Performance Management in 2017

Companies Must Become Active and Responsive – interacting with everyone working in their company.

Today’s workers expect change. Constantly. And feedback. Specifically, they expect to have the ability to change their goals as business and their own needs change. They also expect to make changes using technology. And any technology solution should mirror the experience they have in their personal lives – it should be intuitive, responsive, relevant, and immediate.

Not only should any technology be up-to-date, it needs to provide immediate feedback.

For example, when you deposit a cheque using your banking app, it tells you immediately whether that transaction was successful. Same when you purchase something using your tablet.

The modern workforce wants that type of feedback about their performance because they have choices to make about their careers and they know it.

Regular performance feedback isn’t a Millennial thing. Every employee wants to know where they stand; what their future is; if you rate them and what for; what the niggles and opportunities and challenges are. Don’t wait until they have resigned to tell them you saw them as a future Director. It will ring hollow no matter how sincere.

Likewise any feedback does not and should not exclude contractors, consultants and other individuals working with the company.  Today’s workforce is flexible moving very between employment and self employment to suit them. Don’t miss out on interacting with everyone that is working for you.

Active Performance Management enhances the Modern Workplace

Any Active Performance Management solution should take the best of the traditional performance management process and combine it with the needs of today’s workforce. It provides a structure that managers and employees want so the process remains fair. It can also include the documentation aspect necessary to support job changes and promotions.

By making the process technology driven, it can take the traditional performance management one step further and facilitate real-time feedback conversations that employees want to move to the forefront. It can also utilise downtime.

Real-time feedback piece is so important to everyone that wants and values it. Waiting once a year (for a performance review) doesn’t work. It’s time to move to real-time system for performance, with frequent touch points between the manager/client and employee or worker.

5 Key Elements of Active Performance Management (APM)

2017 is the right time to introduce active performance management. There are four key elements to changing current performance management processes.

  • Regular performance conversations. Most organisations have some mechanism in place requiring managers and employees to meet once or twice a year. With active performance management, employees and managers meet more often. The timeliness of performance feedback helps the employee perform at a higher level.
  • Peer-based feedback. In addition to increased manager feedback, employees learn how to provide each other with performance feedback. This can be just as valuable – if not more so – than manager feedback. Employees collaborate with different colleagues every day and need positive working relationships with their peers.
  • Focus on current and future projects. More frequent performance conversations mean less time is spent rehashing old behaviour. Workers and managers already know what happened in the past. The conversations are spent on future performance, talking about how to accomplish goals.
  • Development at every level. Every worker becomes skilled in delivering performance-related feedback. This helps them take ownership of their career development.
  • Looking to the future – The elephant in the room is often that both sides know that to truly realise ambitions the individual may not stay in the same place until retirement. Working in a new way means such ambitions can be captured and companies can stay in touch with their future talent even if they aren’t currently working for them.

When you implement active performance management into an organisation you may wish to phase-in different key elements.

Phased implementations can be very successful and embed ways of working firmly. Performance Management facilitated by technology will allow the flexibility to introduce the entire process or each piece separately.

Active Performance Management Leads to Talent Activation

Organisations must create processes that result in having the best talent in the right positions. Those processes need to include creating an environment where all their workers (current, future and past) feel empowered to ask for and give feedback and that any training/development they need to be available in a timely manner.

When employees are engaged with their work, their performance improves and organisations begin to set the pace rather than react to the pace of the market.

We all understand the opportunity cost of not being agile in business. Think of companies like Uber, Airbnb, and the new Amazon app-based grocery stores. These companies shouldn’t have been able to disrupt the way that they did had “legacy” brands kept up with or innovated within their respective spaces. Increased agility enables organizations to increase the speed at which they conduct business and innovate, which improves the bottom-line.

 

Is in-house HR the best option for your Company?

Having worked ‘in-house’ for much of my career and more recently as a consultant, I’ve had seen both sides. This is particularly illuminated when one performs a detailed ‘access all areas’ HR audit.  Matching the needs of the business against the capability and remit of the HR function. Often it can be a bigger gap than anyone realises.

New role in HR – Work out what you need to do to fit in

When you begin a new role with a Company they are keen that you bring new ideas and change things. But many quickly realise that the most important thing to learn is ‘How they do things around here’. For in many companies not working that out quickly could mean one is not in post long enough to do more than just be new.

Companies by their very nature are insular. The individuals that do well are either the very brave and talented who do their own thing but bring in so much revenue that no-one cares. Equally those that are extremely corporate will have long and successful careers. Individuals that are very bright will move on naturally because there will be many options for them. Those that are clearly poorly performing will be moved on. But everyone else stays.

So, in that context the parameters of what ‘good HR’ looks like are set. This will almost certainly involve maintaining unique processes and ways of doing things. Quirky administrative approaches. Often long winded. And all the unwritten stuff about who gets fired quickly and how.  And what gets ignored or isn’t deemed officially important.

HR ignore half their customers

When a Company initiates an HR audit what they often want to know is how do we compare with our competitors? Do we have the right resources and skills in HR. Too much or too little? That answer is always unique to the organisation as often it is driven by individuals and/or the sector. If you have someone very senior that insists that HR is all about administration and problem solving and nothing more than that will dictate who you have in your function. If you are in a sector where you have high turnover and a lot of ER problems that may require some intense catch up before you move to a different model.

Companies have different motivations for HR audit from are we compliant (will I get my bonus?) right through to do we have the skills and talent in HR and the remit to achieve what the ambitious CEO and board want to achieve.  Often there is quite a gap.

And HR still exclusively focus their activities on ‘employees’. The self-employed, the flexible labour and the workforce of tomorrow are largely ignored which is a bit like only caring about the customers that visit your store and not the ones that shop occasionally on-line or could be buying your products.

Most HR process are substantially similar – not substantially different.

In an article written by Ruud Rikhof, Managing Partner of KennedyFitch he states “We believe that 80% of the activities in HR are substantially similar from company to company, not substantially different”. So, if it is substantially similar, why would you need it “in-house and customised” when you could pass it on to someone else, do it quicker and save money?

So many HR practitioners talk about Best in class. So many CEO’s don’t share these aspirations as they see such a process as long winded, expensive and distracting from core business.

Do ‘best in class’ processes you have contribute to the bottom line?

Whilst core HR processes should be agile and robust, they will never give your business a competitive edge. So, it’s wise to focus what resource you have on the things that will.

One of the issues about benchmarking your company’s HR needs against another is that whatever standard you use may not be the right one.

Your performance management system may have won awards and have some great technology with it – but does it drive performance?

You may have invested in a fantastic HR software system – but where are the reports and does anyone use or understand it apart from HR?

So, do you know what is right and important for your organisation and is that where you are directing your resources?

Individuals want an individual experience

When you go out to market to hire exceptional talent, the person you offer to is unique. You are excited about them joining and may even create a different package to get them on board. The CEO will take an interest in their on-boarding. But at that point the individual approach begins to wane. HR will get anxious that the Company is being inconsistent and will want the new hire to be treated the same as everyone else.

We have observed that increasingly individuals demand that they are treated as individuals. It’s often a deal breaker. Yet in-house HR activities are focussed on treating everyone the same.

What are the alternatives?

Many companies value their long serving loyal HR administrator. Key thing is to ensure you have the right level of senior HR challenge and expertise.

Equally you can contract out the administration, investing in a good system and employ a bright career hungry HR professional to work with your leaders and focus on the big things for your Company.

Many companies have an Employment lawyer on speed dial which absolutely supports the reactive problem solving risk adverse model that is hardly likely to have your HR function doing things differently.

Of course you can have both. HR lead in-house and HR admin in house. But that then results in what many businesses have now. A cost centre that stops more than it starts and manages problems.

Getting your HR capability right can be a powerful tool for increased competitive advantage. Especially in a challenging market

 

www.amelore.com

Christmas. It’s the time of year when…

This is the ultimate advice checklist for how HR should deal with Christmas issues…
1. Employees sometimes do stupid stuff. At Christmas time and otherwise. It’s a fact of life.
2. Just deal with it.
3. Resist the urge to worry too much about vicarious liability, discrimination and constructive dismissal. Although it is probably a good idea not to put any mistletoe up in the office.
4. Resist the urge to write any sort of policy.
5. Resist the urge to put any sort of disclaimer about behaviour in any Christmas party related literature. If someone wants to punch Bob from Accounts on the dance floor after 12 pints of beer then they will do it anyway. See points 1 and 2.
6. Resist the urge to write special rules about absence from work after social events. See point 2.
7. Apply Christmas common sense.
8. Avoid sprouts in an office environment at all times. This is especially important in small or poorly ventilated offices.
9. Never, ever, buy Secret Santa presents from Ann Summers.
10. Put a tree up; Eat some Quality Street; Wear a Christmas jumper; and remember to enjoy yourself.

Part 2 of our predictions for HR in 2016

In the second part of the ‘Key predictions for HR for HR in 2016 we continue with Bersin of Deloitte predictions for global HR in 2016, additional commentary by Amelore.

the chariotWe have already covered Digital HR; the rush to replace outdated HR systems; the Global rush to replace and re-engineer performance management; engagement, retention and culture as top priorities and the continuing mobility of career and talent and the investment in coaching and mentoring. Moving on we have…

  1. New models for learning

It’s all about the Four “E’s”

Education (formal training)

Experiences (developmental assingments and projects)

Environment (a culture and work environment that facilitate learning)

Exposure (connections and relationships with great people).

70/20/10 model – 70% through on the job experience and practice, 20% through other people by exposure to coaching, feedback and networking and 10% through formal education-based learning interventions.

  • Traditional LMS replaced by highly interactive, curated and recommendation approach to learning.
  • L&D professionals focussing on becoming ‘learning experience designers’ as opposed to ‘instructional designers’.
  • Employees leave organisations that do not develop them or provide appealing learning experiences.

Organisations are increasingly paring down their L&D team and using external expertise if they want to run face to face sessions.  Coaching is used more as is e-learning. Many organisations have developed a strong e-learning suite but enhance this with external providers.

  1. Diversity and Inclusion – merge with key business strategies to move well beyond compliance and become a strategic part of business.

This has been part of HR for 30yrs. But little impact. Now on Global CEO’s agenda due to global workforce. Lots of press about issue – unconscious bias etc

Deloitte studied talent practices of 1,400-plus companies with a focus on Asia. After nearly 2 years of research finding point conclusively that the highest performing companies with a far superior cash flow embed inclusion into talent practices everywhere.

In the UK last year, 2015, 75% of graduates were female.  Over a third of British households are now led by a woman earning more than her male partner or as the sole earner. House husbands are on the rise although support for men getting back into the workplace.  In the same way workplaces are geared towards supporting women working in part-time roles as secondary breadwinners but missing that many women are fulltime. Not always from choice (career women) but necessity. Just people with careers.

Organisations still have lots to do to truly embrace equality in the workplace. All male boards are all male boards.  They can’t hope to represent the workforce in the way a more balanced team would.  Likewise Unconscious Bias is alive and rampant in many recruitment practices. In many workplaces. PWC actually have a policy that women who work as receptionists have to wear 2-4inch heels. In 2016!

  1. People Analytics accelerate its growth

Companies are hiring head of people analytics, building teams and replacing HR platforms with a singular goal of creating a meaningful and useful database of information about their people.

New function is critically important. Just as Marketing can analyse the result of campaigns, create personas and segments of customer population and understand the drivers of market share success so companies are starting to be able to do for employees.

Emergence of behavioural economics leading to the application of ‘choice architecture.  Allowing employees to choose next steps – ie choice of 2/3 new jobs.  Turning traditional practices on their head.

HR teams are now becoming very data driven and the world of analytics is sweeping forward.

Many HR teams are led by people that don’t have these skills and consequently don’t set this as an area of focus.  Organisations are too used to poor quality data coming from the HR team that there is a failure to invest. In better technology. In staff with the skills to produce meaningful reports. So many businesses still have appraisal systems requiring manual interpretation by the HR team. This reflects an approach and a period of time long gone by.

  1. New breed of HR leaders enter the stage

HR profession is going through a true reinvention. Younger leaders starting to take over, heavy investment in technology, organisations sharing their creative solutions openly and critically the alignment of HR with the business is improving dramatically. Innovation is key and the function of HR is becoming increasingly important to companies.

Yet many still have Administrators or Policemen in charge with old fashioned or paper driven systems, under trained teams, organisation structures that appear bloated and misaligned and many have not figured out how to do analytics yet.

It is obvious that companies with talented HR leaders will be more competitive. Sharper. More focussed.

How can companies with the wrong HR support ever truly compete on the global stage?

We find many companies are unaware of how HR is changing and either have no-one supporting them or have the wrong level of support.

Conducting a review of your HR needs is a sensible action for any CEO.  Outsourcing HR needs, enhancing internal support, in-housing (hiring internally when you have had HR outsourcing support) and HR enhancement (additional services to compliment existing HR support) are all possibilities for fast growing and ambitious businesses.

Summarised from Predictions for 2016 – A bold new world of Talent, Learning, Leadership and HR Technology ahead. Bersin by Deloitte with commentary by Amelore.

 

Key predictions for HR in 2016

Amelore comment on the key predictions for HR made by Bersin of Deloitte. Here is the first part of two blogs with a summary of Bersin’s predictions and our observations.

  1. wheel_of_fortuneDigital HR arrives – we are not talking employee databases here. 8 million have smart phones, 3 billion use internet. Deloitte research says people check their phones 8 billion times a day!

The trend predicted is a design centric digital focus within HR. Apps will become king.  Clouds sit behind scenes. Traditional software will start to fade out. Any new technology need to be as easy as Facebook or Instagram to use.
Organisations are building HR platforms to allow rapidly built solutions, collect data and people and business process – easily. So they can quickly iterate & improve employee digital experience. Eg 2015 Sidekick Commonwealth Bank of Australia – brings together employees HR, collaboration, admin & support apps to their phones. 20,000 users in 2 weeks of roll out. V successful launch.

Think all my HR programs are apps…

“Of course the actual reality in many organisations is no HR database or something clunky that produces data that has inaccuracies.  When we talk to HR leaders about what technology they are investing in, it tends to be an HR system.

Because of poor organisational experience in the past there can be a reluctance to invest. Cross corridors into the Marketing department and you may see a very different picture.  Employees just like consumers are critical to the success of the business.”

  1. Rush to replace outdated HR systems

Why? To improve employee experience.  Harness people data. 60% of large companies are replacing software. Workday, SAP, Oracle, ADP, Ultimate Software, Cornerstone OnDemand, Ceridan etc are popular choices.

Offering solutions for recruitment, on-boarding, learning, performance, talent management compensation, succession, talent analytics.

The global trend is reduction of HR systems (average is 7) modernising with cloud technology sitting behind.

  1. Global rush to replace and re-engineer Performance Management

This is the hottest and most disruptive area of HR – redesign of performance management. 60% of companies are doing this.

Existing process too complex say 88% of managers.

End to end talent management market fairly mature – core HRMS, payroll with talent management module is a core tool on offer from many.

Trend is around check in’s, feedback, and more focus on development. Followship. Moving away from leaders. Building systems and tools to let people work flexibly and network.

“Many fast growing businesses have been practicing followship for a while. Younger and flatter teams without the traditional hierachy. And checking in with their staff. And with a development led focus which is a core retainer. 

In 2015 Amelore conducted some independent research into the cost and effectiveness of appraisals. Results varied but the core message was that it was a disproportionately costly activity at a time when organisations weren’t investing in staff development and losing them.  If you got rid of your appraisal process tomorrow and replaced it with a career development led focus you’d save money and retain more staff.”

  1. Engagement, Retention and Culture persist as top priorities

The job market is hot, hot, hot. Many scare skills are in scare supply, the economy is growing so the employment experience is highly transparent.

Open feedback is increasingly expected – 80% of millennials want to give their bosses an appraisal!  Employment brand a big thing. Staff engagement once a year surveys is old fashioned. Real time and continuous feedback is king.

There are 5 different types of feedback systems emerging:

Pulse survey tools – managers and HR rapidly take the pulse of the people’s feelings and opinions supplemented by annual survey.

Feedback apps – Employees can randomly provide an open suggestion box of comments that can be analysed, filtered, up-voted, down-voted & evaluated at any time.

Performance feedback systems – Give employees an opportunity to provide team or manager feedback as part of the performance management cycle.

New Work Environments – people work in teams through collaboration with tools (Slack, Workboard, Trello, Impraise) & give feedback immediately on anything.

Social Recognition Tools – Employees can give thanks, points & other forms of positive feedback to others in an open and social way.

Trend is towards letting employees “Like” or “Yelp” things at work which provides valuable data about work practices, safety situations, customer service issues and of course management.

“Some organisations are struggling with this new way of working particularly senior teams who seek to impose something that is more familiar to them. This gives the younger CEO the advantage that experience gives someone older.  Resisting large scale changes in the workplace is like attempting to type better internal memorandums as email emerges.”  

  1. Career and Talent mobility continues – investment in Coaching and Mentoring grow rapidly.

Investment in leadership is inconsistent. At highest level this is only £2,600 per leader per year. This is a very modest investment in great leadership.

Roles of leaders have changed. Spans of control have increased by 11 percent for lower-level leaders.  Todays leaders are ‘team leaders’ more than ‘top down executives’ learning how to lead cross functional global teams.

Approximately 50% of all leaders in every company are first or second line leaders – getting younger each year. Coaching and mentoring are therefore critical for their development.

New leadership model is followship – ability to set an example, empower and encourage others, drive change, alignment and inspiration.

Companies still far too attracted to old models of leadership inc long development times, slow progression & traditional HiPo (high potential) programmes. High performing companies promote young leaders at a highly accelerated rate and enable them to learn on the job.

“The smart money is on those with potential. Whatever their age. One of our clients Monica Vinader, who have trebled their turnover in the last 3 years and grown rapidly, have always identified and backed potential. A hallmark of their success has been the dedicated and hands on approach that both Monica and her sister Gabriela have shown in being very clear what is expected of individuals.  This has enabled a number of talented individuals to thrive and flourish along with the company.”

Summarised from Predictions for 2016 – A bold new world of Talent, Learning, Leadership and HR Technology ahead. Bersin by Deloitte with commentary by Amelore.

 

Strong HR in a High Growth Business

Research from the CIPD has shown that HR has a vital role to play in driving long-term performance in SMEs, whatever stage of growth the organisation is at, and whether or not it has a dedicated HR function.

The research report (Sustainable organisation performance through HR in SMEs published in 2013) identifies six key insights which can help HR managers – or those responsible for HR – anticipate and respond to the people-related challenges that will inevitably arise as the business grows.

Read on to see if these resonate in your business.

  1. Anticipation is key:  HR needs to have a clear understanding of where the business is headed.  They need to be deeply familiar with the strategy, vision and values, so that they can anticipate key stages of growth and transition and plan for any necessary shifts in the way HR challenges and processes are managed.
  1. Values and purpose should be the bedrock of the business.  One of the biggest challenges facing SMEs is how to retain the heady excitement and ‘family’ feel of the early days.  HR has an important role to play in preserving the vision of the founder or leader and embedding it in all aspects of people management.  Are people engaged with the overall purpose of the business and clear about how they fit into the bigger picture, for example?  If innovation and creativity are valued in the business, are there mechanisms in place to reward employees demonstrating these behaviours? Make sure HR processes are set up to reflect the way the business wants people to work on a day-to-day basis and are not time consuming or complicated.
  1. HR and business strategies need to be aligned.  In the early days, it can be difficult for HR to make itself heard in an SME.  Owner/managers often see it as something they ‘have to do’ rather than a strategic tool they can use to support business growth.  HR needs to work hard to demonstrate that well-thought out people processes can play an important part in building the high performance the business needs if it is to sustain long term growth.  Having up-to-the-minute information about everything from head count to available skill sets is a good way to build credibility and get your voice heard.
  1. Keep processes simple.  As an SME grows, it inevitably needs to move to a more structured approach and to introduce more formal people processes.   It’s important, however, to find the right balance between structure and fluidity so that agility and entrepreneurial spirit are not stifled or undermined by bureaucracy.  Many Office Managers given HR responsibility will implement inefficient and out of date practices due to lack of training or the desire to create a job for themselves. Many processes should become automated.

The latest HR software allows employees to access and update their own data – and makes it much easier for line managers to manage processes such as holidays and absence.  It cuts down on the paperwork, ensures consistency and makes HR processes simpler and more transparent.

  1. Strike the balance between preservation and evolution.  As the business grows, it’s important not to be sentimental about what has always been, and to let go of processes or aspects of the business culture that no longer support its vision or priorities.  In today’s environment, for example, highly formal team meetings are often giving way to more immediate and engaging forms of communication.  Likewise annual appraisal processes are increasingly being replaced with a constant feedback loop and a greater focus on career development. SMART objectives are now seen as a bit silly.
  1. Lay the foundations for the future.  In a busy SME, it can sometimes be difficult to see beyond the immediate operational issues.  HR people in small businesses often find themselves caught up in a relentless cycle of recruitment as the company grows, and barely have time to lift their heads to look at what strategies they should be putting in place to prepare for the future.  Make sure you are not getting so caught up in short term solutions that you are missing golden opportunities to support longer term goals. Sow now what you later want to reap.

The way forward

What HR strategies are you employing to support growth in your SME?  How do you manage to make time for the strategic issues? How scalable are your current practices if you continue to grow at the rate you have?

If you are planning a lot of recruitment when did you last review your recruitment and attraction practices, your employee benefits package, how you manage talent?  No point in putting lots of effort into recruitment if you have a revolving door straight back out to your competitors. Both expensive and a waste of your time.

Whilst your business may not need a full-time senior HR practitioner, working with someone flexibly to help set the direction internally and pin down your strategy for how you handle the people side of the business just makes good business sense.

Does the C-suite know what good people practices look like?

One of the million dollar questions in every business is whether the CEO and the senior management team know what good looks like. Because if they don’t, how will they set standards and manage upwards to achieve better results? To compete? To grow? To survive…

There are some areas of the business that they will feel confident, are the main areas to focus on:

Product development
Customer service
Finances and financial performance
IT systems and core infrastructure
Marketing and PR.

But often it is the area of people management, HR, recruitment, the workers, the workforce and the future of work that they will feel less sure about.

In the Harvard Business Review, July-August 2015 edition, Peter Cappelli wrote about “Why we love to hate HR…and what HR can do about it” and observed that “CEO’s and operating executives are rarely experts on workplace issues”.

Many companies say to us that what they have in their HR function is OK or fine or adequate. Many HR professionals talk to us privately about clear areas that could be improved and express frustration that the business doesn’t agree.

In the above mentioned HBR article Cappelli mentioned a Head of HR at a leading corporation who had survived lots of restructurings and was asked about the key to his success. His response was “I do whatever the CEO wants”.

That can happen to HR professionals. HR can become a function more adept at being defensive than inspiring. They go into survival mode and don’t energetically tackle key issues that need their drive. Issues around culture, investment in cutting edge technology, the changing face of the workforce, identifying the workers of tomorrow and ditching the employment practices of yesteryear.

Appraisals are a fine example of an HR practice that we’d say most HR professionals know don’t work. Can you imagine colleagues in Marketing or Finance persevering with such a practice? Especially if it costs great amounts of time and money and critically, damaged their internal brand?

Individuals go into HR because they have vision, insight, energy and enthusiasm about the workplace and people practices. Many have transformational skills in the areas of coaching, recruitment, listening and reflecting that the business they work in doesn’t notice or value.

It is the job of any CEO to make sure they nurture and develop their HR team and if they need external support to help them identify what good looks like then that is a priority. The one thing the C-suite will be united on is the importance of people, innovation and competitive advantage.

Often the HR department is the last place they look or a function that is pared down to the bone, dramatically under invested in compared to other functions (that they understand better) or focusing on the wrong priorities.

Making that re-connection between HR and the business; helping develop business cases for progress and change. Re-energising that relationship by running workshops for the C-suite and HR to define what good looks like is part of what gets us out of bed every morning.