PlusHR recently presented at this year’s annual CIPD HR Software Show on the subject of using performance management data to drive strategic decisions and company performance.
The Performance Management Presentation:
Insight from the Session
We opened our presentation by asking the audience how many of them spent time analysing employee performance data in their organisations. Out of 60 or so attendees, only one person raised their hand.
At a time where HR is expected to be ever more strategic and proactively contributing to business performance, such a result may come as a surprise. However, it does corroborate recent research by Deloitte that found that only 6% of HR departments believe they are ‘excellent’ in analytics and more than 60% feel that they are poor or behind.
So… What’s Next?
So, clearly HR departments have a long way to go before they are able to contribute useful performance analytics to the business in the way that many sales, marketing and finance functions do. However, I believe that the tide is starting to turn. During the software show I spoke to a large number of delegates on our stand and the most frequently asked question this year was ‘how easy is it to get data into and out of your system?’ This is a significant change from last year where questions were more focused around configurability of the user interface. So it is encouraging to see that HR professionals are increasingly becoming interested in how they can extract and analyse data from performance management systems, rather than concentrating on the look and feel of the system user interface.
Perhaps this is a consequence of a trend that we are seeing in the wider technology world. Increasingly, the web systems that we are using are moving away from user interfaces with charts, pictures and animations, to slimmed-down, functional screens that enable users to view more data on screen and easily digest and analyse it. Consider Google Drive, the office application suite offered by Google as a competitor to Microsoft. Icons and dashboards are nowhere in sight; rather Google has focused on providing fast and easy manipulation of data and documents.
Beyond HR Data – Combining Different Sources
Our discussions with delegates also found that where they are analysing employee performance data, they are limiting this analysis to just information that is available within human resources. However, real insight into employee performance comes when you combine HR data with data from other business functions. The table below provides examples of how employee performance data can be combined with other business data to help answer key strategic questions:
Combining employee performance data with other data sources:
|Combining with this data source||Helps answer these questions|
|Employee engagement||How engaged are your high performers?|
|Customer satisfaction||Does your line managers’ perception of high performance correlate with that of your customers?|
|Sales and finance||Are your teams with the highest-performance ratings those delivering the most bottom line profit?|
|Job board and applicant tracking||Which sources of recruitment yield the best-performing employees?|
|Twitter and LinkedIn||Is there a correlation between high performance and online networking and does the network sustain high performance?|
The Benefit of Online Performance Management
One of the biggest reasons why HR teams may be struggling to analyse employee performance data is because many are still operating paper-based performance processes. Indeed, most delegates who I spoke to at the HR Software Show were using paper-based performance appraisals. They told us that because of the time taken to manually compile data from appraisals, they were unable to do any analysis beyond calculating appraisal completion rates and compiling training and development needs.
So, there are clearly obstacles to be overcome before HR teams are able to answer strategic questions around employee performance. However, with the advent ofonline performance management systems, and increasingly powerful reporting capabilities within HR software, there is no question that HR will start to advocate analytics in the coming years, and performance data will become a valuable source of strategic business insight.