Automated Performance Management Systems: Efficient and Effective
According to a recent survey reported in Forbes, almost all large companies use performance evaluations for the majority of employees. Likewise, research by performance management systems providers has found that nearly 85% of small- and mid-size companies also conduct performance evaluations.
For the stakeholders involved—the employees evaluated, the managers that evaluate, the executives that review and act on the results and the HR personnel who must administer the system—the process can be greatly improved by transitioning from a manual to an automated system.
Most large organizations have already made this transition. But many small- and mid-size companies have not. These companies continue to use word-processing documents, spreadsheets and email to administer their evaluations. The difficulties that arise are not surprising. A “manual” system can be inefficient. There may be significant time lags between the request for evaluations, the completion of the forms, the processing and aggregation of the feedback and the review of the results. In addition, a manual system may not be an effective tool for aligning the company’s goals with employee performance.
An automated system may be obtained from several sources. Solid and effective systems can be purchased off-the-shelf, and do allow for significant customization by the particular company. Many larger companies use proprietary systems. More recent options include Software-as-a-Service applications, which are accessed via the internet and allow for cloud-based storage of review data. The best solutions will be those that can integrate with a Human Resource Information System (HRIS). Irrespective of the source, some of the benefits of using an automated system are the following:
- Setting Performance Objectives: In our metrics driven culture, most of us are familiar with the term “S.M.A.R.T.” as it applies to goal setting (Specific, Measurable, Achievable, Relevant, and Timely). This acronym describes a recognized “best practice” for creating employee performance goals. For many automated systems, these “best practices” are encouraged because they are built into the framework. Automation also facilitates communication regarding goals, allowing stakeholders to better see and adjust employee goals to ensure they are meaningful and tailored to fit company-wide objectives.
- Increasing Visibility: Many employees do not track their progress towards performance goals. Also, many are unaware of how their personal goals fit with company-wide objectives. An automated system can provide real-time, constantly available information on progress on both counts. Automation allows for the easy generation of progress reports and can increase the visibility of company-wide objectives. This may be particularly important where goals depend on the efforts of multiple employees. An automated system permits those employees to view their collective progress and encourages shared accountability.
- Improving Compliance: Manual systems often require a good deal of follow up with managers to meet performance deadlines. These systems also introduce a measure of subjectivity, which can lead to inconsistency in the evaluation process. For example, managers and employees may alter forms or fail to complete significant portions. An automated system addresses these issues. Forms are centralized and may only be changed by authorized personnel. The system will monitor compliance and automatically generate reminders. Also, the completion of the entire form, in accordance with the parameters set by HR, is easily monitored by the system.
- Creating Effective Evaluations: An automated system allows managers to more frequently track employee performance. Through the real-time measurement of progress, managers can quickly identify gaps and make corrections. Equally important, an automated system improves the quality of feedback. Many people are, by nature, reluctant to “criticize” and avoid confrontation. Managers are no different. An automated system can be tailored to give managers, in essence, a script of what needs to be improved. Further, it allows a manager to provide deeper feedback by giving him or her specific metrics of the employee’s performance, for example, how it compares to peers company-wide. It can then require that the manager certify that these points have been reviewed with the employee. Automated systems are not a substitute for management skills; but they are an effective tool for enabling these skills. Ease of use will also increase participation.
- Supporting Better Decisions Through Data Aggregation & Functionality: A clear benefit of an automated system is that it allows collected data to be used more effectively. The collected information is standardized, consistent and can readily be used to generate reports that identify progress, both at the employee level and company-wide. Moreover, an automated system can also be an asset for other HR functions, such as hiring. Essential job skills and definitions originate from this central location, and training and development materials can be distributed with participation “certified” through the system.
- Boosting Employee Performance & Satisfaction: The top performers in a company add to its value; the underachievers drag that potential value down. Also, employee compensation can be complicated; for example, it may be a mix of base pay, bonus and equity. An automated system, which measures progress in real-time, can explain to employees what needs to be accomplished to trigger additional compensation. Simply put, it can provide a target and measure progress towards that target. This provides motivation. And the company will be better able to identify its top performers and compensate them accordingly.
As you are evaluating your prior year performance appraisal process and looking ahead to how it might be improved in 2013, consider implementing an automated performance management system. Oasis now provides such a system, which is integrated with our payroll/HRIS. Many clients have already started to reap the benefits of this service. Without the features available through this performance appraisal technology, it may be challenging to get real value from the appraisal process.
Contact Oasis Outsourcing at 866-AT-OASIS (866-286-2747) or visit us online at www.OasisAdvantage.com.