In the HR world, we regularly hear buzzwords describing the next important trend.  One such trend is “future proofing”.  But this isn’t just a buzzword; it’s a critical step CHROs and HR leaders should be taking to position HR as a long-term strategic partner to their business.  In today’s digital workplace, organizations large and small have to be nimble, strategic and armed with the most qualified talent.  So, how do you “future proof” HR? We believe you start with the backbone of HR and one of the most debated topics these days: performance management.

It’s no surprise that performance management is the first thing to address when it comes to future proofing HR.  It drives employee engagement, retention and turnover, and can impact the bottom line. But the debate around performance management is no longer focused on why we do it—the debate is really centered around the “how”.  How do you create a performance management process that positions your workforce to be the best it can be, that helps employees feel connected and engaged, grows skills and capabilities and enables an organization to use talent as their competitive advantage?  The “right” approach is the one that takes performance management fundamentals and tailors that process to fit your own culture and strategic priorities.  Ultimately, it should enable HR staff and employees alike with the tools to effectively participate and own their own performance.  In other words, it isn’t a one-size-fits-all approach.

We think it comes down to this:  tightly aligning your performance management process to your business strategy and culture, and then enabling it with modern, integrated and streamlined technology.  We know that performance management is the foundation for integrating HR strategies including onboarding, compensation, career development, learning and succession.  We also know that complex processes, mountains of paperwork, and the perception of performance management as administrative hinders HR from moving forward and future proofing their important place in an organization.

SAP SuccessFactors conducted a micro survey on “Performance Management in a Digital Workforce”.  We went straight to our clients and asked them to assess the current state, importance and future of performance management in their organization.  Survey participants included leaders from over 75 SAP SuccessFactors clients from North America, spanning across 21 industries and representing leadership, business and IT functional areas.  The survey shed some additional light on what today’s employees and managers are thinking about performance management, including the following:

  • Performance management’s still got it.  We heard that performance management is still a high priority in organizations.  And, aligning business priorities with employee goals is the most important driver of performance management.  However, there is a gap that exists between the importance of it, and the actual adoption of it.  So, we see there is significant opportunity for organizations to align their performance management processes to their business goals, and then enable the process with simple, integrated technology that promotes adoption and engagement.
  • We love ratings…we love them not.  HR leaders are divided about whether performance management ratings should stay or go.  We often see those who are considering eliminating performance ratings feel it is too complex a process to tackle.  Those who want them to stay in the absence of any clear business reason to have them may be too married to an antiquated process they can’t imagine changing.  Whether your organization will use performance ratings or not, your process will not stand the test of time if it isn’t aligned to your business strategy and culture, and supported by streamlined technology that enables engagement, efficiency and productivity.
  • We need a contingency plan.  An organization’s utilization of a contingent workforce is here to stay. And, the desire for managers and employees to tackle HR activities anywhere is critical.  These things allow a company to respond quickly to changing business demand and stay flexible.  An integrated performance management process and system will be required for mobility to be successful, as well as for an organization to effectively leverage a contingent workforce. This encompasses the inclusion of contingent workers in performance management, as well as enabling all employees to conduct performance management activities from the field, all enabling efficiency and productivity.

All in all, our survey reinforced what we at SAP SuccessFactors strongly believe in and promote to our clients. Focus on the HOW, not the why; and, one size does not fit all.  The work to do around performance management should be future proofing for YOUR organization. We know it’s important and critical, but how it is executed will make or break an HR strategy.  Put the work into aligning your HR strategy to your business priorities, your culture, and leverage integrated and modern technology to gain adoption and engagement around the process.

To learn more about the “Performance Management in a Digital Workplace” micro survey and see additional findings, please visit: Click Here

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