Over the past two to three years, web-based performance management has moved from being a leading-edge solution adopted by only large companies to a mainstream solution that is quickly becoming an industry standard among medium and small organizations.
The true value in automating performance management goes beyond simply automating time-consuming, tedious tasks such as tracking down paper-based appraisal forms. While performance management systems have been proven to save HR professionals both time and money, they ultimately improve the overall performance management process.
Web-based solutions traditionally deliver higher completion rates, which can dramatically increase the value of performance management within organizations of all sizes. Performance management systems provide employees with a clear development path and a better understanding of how their goals are aligned with those of the organization, which in turn increases their support of the process. Managers have the information they need to ensure development plans are relevant and executed. Executives have a clear picture of the organization’s talent strategy and how it ties into the bottom line.
The increased demand for, and popularity of, web-based performance management solutions, means prices have dropped dramatically. Even small organizations can reap the benefits of an enterprise-class solution without the high price tag often associated with many human capital management systems.
With the move into the mainstream, performance management has come to encompass much more than just appraisals. A major trend in performance management is that while employee appraisals are the heart of performance management, organizations are now integrating a number of closely related functions including compensation, succession planning and goal management into the performance management process. This holistic approach enables HR professionals to spend time on what matters, managing talent and supporting strategic goals.
A strategic view
In a highly competitive knowledge-based economy, performance management is taking its place in boardrooms across the country. Faced with pressures including the aging workforce and skills shortage, executives are becoming more involved in the performance management process as they realize that well-executed performance management strategies can help them get better results for the company.
Most web-based performance management systems provide advanced reporting capabilities, which allow managers to easily track the status of performance management initiatives. Goal management functions enable organizations to link individual goals to strategic corporate goals, meaning executives have insight into the progress being made on corporate objectives. Succession planning tools provide executives with a clear plan to build a talent pool to meet the organization’s business needs and address potential attrition.
An early adopter of web-based performance management, the San Diego Zoo, has realized many benefits of streamlining its processes while elevating the role of HR within the organization. In 2005, the California zoo implemented a new web-based employee performance and talent management system in an effort to improve employee accountability across the organization.
With the new system in place, the zoo boosted the completion rate of appraisals from 50 to 100 per cent, and employees now know what is expected of them. Additionally, all employees now have a clear connection between the objectives set for them and overall objectives of the organization, and an understanding of how their personal achievements impact the organization’s success.
Since the successful rollout of the solution, the organization’s 17-person executive team, which includes Tim Mulligan, the zoo’s director of HR, has embraced the new solution. Mulligan and his team have received high praise from the zoo’s board of trustees and, more importantly, recognition of the importance of performance management to the zoo’s ongoing success.
Not one size fits all
Traditionally, human resource management systems have been inflexible and required significant, often costly, modifications to meet organizations’ needs. With the maturing of the market, flexible web-based performance management systems that enable organizations to configure the solution without vendor or IT involvement are becoming more common.
Usually organizations move from a paper-based performance management system where forms had a corporate look and feel, unique steps have been built and a variety of forms exist for many different job functions. In moving to a new system, organizations want to retain the best practices they have developed and mirror parts of the old process to increase acceptance of the new solution.
More and more vertical specific performance management solutions are being offered to address the needs of specialized industries such as health care, financial services and other professional services. Vertical solutions give organizations the benefit of a system designed to address unique process and business requirements in various industries, including accreditation or compliance requirements. In the financial services market, there are a number of industry-specific factors that impact performance management, and solutions built for this industry include features to address distributed offices, compliance and regulatory issues and specific competencies.
In a relatively short period of time, employee performance management has undergone a rapid evolution with the development of powerful, web-based tools. HR professionals are no longer mired in paperwork and other mundane administrative tasks. They have more time to focus on meeting strategic objectives, better tools to implement best practices programs and access to critical workforce metrics they can share with their executive team.
Paul Loucks is president of Halogen Software, a provider of employee performance and talent management solutions based in Ottawa. He can be reached at (613) 270-1011 ext. 254.