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Employee Performance Management 2.0

The world of Employee Performance Management (EPM) has had a seismic shift in the last twelve months. Many organisations are now being caught napping as their industry or government sector embrace new employee performance methodology as well as technology. For example, at least one multinational petrochemicals corporation has flown forty delegates to Australia to receive training on Management Objective Setting.

Even organisations who have previously automated their process are now reviewing their position. Notably Victoria Police, who recently invited public tenders for just this purpose.

It is worth reviewing what the perceived problems with Performance Management systems were twelve months ago.

Where Most Employee Performance Projects Fail - The Old Reasons *
1. Our Appraisal System does the job
2. Running the system on paper
3. Force fit the organisation to the software
4. Build it ourselves
5. Assume line managers can cope with a manual system
6. Assume it's easy for line managers
7. Thinking automation will lower objective and review quality
8. People will do it on computer and never meet face to face
9. We can't afford it

* Extracted with permission from www.peoplestreme.com Whitepapers

Increased Choice
Awareness of these issues and how to deal with them has improved considerably with the proliferation of competing Employee Performance Management solutions. This increase in supplier competition also validates the demand for EPM which is now drawing more suppliers into the industry in order to meet increased demand. This is all good news for users of Performance Management systems who now have a much better choice of solutions than they did twelve months ago. Many suppliers can now deal with the majority of The Old Reasons.

But demand and competition have a significant impact on innovation through new product releases and consulting services. In the last year or two, the focus has shifted from HR process to organisation strategy and the boardroom.


What is Employee Performance Management 2.0 ?
The most striking change has been the visibility and adoption of Employee Performance Management by the CEO and executive teams. It is no longer being seen as a HR process. The board and CEO now recognize EPM as an important initiative which can actually help them achieve their goals much more quickly. This change in perception has come about because :

a) EPM suppliers are starting to provide Strategy Mapping services to the board and executive teams. These services, otherwise known as Alignment Consulting or Objective Alignment, take the organisation strategy and break it up into smaller pieces, then assign the pieces to individual executives. Obviously, each executive relies on others so the interdependencies between executives are also mapped and quantified. This creates a sense of openness in the senior ranks as all personal goals start to be aligned with the organisation strategy.

b) The EPM process has become the enabler for strategic management frameworks such as Balanced Scorecard, Six Sigma etc. These frameworks deal with big picture issues and very few (and usually quite vocal) organisations have succeeded in aligning these frameworks with what most employees actually do every day. Performance Management is an excellent method for cascading down organisation objectives and breaking them into smaller and smaller chunks for individual employees to digest.

c) Compliance frameworks such as Sarbanes Oxley and Basel, risk frameworks such as ANZ 4360 are all being mapped into PM systems. This is more an activity management exercise but PM systems are well suited to dealing with compliance issues as compliance is simply one more thing than needs to be measured.

Finally, it is very rare to find executives who know how to set high quality abjectives. (Test your objective quality at Objective Testing). Some EPM suppliers also provide a consulting service to help managers use the right language when setting objectives.

The HR executive and management team have also seen significant improvements in Employee Performance Management 2.0 solutions, including :

i) Quick face to face style reviews
ii) Internal blogs and web pages for staff
iii) Employee Recognition and Reward Systems tied into PM
iv) Organisational Charting
v) Talent Management including succession planning for whole of organisation

The following breakout box lists the key issues facing organisations wanting to explore the benefits or Performance Management today.


The New Reasons Why EPM Systems Fail
1. Not Strategy Focussed
The performance initiative was not directly tied to organisation strategy by the EPM supplier
2. Not linked to Outcomes
Executives and managers were not trained in how to set objectives - SMART is not a valid method
3. Price and Value Are Confused
The EPM supplier did not provide a valid business case or express EPM benefits in a way which executives can understand
4. Software Supplier Only Provides Software Training
having more than one supplier involved in the EPM project often leads to finger pointing
5. Weak Reporting
Too few or meaningless reports turn the executive and management team off the initiative
6. Weak Employee and Manager Features
Simple goal setting and review systems have been outmoded by feature and content rich EPM systems e.g,. objectives library, position description library

The world of Employee Performance Management (EPM) has had a seismic shift in the last twelve months. Many organisations are now being caught napping as their industry or government sector embrace new employee performance methodology as well as technology. For example, at least one multinational petrochemicals corporation has flown forty delegates to Australia to receive training on Management Objective Setting.

Even organisations who have previously automated their process are now reviewing their position. Notably Victoria Police, who recently invited public tenders for just this purpose.

It is worth reviewing what the perceived problems with Performance Management systems were twelve months ago.

Where Most Employee Performance Projects Fail - The Old Reasons *
1. Our Appraisal System does the job
2. Running the system on paper
3. Force fit the organisation to the software
4. Build it ourselves
5. Assume line managers can cope with a manual system
6. Assume it's easy for line managers
7. Thinking automation will lower objective and review quality
8. People will do it on computer and never meet face to face
9. We can't afford it

* Extracted with permission from www.peoplestreme.com Whitepapers

Increased Choice
Awareness of these issues and how to deal with them has improved considerably with the proliferation of competing Employee Performance Management solutions. This increase in supplier competition also validates the demand for EPM which is now drawing more suppliers into the industry in order to meet increased demand. This is all good news for users of Performance Management systems who now have a much better choice of solutions than they did twelve months ago. Many suppliers can now deal with the majority of The Old Reasons.

But demand and competition have a significant impact on innovation through new product releases and consulting services. In the last year or two, the focus has shifted from HR process to organisation strategy and the boardroom.


What is Employee Performance Management 2.0 ?
The most striking change has been the visibility and adoption of Employee Performance Management by the CEO and executive teams. It is no longer being seen as a HR process. The board and CEO now recognize EPM as an important initiative which can actually help them achieve their goals much more quickly. This change in perception has come about because :

a) EPM suppliers are starting to provide Strategy Mapping services to the board and executive teams. These services, otherwise known as Alignment Consulting or Objective Alignment, take the organisation strategy and break it up into smaller pieces, then assign the pieces to individual executives. Obviously, each executive relies on others so the interdependencies between executives are also mapped and quantified. This creates a sense of openness in the senior ranks as all personal goals start to be aligned with the organisation strategy.

b) The EPM process has become the enabler for strategic management frameworks such as Balanced Scorecard, Six Sigma etc. These frameworks deal with big picture issues and very few (and usually quite vocal) organisations have succeeded in aligning these frameworks with what most employees actually do every day. Performance Management is an excellent method for cascading down organisation objectives and breaking them into smaller and smaller chunks for individual employees to digest.

c) Compliance frameworks such as Sarbanes Oxley and Basel, risk frameworks such as ANZ 4360 are all being mapped into PM systems. This is more an activity management exercise but PM systems are well suited to dealing with compliance issues as compliance is simply one more thing than needs to be measured.

Finally, it is very rare to find executives who know how to set high quality abjectives. (Test your objective quality at Objective Testing). Some EPM suppliers also provide a consulting service to help managers use the right language when setting objectives.

The HR executive and management team have also seen significant improvements in Employee Performance Management 2.0 solutions, including :

i) Quick face to face style reviews
ii) Internal blogs and web pages for staff
iii) Employee Recognition and Reward Systems tied into PM
iv) Organisational Charting
v) Talent Management including succession planning for whole of organisation

The following breakout box lists the key issues facing organisations wanting to explore the benefits or Performance Management today.


The New Reasons Why EPM Systems Fail
1. Not Strategy Focussed
The performance initiative was not directly tied to organisation strategy by the EPM supplier
2. Not linked to Outcomes
Executives and managers were not trained in how to set objectives - SMART is not a valid method
3. Price and Value Are Confused
The EPM supplier did not provide a valid business case or express EPM benefits in a way which executives can understand
4. Software Supplier Only Provides Software Training
having more than one supplier involved in the EPM project often leads to finger pointing
5. Weak Reporting
Too few or meaningless reports turn the executive and management team off the initiative
6. Weak Employee and Manager Features
Simple goal setting and review systems have been outmoded by feature and content rich EPM systems e.g,. objectives library, position description library

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