Pay for Performance a global phenomenon

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.”

Frank Lynn guest posts: When you have an army of direct reports

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.

Succession planning the new recruiting?

Here’s a little ditty at CLO magazine about the shift from recruiting to succession planning. As the talent pool decreases and boomers retire,  companies are finding they simply don’t have enough good people to fill senior roles. According to the Right Management Consultants survey mentioned in the article, the number of companies in this situation is around 80% and "more companies prefer to build their own future leaders from the ground up…they are assessing their high-potential employees to identify which ones have the qualities they desire in senior-level managers, and then providing them with the necessary training, coaching, and managerial experiences to fully grow them into upper management. Therefore, companies must have a good succession management system which tracks the executive qualities, skills, and abilities that have been the most instrumental in their managers’ and organization’s successes."

We’ve got a number of stories here about customers leveraging our product to reduce recruiting expenses through better succession planning and this survey seems to support the idea.

 

On robots and performance reviews

The seeds of an interesting conversation are planting themselves here with this post called "So that’s why my peformance reviews sound like they were written by a robot" and here at systematicHR (especially in the notes by our good friend regina.)

The topic, in regina’s words: "technology can be an enabler of creating an engaged culture but for me it is doubtful that when a mgr. can pick phrases about perf from a database that this will create engagement. This kind of stuff keeps managers and employees detached vs. engaged."

Since this discussion was spurred by a CFO magazine article that is talking about our client Kimberly-Clark, I thought I’d get out in front here and try to give a little background on this. So I spoke with Randy Reynolds, our senior director of product management to try to get some of our thinking about the nature of pre-defined phrases (aka robot reviews). Here’s what Randy had to say:

Using our pre-written review text or coaching text is in many cases the best feedback some employees have ever received from a manager.  Certainly, all employees would like to receive well-thought out specific feedback written only for them by their managers.  The reality is that managers often don’t take the time to do this.  In the absence of automated tools, they resort to meaningless phrases like “Max did a great job on the ACME project”; or “keep up the good work”; or “writing skills could use improvement”.  In some cases automated text that has been selected by a manager – not a robot, is better than no feedback at all. 

From a best-practice standpoint, we recommend using the automated text as a thought starter, not necessarily as the verbatim feedback that should be given to an employee.  People often find that editing a written document is easier than starting from scratch.  That is how we recommend using our writing tools.  Start with a pre-written sentence that roughly conveys the feedback you want to provide.  Add specific examples of positive or negative behavior that supports the pre-written text.  This shows the employee that you have taken the time to provide specific feedback while gaining a short-cut through the use of the automated text.

Bottom line, every bit of feedback is important and valuable to employees and not every manager has the skills to construct meaningful feedback.  Automated writing tools help bridge this gap.

In this way, these tools do truly support engagement by helping to provide feedback in places it would not ordinarily be found. Some well-chosen feedback, even if pre-defined, is most certainly better than poorly constructed feedback or no feedback at all.

WooHoo, it’s performance review time

Over the weekend, Newsday – a NY newspaper – published an article called "Hey, boss, improve those performance reviews" that quoted some of the stories that have been submitted to our Worst Review contest. The article is about some of the reasons reviews are often so poorly given and poorly received and talks about some ways we can make the whole experience a little better.

Some tips from the article

Nothing in the review should be a surprise. That means bosses have to give more frequent feedback and hop on problems as they happen. Hard to do with so many other obligations? Of course, but remember what Stephen Covey says in his legendary book "The Seven Habits of Highly Effective People": You’re far better off making time for issues that are important but not urgent – so they don’t go on to become urgent.

As for those whiny, self-aggrandizing, argumentative employees – the ones supervisors want to avoid – you might consider what Paul Baard, a professor of communications and media management in the graduate business school of Fordham University, has to say: Draining as it may seem, your regular feedback can actually wear down those challenging types – he calls it "systematic desensitization."

Learn language that elicits constructive responses. As Baard says, "People don’t like to be ‘should’ upon." You could tell someone he really annoys his colleagues – or, you could say: "Bill, you’re tremendous in sales. And I want to help you be that strong in interpersonal relations."

Loosen up when appropriate. With today’s pressures, you may have misread a person’s contribution – and if she comes up with examples proving you wrong, "you should not be too proud to admit having made a judgment error," Baard says.

Also, remember that it’s not just about the employee’s compliance. Sometimes see where you might bend a little. Boyle says that if an employee is consistently late, she looks to adjust the person’s start time. "I tend to be flexible."

 

Succession planning beef, anyone?

Sometimes all the high-level talk about performance management can leave you – how should I put this? – wanting more. Today I sat through a 45 minute webinar that left me thinking – "alright, I know you CAN do it, and it SHOULD work – but can you show me HOW TO do it, and that it DOES work?" I mean, where’s the beef? Show me the money! Is any of this actually real?

Well, in that vein I came across some data today showing that one of our customers with about 4,000 employees is saving half a million dollars per year on recruiting costs (because they are able to identify and promote more people from within), and has identified 40% more successors than before implementing the technology. I’m not bringing this up to toot our SuccessFactors horn (alright, maybe just a little) but instead, to show you some beef.

It’s easy to get caught up in the jargon and sales pitches when you’re talking about enterprise software. Don’t forget to ask about the beef.

On-demand HR apps for SMBs

Interesting report from AMI Research showing that On-demand HR applications are taking off among small and medium sized businesses. There’s a very strong case to be made for software as a service (SaaS) use among SMBs – low upfront costs, easy implementations, high configurability, super-quick time to real value and so forth. We released a couple of completely new products recently to serve these markets – Professional Edition and Manager’s Edition. I’ll spare you the commercial (you can click on the links if you’re interested).

From the report’s press release:

According to Sau Lam, Research Analyst at AMI-Partners, “Several factors are fueling this trend. Traditional on-premise HR applications are often too costly, time-consuming and resource-intensive for most SMBs to deploy and manage. Full-service HR outsourcing can also be too expensive. Plus, it requires that customers sacrifice visibility and control. Web-based solutions can potentially provide SMBs with a more viable option for servicing their HR needs,” Ms Lam continued. “At the same time, SMB HR needs are growing. They need to automate operations to meet increasing regulatory requirements, and compete more effectively to maintain a dwindling supply of skilled personnel in a shrinking labor force.”

Much has been made about the Internet as a force of democratization, and that’s true even in the world of enterprise software. As a former small business owner, I loved SaaS applications becuase they gave me functionality that similar sized competitors could only dream of. In that way, they lent a real competitive advantage. That advantage is especially true with HR software.

Workforce performance management is, in some ways, more impactful in smaller companies in which there is less margin for error. Good HR applications can reduce administrative burdens that can bog you down. They can also provide the benefits of goal alignment and performance management processes that make sure everyone is pulling together and that the company is getting the most out of its employees and vice versa.

 

SAP/Oracle ignoring HR?

Jason Corsello asks the question about SAP after attending the company’s Industry Analyst Conference in Las Vegas.  Apparently, not much time was spent on it – Jason says 15 minutes out of two days. Then, DubDubs wonders about Oracle – saying that the HR track at OracleWorld was left until the last day – resulting in a lot of irrtated HR people.

Jason also makes mention of SAP’s platform, NetWeaver, that I think supports the ideas in yesterday’s post on purposeless platforms:

Although SAP is outpacing their arch-nemesis Oracle in the applications space, and their ESA (Enterprise Services Architecture) vision is a solid strategy for existing customers that have already sank millions in SAP, I was quite surprised in their lack of focus on what many customers are demanding today — applications that can be easily turned on and off with highly configurable options and rapid payback (I actually saw one slide that stated a payback in 3.4 years).  Instead, they are singularly focused on offering a business process platform (NetWeaver) bundled with hundreds of Prue-defined "services" combined with zaps (a fancy name for packaging customized application functionality). 

It supports Greg Gianforte’s point that the big guys are focused on delivering purposeless, behemoth platforms instead of applications that address business needs, are easy to deploy, easy to configure, and quick to return value.

If a rising tide raises all boats, a turning tide is bound to sink some.

Best friends forever: HR and Marketing

Frank "The Proposalnator" Lynn (author of this recent post) points me to an article in Fortune called "For Happier Customers, Call HR." It echoes something I heard recently at a talk given by the legendary Jac Fitz-Enz – namely that unless marketing backs up its taglines with some customer service people who drink the kool-aid, what you get is a load of customer experiences that don’t match with customer expectations.

The article tells the tale of customers of T-Mobile who were told they would "Get More," but instead got long hold times and clueless reps. So guess how you solve the problem? Put HR and Marketing together to make sure the people being hired match the values being promoted.

From the article:

Sounds like common sense, doesn’t it? But surprisingly few companies do it. "We call the gap between HR and marketing the ‘white space’ in organizations," says Don Schultz, founder of a think tank at Northwestern University called the Forum for People and Performance Management. "The customer-contact people don’t report to anyone in marketing or have any contact with them." Neither does anyone in HR, so HR isn’t able to put customer-service people in place who can deliver on the marketers’ message. Northwestern’s latest research (see ROI of Integrated Marketing at www.performanceforum.org) shows that both HR and marketing managers are well aware of the white space: "We started studying this because people from 40-odd big companies like Honeywell, GE, and AT&T asked us how to fix it." 

Read more for how T-Mobile addressed the problem. 

More on forced ranking

As a followup to a previous post on forced ranking, I thought you’d like to see this article at workforce.com. It reprints an appendix from Dick Grote’s new book called Forced Ranking: Making Performance Management Work.

It’s a memo from a CEO to his company explaining the benefits of an upcoming forced ranking process and how it will work. It’s easy to see how communicating this well can remove some of the fear from the process and highlight the win-win aspects of the initiative.