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Shifting Away From Annual Performance Reviews to Increase Productivity and Engagement

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Shifting Away From Annual Performance Reviews to Increase Productivity and Engagement

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Discover how shifting away from annual performance reviews can boost employee engagement and productivity within your organisation.

Presented by Geoffroy de Lestrange, Product Marketing Manager, EMEA Cornerstone

Discover how shifting away from annual performance reviews can boost employee engagement and productivity within your organisation.

Presented by Geoffroy de Lestrange, Product Marketing Manager, EMEA Cornerstone

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Shifting Away From Annual Performance Reviews to Increase Productivity and Engagement

  1. 1. Shifting Away from Annual Performance Reviews Increase Productivity and Engagement' Geoffroy de Lestrange, EMEA Product Marketing Manager @csodemea
  2. 2. 2Note: User and client count figures exclude Growth Edition and Cornerstone for Salesforce. CLIENTS 2,805 USERS 27.7M COUNTRIES 191 LANGUAGES 42 OFFICES 19 San Francisco Santa Monica Sunnyvale Sao Paulo Madrid Paris London Amsterdam Stockholm Dusseldorf Munich Tel Aviv Bangalore Mumbai Hong Kong Tokyo Sydney Auckland Who we are As of September 30, 2016 New Delhi
  3. 3. IDC Consulting Copyright 20163 Key Takeaways Flexible working has a direct impact on employee engagement The employee performance review is not dead It needs to be justified by useful outcome for both company and employee Collaboration has a significant impact on financial performance HR must sell itself better to its internal customers in line of business functions
  4. 4. 13% of workers feel passionate about their work (Deloitte) 53% of employees say reviews don’t motivate them to work harder (Globoforce)
  5. 5. Shiny happy people? Source: IDC, Cornerstone OnDemand HR- LOB Survey, March 2016 71%
  6. 6. Flexibility, a worthwhile investment 6 Correlation between happiness and flexibility measures Source: IDC, Cornerstone OnDemand HR-LOB Survey, March 2016
  7. 7. Impact on performance management
  8. 8. IDC Consulting Copyright 2016 What are we talking about?
  9. 9. The work environment is changing Once upon a time… Nowadays…
  10. 10. HR is materially changing as a result 10 FROM A FOCUS ON PROCESS AND AUTOMATION… … TO A FOCUS ON BUSINESS IMPACT AND ENGAGEMENT
  11. 11. Old reviews are disappearing
  12. 12. credit attribution:paul prescott / Shutterstock.com What’s the target • Know your employees’ skills • Ensure that the right person is at the right position with the right skills at the right moment • Develop your employees’ strengths • Plan for workforce and succession
  13. 13. HR closer to the business
  14. 14. Perception of HR support of the business UK: 53% UK: 43% UK: 38% UK: 24%
  15. 15. Employees now truly at the centre
  16. 16. Don’t mix up everything! Oldperformancereview Ongoing performance review Talent & development review Compensation review
  17. 17. Performance reviews evolving 17 Source: IDC, Cornerstone OnDemand HR-LOB Survey, March 2016 Frequency of reviews in Europe UK: 30% UK: 22% UK: 50%
  18. 18. Flexible performance management Social recognition Highlighting best colleagues Observation checklist Realtime feedback Goal setting Badges Coaching Development Awards Social sharing Skills matrix
  19. 19. Collaboration and growth are correlated Source: IDC, Cornerstone OnDemand HR-LOB Survey, March 2016 Higher proportion of high-growth organisations in respondents with stronger collaboration incentives
  20. 20. Fair analysis • Performance compared to target objectives (“SMART” goals) • Performance variation from one year to the next • Performance variation following talent management measures (e.g. training, development plan…) • Performance compared to target positions
  21. 21. Real-life evaluation Observe, record, and assess skills in the field to determine employee competency
  22. 22. Source: Gallup; Employees Want More From Managers, 4/2015 The relationship between the Employee and their Direct Supervisor is the #1 driver to employee engagement Managers account for up to 70%of variance in employee engagement. Manager’s Impact on Engagement
  23. 23. Necessity of HR/Business alignment 23 HR areas of improvement in Europe Source: IDC, Cornerstone OnDemand HR-LOB Survey, March 2016 RH LOB
  24. 24. A pragmatic business- driven approach
  25. 25. Use the power of analytics REPORT Standard & custom reports embedded in talent platform Reporting PLAN Big data solution for workforce planning Workforce Planning PREDICT Predictive, prescriptive analytics for managing talent decisions Insight - Predictive analytics DISCOVER Highly visual & interactive dashboards to easily slice & dice talent data View - Business Intelligence
  26. 26. 26 Benefits Payroll TalentHRISHRIS Time & Attendance Talent HRIS HRIS HRIS HRIS HRIS HRIS HRIS HRIS HRIS HRIS Old days…. Operational Today… Business Driven 2000 2015+
  27. 27. Conclusion
  28. 28. 5 Key Drivers for HR Impact Source(s): 1. Bersin, Rethinking L&D, Learning Trends, 2015 Enable talent mobility & create leaders at all levels MOBILITY Build a culture of passion and purpose CULTURE Develop deep partnership with the business to set the right priorities and adapt rapidly BUSINESS Connect the distributed workforce, enhance collaboration and support innovation CONNECT Drive engagement, offering flexibility and development opportunity ENGAGE
  29. 29. Small business or Enterprise, discover your Cornerstone Performance solution on booth E30

Notas del editor

  • Situation can vary a lot from one country to another: a 2014 survey from Cornerstone on internal recruitment showed that retention was an important target for 35% of French HR, compared to 79% in Germany and 60% in the UK
  • Note that this map shows how HR and line managers FEEL: would they both say they’re proud to work for their company AND recommend it?
  • The impact of Flexible Working on Happiness is calculated by comparing the percentage of respondents per flexible working variable among "Happy" respondents to that of non-happy respondents.  For example, if the “Happy” respondent group had say home working adoption of 99% and “Unhappy” has home working adoption 90% - then we would state a happiness impact of 10% (99% / 90%).

    Technology is quite important for the happiness of employees.

    (Note: mobility as nr.1 criteria had already been analysed in a 2014 Cornerstone European survey on internal recruitment)
  • How can you answer questions about performance, behaviour, attitude, motivation… with simple grades (1 to 5, bad-average-good-very good and equivalent)?

  • The 2nd reality is that the World of Work is changing
    It’s undeniable…
    The image only shows a subset of the concept; but it’s much more
    Number of factors
    Generations, consumer experience, globalisation, speed at which everything is evolving
    Demand (and need) for Flexibility
    Work from everywhere
    It’s true across all industries (although different for blue collars vs white collars), companies of all sizes (e.g. plants with robotics, etc)
    Collaboration becoming increaingly prevalent ;
    Example in learning where learners become contributors


    Geoffroy
    Digitalisation also comes with ease of use (consumerization), transparency (e.g. Glassdoor) and a new form of relationship between people (more trust, more respect for privacy, more emphasis on fairness…)
  • In large part as a result of those realities, we see a massive shift in the focus of HR
    Not long ago, we could meet HRDs very focused on detailed, « perfect » processes,
    Now HRDs are focused on the employee and manager experience ; they will willingly compromise on process perfection to ensure the experience is right, and makes sense for each employee and manager

    HR still needs to ensure that the admin processes do work seamlessly (and line managers expect a lean HR as shown in the survey), yet talent processes have a much stronger short term impact on the business than any admin task!
    In addition, HR’s role in the long term is to secure the durability of the company and its culture via strategic talent planning: “From process-driven HR to business impact-driven HR” (David Wilson, Fosway)
  • Fact is that everyone finds current performance reviews boring and useless. Many people are still condemned to the spreadsheet nightmare, with standard questions for different people and roles, which is like comparing apples and oranges.
    This is why companies such as Accenture, Deloitte and others are ditching old-fashioned performance reviews

    In addition, yearly reviews usually consist in telling the employee: “you have this raise and that bonus, thanks and well done!”
    There is no real discussion about developments, skills, result-driven feedback…
  • Short term: be able to identify strengths and weaknesses, to leverage the former and correct the latter
    Long term: plan for future developments and anticipate attrition
  • In this context, HR needs to be ever closer to the business
    Many want to, but struggle to find how
    One needs to put themselves in the shows of a line manager, of a Director, of an exec
    Very high expectation from line managers
    HR needs to be involved in staff meetings, to understand what’s at stake, where they can have the business impact
    As a proofpoint: we see much more senior HR profiles coming from outside the HR function now


    Geoffroy
    The fact that filling talent gap (via recruitment or training) is the most important concern for line managers (next to Lean HR) is also a « low hanging fruit » for HR as they can show their usefulness with efficient talent management. This should help creating a new trust and dialog between HR and LoB, in which HR could explain the impact of what they do in terms of planning (next slide)
  • Employee engagement (and happiness!) is now a true priority!
    Top execs understand engagement is critical for their success (one can use the analogy of sports)
    It’s a two-way street
    The company meets the demands of the employee for a more modern workstyle, more flexibility
    However the employee is also more involved on many fronts; with self-service on many fronts, but also increased responsibility h
    Utlimately, the employee is happy and the company more efficient, it’s a win-win
    Bersin : treat your employees as customers and consumers
    Impact
    Impact of referal on recruitment
    A Study : Engaged employees have 60% less missing days (absenteism), and are 75% more loyal (75% less likely to leave the company)
    Contrast this with demotivated employees
  • Former yearly performance reviews were not efficient because they mixed 3 different sorts of discussion:
    Performance review (which should happen on a regular, project-based basis)
    Compensation review (which should happen at least yearly)
    Talent & development review (which should happen more than once a year)
  • In 2015, the disappearance of performance reviews was in all headlines but this survey shows this was strongly exaggerated, as they remain more popular than ever. On the other hand, reviews are changing because they become more frequent, and more targeted (performance, development and compensation are different conversations).

    This is a trend we observe at our clients’ sites all over Europe, with the development of social feedback, self-evaluation, observation-based review
  • the death of performance appraisal” made highlight recently, but the IDC/CSOD survey shows it is far from being the case: both HR and LoB appreciate their usefulness
    On the other hand, the concept evolves, as topics are discussed separately: performance, skills development, compensation
    The IDC survey shows that the frequencies are different, and changing

    HR teams should go ahead and pilot for specific populations key intiatives that can truly impact employee engagement and the image and value of HR for their business, for instance project-based reviews, badges, social feedback

    Modern software like CSOD then needs to help tie all this back to the annual process
  • It is a strategic importance to define a set of KPIs to measure the effectiveness of performance reviews and management by objectives. With the new flexible workforce, a yearly performance review may still be necessary, but absolutely not sufficient to have a precise view on employees’ performance evolution. It is necessary to be able to trace following indicators
    Perf vs. target
    Perf of this period compared to the previous one
    Perf pre- and post development plan
    Perf compared to a requested position


    Specific
    Measurable
    Achievable & Agreed upon
    Relevant
    Time-bound
  • Key performance indicators Evaluate performance on the job and in the field to determine areas that must be addressed to ensure consistent, competent job performance
    Ensure compliance & procedure Evaluate competency—and reduce liability—by observing critical tasks as they are performed in real time by your staff
    Insight into competency levels See at a glance which employees are ready for increased responsibility or which employees need additional training. Establish baselines for new employee training and development
    Deliver regulatory reporting Quickly demonstrate compliance and capabilities to both executives and regulatory agencies, accurately and in a timely manner
  • Source: http://www.gallup.com/businessjournal/182321/employees-lot-managers.aspx


    they have to be very good from an operational point of view, and of course reach their targets
    they are responsible for the operational efficiency of their team
    they are also in charge of making each member of their team reach their individual target
    they must properly mentor and coach the entire team...
    ... and inspire them of course
    they have to review each and everyone during the yearly performance reviews...
    ... but also provide regular on-the-job feedback...
    ... taking into account that they have to compliment 3 x more than they criticise
    they have to be aware of everyone's talents and weaknesses...
    ... in order to properly define development plans...
    ... in complete awareness of the company's long term strategy...
    ... which they may not always be able to communicate openly to their team
    and of course, they have to be problem-solving, show integrity, manage emotion, show consideration, be proactive and participating, sociable, empathetic, accessible (as explained by British HR association CIPD), to which we can also add intelligent, healthy, serene, brilliant, clever, dressed with style and what not

  • HR core business should be in talent management, with following main elements:
    - Support line managers as main relay for HR
    - Define a competency framework in line with the business
    - Manage career in a personalised and targeted way, (cf. Josh Bersin, « Treat your employees as customers and consumers »)
    - Implement a functional and performing talent management system
    - Plan for the future (workforce planning)
  • We increasingly see HR department question the legacy models and look for more pragmatic ways to achieve business results for their business, focusing on the core outcomes their business wants, e.g. :
    Having the right people with the right skills in the right jobs
    Accelerating time to productivity
    Recruiting the best
    Etc.
  • From an HR standpoint, there is a ton of investment and progress to be done still on historical and global reporting. Many companies have to do a lot more there. We as a vendor continue to invest here too
    Now all forms of analytics are useful and valuable for HR.
    Visualisation will help HR deliver better value for executives via offering a helicotper view over HR data, helping capture insights
    Big Data will help HR make the right decision (I’ll double-click on what we mean here in a minute)
    And finally workforce planning is a way for HR to truly be a business partner and help plan the resources, skills and budgets to match with the changing business environment over time for the company
  • And this is leading to an important shift in how people prioritize their investment in IT systems:
    Over the last 10-15 years, HR organizations focused on implementing integrated talent practices to facilitate business decisions where Core HR systems were at the center of the HR function.
    Today’s HR organizations must be agile, business-integrated, and data driven. HR must go beyond supporting business needs to actually influencing business decisions.
    Talent is now at the center of everything that HR is trying to solve. How are you getting the right talent in your organization or creating leadership pipelines? It’s not about HRIS processing.
    Driven by the need to deliver greater business impact, HR now sees data as a resource for impacting critical business outcomes and supporting business decisions.
    HR professionals are looking at new software solutions to replace their disparate legacy HRIS systems to unify employee data from a plethora of standalone applications and ensure their new HR environments are systems of engagement instead of just systems of record.
    Organizations want efficient, cost-effective solutions that also provide more accurate information and deeper insights.
    In summary, organizations are seeking a single repository of employee data that consolidates the core system of record with talent information across all geographies and positions with talent management at the center to drive organizational transformation.
  • In our fast changing, complex world where everyone’s environment varies, it’s hard to outline

    I have attempted to share 5 key concepts


    Geoffroy
    mobility: it builds trust, increases engagement and efficiency, and make employee grow
    Culture: this is a high responsibility of the HR department, both when recruiting (does this person fit in?) and ongoing. Changing a culture (for example to develop risk awareness) is difficult but can be done with tools such as learning programme and C-level involvment
    Business: using data and planning can foster dialog with line managers, who are eager for more HR support, as shown by IDC
    Connect: enabling collaboration helps create a culture of innovation, and has an impact on results as shown in the survey
    Engagement is both the end result and a new start of the whole process, as it will trigger a virtuous circle of trust and motivation

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