The world economy is going through a seismic shift and combined with the changing pace of business, it is leading to changes in the way people are managed. For Peter McHugh, CEO & Founder, Covalent Software, the answer is in the right technology and how it is used.
Today, the Boardroom and HR functions are so closely linked, as HR issues increasingly gaining Board-level awareness. As businesses become increasingly global and virtual, the challenge that HR faces to engage the diverse workforce and align them to strategic business objectives is growing.
People management now needs to be about more than the necessary administrative functions of payroll, time and attendance records and job applications. Organisations need the right tools to help identify, develop and retain the right talent, and translate data into knowledge to help formulate effective business strategies, providing tangible benefits across the company. Realising these needs, HR managers must embrace new software and make it an essential part of their daily operations to help carry out effective employee management and help influence operational performance.
It goes without saying that employees are what sets a business apart from its competitors and therefore it’s important to ensure they are continually engaged and motivated through effective performance management. Whilst businesses recognise the importance of managing employee performance effectively and its ability to help drive organisational improvements, often the software solutions in which they have invested fall short of their expectations. Too often they are faced with a simple HR data capture or document management system that provides little added value beyond standard administration. Others find that employee appraisals can be carried out online but the software provides no investigation capabilities and so the information must be extracted and analysed externally. In the worst case scenario, too complex a system simply leads to the software being abandoned as HR reverts back to its familiar paper-based appraisals process.
As budgets remain tight, investment in the right employee performance management (EPM) solution, to supplement a standard HR data management tool, is a decision no business takes lightly. With organisations preparing for growth in the upturn, any investment in software must be ready to support the business beyond its current operational level, creating value as the company grows. Therefore, before an organisation invests it needs to clearly identify the benefits it anticipates to receive from the technology. This means understanding how the data and insight can support the employee, manager, department and organisation as a whole. By clearly identifying these outcomes, it will provide clear measurable objects that can then be used to measure the return on investment (ROI).
So how can businesses ensure they’re choosing the right software for effective performance management? Many organisations in the public sector have already effectively implemented a performance management solution and the private sector can learn a lot from their approach. With the right EPM software, the whole appraisals process can be streamlined to save time and resources traditionally associated with the annual burst of appraisals activity. Managing multiple appraisers is simplified, and it becomes easy to consolidate and analyse results, identify both poor performance and key talent, and take fast corrective action on skill gaps. And, of course, when managers save time dealing with problem staff they have the capacity to work on developing the solid performers for future growth, and building the business.
Managers also need to ensure that employees are engaged in performance reviews in order to develop talent and improve productivity. Investing in a system that makes it easy for individuals to dynamically track their own progress helps to engage them in their personal development, making the appraisals process worthwhile. EPM software is a valuable asset to the company when it not only enables HR to manage the whole appraisals process effectively online but also informs strategic decision-making at Board level. Managers should be able to obtain a clear, organisation-wide assessment of employees’ current performance and manage competency gaps.
And performance management software really pays dividends when employee goals can be assessed and aligned with corporate objectives and linked to business plans, key performance indicators and risk assessments. HR can ensure that every employee is working towards organisational improvement, making operations more strategic across the business. The real value of technology in HR is not about cutting costs, but driving performance and contributing to business strategy and success. Although the initial investment can be daunting, if the right solution is selected it will pay for itself in the long term by turning a software tool into a strategic business advantage, and making HR an invaluable part of the Boardroom agenda.