Enablement – Seeking out and acting on employee suggestions / involving employees in decisions
- 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.