5 Ways to Undermine Your Performance Management Software

Pitfalls of Employee Performance Management Solutions

Employee performance management (EPM) technology offers great benefits in terms of consistency, fairness and timeliness, and data gathered from this process can further be used to enhance the richness of an organization's various HR strategies and programs. In fact, Towers Watson's Tom Keebler opines, "With talent management and compensation programs becoming so critical, organizations are turning more and more to technology to help them deliver these programs." A recent study by SuccessFactors and the Workforce Intelligence Institute (WII) concurred, finding that such technology can be used for hard, measurable business improvements and saying, "Generally speaking, companies with mature systems that they applied consistently across most of the organization financially outperformed those whose systems were not as robust." But the time spent selecting, implementing and embedding a cutting edge employee performance management software solution can go to waste. Aside from the usual HR technology project management and employee engagement issues there are other, more specific pitfalls for performance management software. Here are 5 ways in which an organization can unintentionally undermine their performance management software success.

Tactic # 1: Allow Quick Gains to Undermine Performance Software Strategy

With a performance management software implementation, it is often easier to focus on easing in the everyday changes for the majority – employees and line managers – but a fully-leveraged EPM system should also offer considerable strategic functionality. These benefits are key to engaging the support of senior decision-makers; strategize before implementing. The SuccessFactors and WII study found, "HR needs to obtain the backing of the C-level. This can best be accomplished by applying analytic tools and metrics in order to connect human capital software investments with financial outcomes." Since obviously this is no simple task, the HR function has to ramp up adoption of decision science and technology, because as the above mentioned study enumerates, "The days of management by intuition are gone forever". Performance management software offers a way for HR to provide credible, data-driven reporting and results at the strategic level.

Tactic #2: Assume Performance Management Software is a Panacea

Like any automated system, EPM is only as effective as the processes it automates. A 2011 Towers Watson report, Turning the Tables on Talent Management concluded, "A technology tool can remove paper, reduce cost and create efficiencies for HR – all great things. But technology solutions alone don't ensure that your practices, if simply automated, are going to be effective." As such, the introduction of a performance management system is a golden opportunity to review HR performance management best practices and procedures in light of the new software's capabilities. However, a warning: use the HR software to expand and improve processes but NOT to push them in directions that are not aligned with the business needs.

Tactic #3: Treat EPM Software as a Substitute for Training

Further to point #2, assuming that HR software can be a substitute for skilled managers is another sign of a poorly-planned implementation. The Towers Watson report elaborates: "A technology tool is not going to improve the effectiveness of managers who don't give good performance reviews, or of objectives that are not set with a clear line of sight to business imperatives." If anything, participants need to understand more than ever the wider performance management picture. EPM technology encourages the seamless integration of the performance review, the career conversation and the learning needs analysis. Furthermore, the results of that dialogue can then contribute to organisational talent reviews, hard-edged workforce planning and the implementation of reward strategies.

Tactic #4: Ignore the Rewards of Integrating Performance Management Technology

On the use of performance management data, the Gartner 2011 Magic Quadrant for Employee Performance Management Software shows a core trend around reporting and analysis with improved analytics being key to future evolution: "Many organizations only integrate overall performance ratings from the performance appraisal with compensation management. However, those organizations are missing out on the opportunity to directly tie rewards to goal achievement. As organizations more finely tune their pay-for-performance programs over time, we expect to see more and more granular integration between performance and compensation management." Good EPM enables multi-directional integration in all senses: network, data, procedural, and strategy.

Tactic #5: Choose the Wrong Vendor for Your EPM Software

The right vision, right people and right software product can still fail to realize full EPM potential if the vendor is not a good fit. Towers Watson suggests a four-point checklist for performance management vendor selection:

• Does the vendor's business plan align with the growth and focus goals of your organization?
• Is the software vendor financially viable for the long term?
• Will the vendor configure the tool to set up the right processes? (And will configuration by your own HR power users even be possible?)
• Can the vendor provide knowledge of and experience with your industry (local and global) and, enough understanding of HR to help you avoid missteps?

The Bottom Line for Performance Management Software Automation

In 2011, the HR Services Delivery & Technology report, New Horizons, No Boundaries found that implementing/improving talent and performance management systems was the number one service delivery issue. Gartner's Magic Quadrant found that the most popular motivations for purchasing EPM were: automation of processes, improvement of pay-performance linkages, next-generation leadership development, and to boost employee retention and engagement. Whatever the reason, there's no doubt that EPM offers huge benefits to the organization that can sidestep the above 'undermining tactics'.

  Categories: Employee Performance Management Software

  Tags: Performance Management Software

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 Author: Micah Fairchild

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