Ultimate
Guide
to
PERFORMANCE
Annual Reviews Are So Last Year
Aligning employee performance with the organizations goals is a common aspiration. To that end, organizations apply a range
of techniques to assess employees contributions and establish plans to develop talent. For most companies, the traditional
annual performance review is still the central event for assessment and setting development goals. Its an age-old tradition,
but its time may be up. Many organizations find diminishing value in this once-a-year approach. Why?
Organizations need agility
to quickly apply their
talent where needed to
stay competitive and seize
opportunities
>
Emerging talent,
especially Millennials, want
to work in collaborative
environments where
transparency and ongoing
performance feedback
are the norm
>
Managers need timely
information to improve
business results
To meet these requirements, companies today are re-thinking performance
management. Theyre approaching it as a strategic business process in which
employees are regularly evaluated, coached, and motivated to excel.
This guide will put you on the path toward highly effective performance
management with information on:
Essential
components of performance management
How
to measure ROI and lead the business value discussion
Tips
to improve existing programs
Ways
companies have transformed their performance management
and achieved real business value
Top 5 Essentials of
Performance Management
Successful performance management includes these essentials:
1.
A well-rounded plan tied to business goals
2.
Knowing your starting point
3.
Connect performance and learning
4.
Effective technology
5.
Actionable Data
Ultimate Guide to Performance
>
Employees want timely
feedback and coaching to
enable career growth
FAST FACT:
Employees and managers
today want real-time,
feedback-based solutions,
coaching, development, and
more agile approaches to
goal management.
Essential #1: A Well-Rounded Plan
Tied to Business Goals
Each organization has its own approach and requirements for
strategic planning. But regardless of the planning template,
your plan will be most effective if it addresses these five
dimensions of successful performance management:
Identifying
talent/skill gaps and improvement
opportunities all targeting business goals
Creating
a performance culture
Motivating
employees
Improving
collaboration and socializing employee
development throughout the company
Identifying
who your next leaders will be and preparing
for executive succession planning
Essential #2: Know
Your Starting Point
A highly effective performance management program zeros
in on identifying and growing critical skills. To pinpoint whats
needed, a talent audit is a great place to start. By using the
4-step process outlined below, you can bring visibility to
talent strengths and risks:
1.
Set objectives based on business needs and current
bench strength (tip: no more than 3)
2.
Formally assess your organizations talent and create a
gap analysis
3.
Hold talent review meetings with each business group
discuss strengths, needs, and career paths (tip: use a
checklist)
4.
Take action with specific plans, frequent communication,
and follow-up
To learn more about the full audit process, check out
SilkRoads ebook: 4 Steps to Strengthen Your Talent Pipeline
available at SilkRoad.com.
SilkRoad.com
Essential #3: Connect
Performance and Learning
Managers often face an age-old challenge the disconnect between performance
appraisal and the learning process. The appraisal reveals the employees abilities or
skills deficit. Training is requested and completed, but performance doesnt really
change or is never calibrated to the new skill level achieved.
How can HR bridge this disconnect and improve employee performance? Try
these techniques that talent-driven companies like Google use to make employee
development more effective:
Separate the Conversations even a positive appraisal can get emotional and
distract the development conversation. Uncoupling the appraisal and development
discussions can make them equally meaningful.
Segment Employees seasoned, steady employees dont need the same
development approach as rapidly rising stars. By segmenting employees into
groups, you can use the appropriate development approach for each.
Introduce a Learning Toolkit managers often dont know all the learning
techniques available to make formal training more effective. Educating (and
reminding) managers about the toolkit of available training options can make
their jobs easier, and help them become more effective leaders.
Essential #4: Effective Technology
We used to do these rankings manually or with
spreadsheets and data points pulled from disparate
systems. Now technology makes it possible to simplify
this process with one source of information. New research
shows that this information should be shared with people
and that individuals should get direct feedback more often
on their performance.
A new breed of performance management technology
includes features that facilitate the regular process
of performance analysis, assessment, coaching, and
communications to generate bottom-line business results
for the company and give employees the career growth
and development they crave.
Essential #5: Actionable Data
The topic of HR metrics, especially around performance
information, can raise a good deal of well-founded angst.
Gathering metrics across the organization challenges even
the best HR teams. To provide metrics that matter
actionable data that leads to better results the right
technology goes a long way. Standardized reports and the
ability to link data to other systems can help. But before you
Ultimate Guide to Performance
start, think about what questions you and your executive
teams want answered around performance questions.
Uncover
Set
the real business questions being asked
realistic expectations
Demonstrate
the need for effective tools to measure ROI
Measurable ROI
Effective performance management provides business value in several ways cost savings, bottom line results,
plus a range of intangible benefits.
Calculate the Cost Savings:
You can easily demonstrate the potential cost savings available from an employee performance management (EPM)
automation solution:
Hours saved
per employee
Average
employee cost
per hour
Amount saved
with an EPM
Example: An organization has 1,000 employees and saves a total 2 hours per employee. If the average labor cost is
$20/hour, the company is saving $40,000 per year with the EPM.
Better Development,
Better Bottom Line
Research from Bersin by Delloitte
shows that, of all the practices to
consider in performance management,
development planning is among the
most important. They found that
integrating learning & development
with performance management makes
an organization:
3x
more likely to report good
employee results
55x
more likely to report strong
overall talent management results
100x
more likely to report strong
business results
ROI from Intangibles
Aside from the financial and productivity
results that can be expected from
performance management technology,
its important to also consider some less
tangible benefits they provide, such as:
Access
to key information
Increased
legal compliance
360-degree
feedback across the
organization
Review
cycles can be aligned
however your organization sees fit
Visibility
to performance and goals
increases accountability across the
board
Motivation
and engagement will be
positively affected
Business
strategy and goals are
aligned with individual goals and
performance
You
can realize a true pay-forperformance culture
Succession
planning is easier and
more efficient
Collaboration
and socialization
across employees and managers
is increased
Incorporating
training plans to
help employees reach goals will
increase retention
For tips on getting the business value/
ROI discussion started with company
leaders, see Appendix I.
Career
paths are clear to individuals
and the business
SilkRoad.com
Improving Performance Management
Dont Think Outside the Box Make the Box Better
Generally people find it very difficult to adopt a radical new point of view. If you
want to take your organizations performance management to the next level, you
may get more support and cooperation if you focus first on incremental changes
using technology or other techniques to improve the current process, rather than
throwing everything out and starting over.
FAST FACTS:
3 Keys for a High Performance Culture for Employees
Research shows that companies with the highest employee engagement scores
deliver operating margins 170% above organizations with low engagement
rankings. If you want to boost engagement, recent SilkRoad research can show
you where to focus your efforts. The research shows that 3 key issues impact
engagement and motivation of top performing employees.
What Employees Really Want trust in management (56%) ranked
highest for fostering engagement
Generational Differences few organizations (10%) differentiate
engagement by generations, which is key to attracting new talent, especially
Millennials
Roadblocks and Buy-In nearly half (46%) of organizations lack explicit
programs for employee engagement and struggle with executive buy-in for
formal programs
SilkRoads ebook: Creating a High-Performance Work Environment offers
a deeper look at this important issue with benchmarks, practical ideas, and
more download from SilkRoad.com.
Ultimate Guide to Performance
56%
10%
46%
ranked trust in
management highest for
fostering engagement
of organizations differentiate
engagement by generations,
which is key to attracting new
talent, especially Millennials
of organizations lack explicit
programs for employee
engagement and struggle
with executive buy-in for
formal programs
Managers Checklist for Linking Motivation to Performance
MYou improve performance by working with what motivates your employees to do their best and
eliminating obstacles that keep your employees from experiencing higher levels of job satisfaction.
MBe specific with your employees about whats meant by performance. They need to know whats
expected of them, whats considered unacceptable, and what it might take for them to reach the
standards of performance that you and your employees set together.
MYour expectations affect the behavior of your employees. If you expect better performance and trust
employees to deliver, youre likely to get it.
MCreate an environment that encourages and supports higher levels of performance. Be specific in setting
your objectives, try to stimulate and challenge your employees, provide the resources they need, and
show how much you appreciate and respect them.
MCheck out SimpleTruths.com for affordable books and videos that build teams and motivate employees
to greater success and fulfillment.
MShare the rewards of success but remember that the best motivation is intrinsic.
MEmployees who find satisfaction in doing their jobs will usually try to perform better.
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Case Studies
These organizations took performance management to the next level
and improved business results:
Kearney & Company
Virginia-based Kearney & Company is ranked Best Place to Work by
multiple business publications. Maintaining that competitive hiring edge
while growing from 100 to more than 450 employees hasnt been easy.
One challenge: Establishing a consistent and organized performance
management process. With SilkRoad Performance, the company gained:
A
more consistent and meaningful performance review process six
month, yearly, and post-engagement performance reviews
Better
goal tracking employees can easily monitor their own progress
Stronger
employee engagement with mobile features that improve
performance management connections between supervisors and the
many employees who work off-site at client locations
and
much more
SilkRoad Performance supports Kearney & Companys culture of excellence,
fostering professionalism in the workforce and exceeding the expectations
of managers and employees alike.
Ultimate Guide to Performance
We are a professional
services firm in a competitive
market, and we must
hire the very best talent.
Our consistent, equitable
appraisal process through
SilkRoad Performance gives
candidates confidence
that Kearney is the right
choice for them.
Erin Ogburn, Director of Human Resources
San Diego County Regional Airport Authority
To help meet the goal of a productive and motivated workforce, the San
Diego County Regional Airport Authority sought an automated performance
management solution that would:
Decrease
managerial time spent preparing performance reviews, allowing
more time for planning and coaching
Supply
real-time employee performance data for analysis
Increase
the number of on-time performance reviews
The Airport Authority achieved those goals and more with SilkRoad Performance:
Cost
reduction over $34,000 saved
SilkRoad Performance
has reduced our
managerial cycle time for
appraisals by 50 percent.
Time
savings managers spend 50% less time
on appraisals
Analytics
real-time data now available to measure employee performance
On-time
performance reviews increased from
80% to 98%
SilkRoad Performance helped the Airport Authority re-engineer its performance
management workflow process to shorten appraisal cycle times, cut costs, and
improve productivity.
SilkRoad.com
Get the Most from Talent
To remain competitive, an organization today must get the best possible performance
from talent. Annual performance reviews are no longer the answer. Smart organizations
view ongoing performance management as an essential for driving business success.
By providing leadership to institute effective performance management, you can help
your organization:
10
Improve agility and competitiveness
Strengthen employee development, productivity, and retention
Improve succession planning
and more
Ultimate Guide to Performance
APPENDIX
Cost per Hire National Averages
HR can demonstrate its business-results focus by taking the lead in
a performance management ROI discussion. Here are three areas
where you can start that ROI discussion.
1)
Time savings and focus This is the easiest place to start.
If the organization has adopted performance management
technology, value can be calculated based on time saved. But
theres another facet to the time-saved discussion, and its
important. Point out how managers and employees saved time
can be shifted to specific key projects that provide competitive
differentiation or other strategic benefits.
2) Turnover It can cost twice an employees salary for a
replacement. Using your organizations turnover data, you
can show how even small turnover reductions can deliver
measurable savings.
3)
Productivity While the focus often is on improving worker
productivity, performance management also provides
techniques and tools to make managers more productive
driving better business results through improved
communications, coaching, and data analytics.
Learn more about the ROI of an Employee Performance
Management Solution [NOTE: link to Calculating the ROI of an Employee
Performance Management Solution]
Performance Management Software Suite
Features Checklist
Every Performance Management software demo will be a little
different. Regardless of the path the salesperson or solution expert
takes, make sure the system you select makes you feel confident
about these critical areas of a performance management solution:
Appraisals
M Provides complete support for managing the performance
process, including appraisals, 360 degree feedback,
compensation, goal management, competencies and
development planning.
M The system is proactive, giving administrators the ability
to automate the launch of the appraisal process and notify
employees based on trigger dates we set.
M Employees can see their historical performance information at
review time (previous appraisal results, development activities,
journal entries, etc.)
M Its easy to create multiple different appraisal forms
in the system.
Assessments
M The system supports the use of 360 degree, multi-rater,
self/manager and peer assessments. An unlimited number
of assessments can be created.
M A robust library of competencies is available, in addition to the
ability to import our own competencies.
Other Functionality
M The solution supports individual development planning,
which can be self-created or auto-created at the end of the
assessment period.
M Succession planning functionality is available including talent
search support (advanced search and 9-box), reporting and
holistic views of all potential candidates.
M Compensation allocation such as merit increases, bonus, and
equity pools, is supported.
Administration
M The system can allow the addition of custom attributes and
report on them.
M Easy to use from both the administrative and employee
perspective, and we feel confident we can manage the system
on our own.
M Robust functionality exists for what we need now, but theres
still plenty of room for growth with this vendor.
M Powerful reporting is available through standard reports,
including the ability to export reports to Excel or PDF.
Technology
M The vendor answered all questions with regard to the Softwareas-a-Service [SaaS] cloud-based software model and described
the benefits to my organization.
M I feel confident that this vendor will keep me ahead of my
competitors by keeping its eye on talent management trends
related to a mobile and social workforce, and by providing a
solution that reduces costs, saves time and resources, and
develops a more engaged workforce.
M All performance management functionality (appraisals,
assessments, compensation, succession planning, goal
management, etc.) is offered in one solution, without modules
and regardless of the size of our company.
Its easy to create different appraisal workflow processes for
different groups.
Goals
M The solution allows employees to add goals or accept goals set
by their manager. Goals can be easily modified when necessary.
The system also allows for goals to be weighed.
M Department level goals can be cascaded to selected team
members.
M The system enforces the creation and management of
S.M.A.R.T. goals.
SilkRoad.com
11
Clear Rewards, High Stakes
The rewards of effective recruiting are clear.
It brings top talent into your organization to
drive business success.
At the same time, the stakes are high.
Current data shows that companies can
spend $4,000 on average to recruit a new
hire (see Appendix I). If an employee jumps
ship, the turnover and total replacement
costs have been estimated to run as high
as 150 times annual salary for specialized
senior level positions.
As the economy improves, competition
for the best candidates will continue to
increase. But with the right recruiting
strategies and tools, you can:
Attract more top-choice
candidates
When competing for quality candidates,
an attractive career opportunity is only
part of the picture. A cohesive, efficient
recruiting process helps create a positive
first impression to engage top talent and
differentiate the organization.
Improve fit
These days, find qualified candidates may
be easy, but finding people who truly fit
can be a lot tougher. With the right mix of
strategy, tools, and processes, youll more
consistently acquire best-fit talent.
Reduce time-to-hire
Each step in the recruiting process takes
time. Data from your organizations
applicant tracking system (ATS) can help
you identify process bottlenecks and
reduce the time-to-hire.
Work more effectively as
an HR team
Effective sharing of information and
communications within the HR team
and with hiring managers can result in
better candidate/job matching, process
streamlining, and reporting that clarifies
the HRs contributions to business success.
Automation can have a big impact in all
these areas.
MEAN REPLACEMENT COSTS (PER RECRUIT)
Blue Collar
Professional
All Workers
SilkRoad is a leading global provider of cloud-based, end-to-end talent management solutions that enable customers to find, attract, develop, and retain the best talent. The
award-winning SilkRoad Life Suite includes Talent Acquisition, Talent Development, and HRMS solutions that are delivered through a tablet-friendly Talent Portal. The suite is
0 platform to rapidly2000
4000and business performance.
6000
8000
easy to deploy and use a single
boost employee engagement
Visit www.silkroad.com,
follow on10,000
Twitter @SilkRoadTweets or
call 866-329-3363 (U.S. toll free) or +1-312-574-3700.
Copyright 2015 SilkRoad Technology, Inc.
