Of course they do? But why? 

Well, according to this McKinsey survey, everyone thinks they matter for reasons like employee attraction and retention, meeting responsibilities to employees and so on. But when asked whether in fact they actually do matter, in other words – whether the results of the benefits programs have ever been measured – the vast majority (78%) of people surveyed said no.

Now, the point of the survey isn’t to say that because the benefits of the benefits aren’t measured, they should be stopped. Rather, it’s to point out that executives don’t understand why the benefits they provide matter to employees. And since thy don’t understand it, they don’t know what levers to pull to help attract and retain talent.

So I pose the question to you – what kinds of benefits do you think are most attractive to top talent? I’m curious to hear your comments, and perhaps we can help sort these unknowing executives out.

Wanted to point you to an interview that DubDubs at systematicHR did with our very own Rob Bernshteyn. He just published the article, but the interview was done a ways back. In any case, I think Dubs picks up one some important points about us (technology, analytics) in the context of the market, and I encourage you to read it.

He’s also done some other great posts recently on the future of HR technology and Does HR technology define HR strategy?

According to this Fortune article, it’s because they don’t know what’s expected of them. “A big reason is that a huge percentage of new employees, including new managers, are not clearly told what they were hired to do or what their goals should be for the first six months and the first year.”

Makes good sense.

Apparently, nearly 50% of employees fail in the first 18 months of their jobs. And we’re not just talking about individual contributors, either. Actually, the higher up you are, the more likely you are to fail.

But it seems to me that blaming lack of direction for failure doesn’t address the whole problem. It’s a company’s fault for not providing enough direction – but it’s an employee’s fault for not seeking one out. Beyond that, bad managers, personality mismatches and lack of appropriate competencies are all good reasons for why new employees fail.

It’s always been a belief of mine that taking a job (or hiring someone) is like the beginning of a new relationship. There are all kinds of reasons why personal relationships fail. I’m sure we’re all familiar with many of them. Sometimes, even knowing our goals for the relationships is not enough to keep it alive when other parts are missing.

Check the article out, there’s even a cool quiz to take to find out if you’ll succeed in your new job.

About an American company. As told by Jason Corsello.

It’s an entertaining tale, you should read it even if just for a laugh. But it make you take note of the fact that Performance management ain’t a cure for stupidity, – that’s for sure.

It often occurs to me that some of the highly educated people that comprise the management ranks at our nation’s most highly regarded companies are so capable of strategizing that they never actually DO anything. They just think.

Not that there’s anything wrong with that by itself.

But, in that world, the people that are actually doing the work are just that – doers. Well what if the doers thought and the thinkers did? What a wonderful, productive world it would be. In some ways, I think that’s part of the promise of goal alignment in particular and performance management in general.

Just a thought.

Note: This post was written by SuccessFactors’ Director of Customer Results, Erik Berggren.  Erik is leading a team focused on understanding - through detailed, data-driven analysis - how specific talent management behaviors drive business results – and then working to build those learnings into our product for the benefit of our customers. I’m excited to host his thoughts here, and I look forward to sharing more of our new knowledge via this blog in the future. So please enjoy Erik’s contribution and as always, I encourage comments. We want to know what you think. – Max

Talent management is about more than efficiency
Pull, don’t push your way to meaningful ROI

I recently came across The 2006 talent management survey, conducted by IHRIM and Knowledge Infusion, which found that 77% of HR professionals think that talent management will only increase in importance over the next three years. In general, I think that’s great, because it means that people as an asset is a concept that’s making its way into the HR mindset. But, it also worries me, and here’s why: If HR Professionals think they can simply buy the software, put it in, turn it on and get full benefits, they are mistaken.

To maximize the return on investment in talent management, the solution isn’t just to put the processes out there and hope for the best, nor is it to push it out with smart internal marketing and hard selling. HR professionals need to make sure that their internal customers believe that there is value in using it the enhanced process, and get involved in making it work. That “pull” is critical, without it, organizations will not get a full return on their investment.
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Jason Corsello picks up on our recent research announcement – calling the approach “groundbreaking.”

You can see some early thoughts from SuccessFactors Research as previously posted here. Keep checking back for more of the “From our research” series.

We’ve all experienced it. The loss of motivation at work. Sometimes it comes in waves. Sometimes in perpetuity. But why? What are the factors that influence motivation?

This is the question posed (and answered) by this article by David Sirota, recently reprinted in HBS’s Working Knowledge.  It’s often said that employees leave jobs because of their managers, but that’s just at the end of the line. Managers also have a tremendous impact on motivation levels. Regardless of whether organization wide policies are healthy or not, individual managers can, all by themselves, motivate or demotivate people.

But there’s lots that can be done to make sure things stay positive. According to the article, there are three separate and equally important spheres of influence for motivation – Equity (the need to be respected and compensated fairly), Achievement (to be proud of the job, one’s achievements and company) and Camaraderie (good relationships with coworkers).

The article goes on to outline 8 tactics for maintaining and enthusiastic workforce. They’re worth both reading and doing.

Over the weekend, the NYT (again) tackled the subject of top executive compensation. But this time, they added some cool charts and graphs to illustrate how utterly out of synch pay has become with corporate results.

My favorite is this one which contrasts some of the worst offending companies (where pay went up when a company’s performance went down) with some of the best values in CEOs (where performance went up but pay didn’t keep pace).

As more and more companies move to a system where performance is correlated directly to pay for their employees (as well it should be) it seems only logical that the same would be true for top executives. One would think that a scenario in which employees are denied raises of a few percentage points because the company didn’t have a good year, while the CEO walks off with bundles of cash would make “employee engagement” somewhat of a difficult job.

The Times also questioned the impartiality of compensation consultants in a separate piece, from which I truly enjoyed this particular quote from Warren Buffett:

Too often, executive compensation in the U.S. is ridiculously out of line with performance,” he wrote in his most recent annual report. “The upshot is that a mediocre-or-worse C.E.O. — aided by his handpicked V.P. of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet & Bingo — all too often receives gobs of money from an ill-designed compensation arrangement.

Note: This post was written by SuccessFactors’ Director of Customer Results, Erik Berggren.  Erik is leading a team focused on understanding - through detailed, data-driven analysis - how specific talent management behaviors drive business results – and then working to build those learnings into our product for the benefit of our customers. I’m excited to host his thoughts here, and I look forward to sharing more of our new knowledge via this blog in the future. So please enjoy Erik’s contribution and as always, I encourage comments. We want to know what you think. – Max

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I read the McKinsey Quarterly Article “Competitive advantages from better interactions” with delight today. It is a great article and raises a few interesting issues for me.

Let me explain.

Over the years, I have had the opportunity to work in numerous countries around the world on dozens of projects as a management consultant.  Sometimes, working in different industries and across disparate geographies makes you feel like you are traveling in time, as it occurs to you that some places are just so far behind others when it comes to business practices.

It is always correct and sometimes popular to promote the idea of relentless teamwork. But frankly, I don’t believe it.  My hypothesis is that there is a diminishing return on the margins when it comes to teamwork. There is such a thing as too much. I have had consulting experiences in which an idea or new concept was evaluated by senior executives based on a  “did she see it?” or “was he involved?” analysis. The obvious assumption in the thinking is that the more interaction, the more “teamwork,” the better the result.

Recently, we conducted some rigorous research leveraging our vast customer data on performance and talent management behaviors, including the aggregate usage of more than 1.5 million users. We studied in detail the financial performance of our clients both in terms of profitability (Return on Equity) and in terms of  top line growth. The idea was to understand what over and under-performers were doing in terms of steering and measuring teamwork as a core competency.

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A Note: this post was written by a guest writer, and does not necessarily represent my opinion. That said, I think it’s important to host a variety of thoughts and perspectives on the blog and thus, I give you the following article written by David Harper, Principal Member and Directing Manager of The Advisory Alliance. As always, please feel free to comment.

Your Best Talent:  Not Just an Asset, But a Machine. 

If you’ve stopped repeating the mantra “Our people are our most important asset.  Our people are our most important asset.  Our people are…”, because you truly believe it and don’t need reminding, you’re in good company.  Six out of seven global business executives view talent as the leading contributor to their company’s profitability.  In their recent global survey of more than 5,800 business executives from 128 countries, McKinsey asked “How much does each of the following assets contribute to your company’s profits?”  The number one answer?  “Talent”, with 86% of respondents answering “moderately” or “substantially”.  This is doubly impressive in view of the fact that Talent came in ahead of “Brand” (74%) and “Intellectual Property” (55%).

However, notwithstanding the fundamental Profit – Talent connection, many U.S. employees are not feeling the consequences of being the most important asset.  In a recent survey of 225 U.S. middle managers, Accenture found a significant drop in their level of satisfaction with their own organization.  In 2004, two thirds of middle managers were extremely or very satisfied with their organizations.  This year?  Fewer than half are, 48%.

So what’s going on?  On the one hand executives say Talent’s important, but on the other hand, executives may not feel it.

We know there’s a fundamental connection between better talent and better performance.  And yet for many leaders, that knowledge is insufficient to drive their talent development decisions.  I’m reminded of a doctor I once knew, a radiologist who read and interpreted X-rays.  He also was a chronic smoker who ultimately died of lung cancer, a condition he diagnosed innumerable times.  The irony is tragic.  And although the issues facing our companies are not truly life and death, the consequences do have life-altering impact.  We know that talent affects corporate performance.  But does that knowledge make a difference in what we decide to do about talent?

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