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DOES YOUR TALENT STRATEGY REALLY DRIVE EMPLOYEE PERFORMANCE? Silo-ed HR operations and disconnects in data could be holding you back.

Organizations are notorious for under-utilizing the talent that they have. Today’s various human capital-related systems all capture data, but rarely is it synthesized in a way that capitalizes on the skills and knowledge that the individual brings to the organization. While discrete silos of information exist – such as within the hiring management system, the training management system, the HRIS system or the performance management system, etc. - how can the employer today get the full picture of the employee? This Vital Analysis White Paper identifies the advantages to organizations of creating and using a “big picture” view of their employees.

DOES YOUR TALENT STRATEGY REALLY DRIVE EMPLOYEE PERFORMANCE? Silo-ed HR operations and disconnects in data could be holding you back.

Executive Summary Bombarded with new technologies and recession-induced changes in the world of work, businesses have lost sight of a key tenet: knowing and understanding the individual in the workplace. Computer technology had frequently resiloed specific tasks and activities, causing the talent managers to lose sight of both the “big picture” of the employee and the “big picture of the organization.” What happened? 



New technologies came into play that addressed activities previously done manually These technologies were often standalone, leading to fragmented business processes. Integrated solutions addressed these issues technically: now HR professionals must realign themselves to meet the requirements of a changed work environment.

Organizations are notorious for under-utilizing the talent that they have. Today’s various human capital-related systems all capture data, but rarely is it synthesized in a way that capitalizes on the skills and knowledge that the individual brings to the organization. While discrete silos of information exist – such as within the hiring management system, the training management system, the HRIS system or the performance management system, etc. - how can the employer today get the full picture of the employee? In the same way a CFO talks about one version of financial truth as he or she looks at the revenue or earnings of the company, today‘s organizations benefit from a ―version of the truth‖ about an employee. In today‘s organizations there are far more likely to be many versions – all with information about the employee—but none presenting in one place a single vision of that employee in the organization. This Vital Analysis report reviews the improved business practices that can result when a performance management solution presents a ―single version of the truth‖ to the organization.

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THE BUSINESS VALUE OF KNOWING YOUR WORKFORCE This concept sounds simple, doesn‘t it? But often those who work with only one aspect of the individual fail to see the whole picture of that individual ― when that picture would be useful. The cause: deployment of fragmented applications. These applications exist throughout the organization, ranging from sourcing, hiring, onboarding, performance evaluation, learning management, salary history, to total rewards—often disparate and disconnected. In order to create a talent-driven environment (that begins before the candidate even walks in the door), you will have to be able to know the skills and competencies that a person brings with him or her. The data around the individual grows as the employee cycles through the organization, gaining new skills, getting bonuses or rewards, taking training, changing positions or roles, or participating in outside volunteer work, to name a few. Not only do employees‘ capabilities change over time, their career needs and wants also change. For example, workers may at times want more challenging assignments to foster career growth. To ensure that this growing circle of data about the employee is sustained and available to those who can benefit in decision-making through that knowledge, one employee statement of record must exist. This integration is accommodated by technology. Without it, employee management is piecemeal, and decisions concerning the workforce remain in silos and hence ineffective. A key reason to go beyond standard data collection (and really know your employees) is the fact that 71% of those employed throughout the recession of 2008 – 2011 reported that they planned on ―jumping ship‖ once the economy improved and were increasingly aggressive in seeking positions elsewhere.1 45% reported a decrease in loyalty to their employer, demonstrating the recessionary impact on a trend that has been rampant for some time.2 Never has there been a time when the value of knowing your employees has been more crucial. Better firms must act now to identify, know and retain all employees, not just their high performers. It is acquisition and integration of employee data that makes HR and business management excellence coalesce. We see the traditional areas of data collection (Figure 1), often in separate databases or files, and we see the bigger areas that can only be determined by ―connecting the dots‖ on the

1 2

The Recession from the Worker’s Perspective. Human Capital Institute and Monster. 2009. Page 7. Ibid. page 8.

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information available about the employee. Silos must be surpassed for HR to ensure:    

Alignment between corporate goals and the individual‘s goals Retention risks are identified and mitigation methods crafted The capability to measure the brand value the employee is bringing to the company through his or her outside or volunteer activities The validation equity and fairness in relation to total rewards.

Figure 1. Value of Integrated Talent Management Solutions

Source: Vital Analysis. 2011.

Today‘s organizations recognize the need to align their workers activities and behaviors with the broader goals of the business, and many have acquired radically improved integrated talent management solutions to do so. Integrated software solutions allow important new levels of transparency in understanding corporate talent ― allowing enterprise-wide visibility to employees worldwide. Only through these solutions can HR professionals Copyright 2011. TechVentive, Inc. Unauthorized reproduction, storage, transmission or quotation strictly prohibited.

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achieve a true ―big picture‖ of their talent, and have the data necessary to plan for the future.

THE CHALLENGE: CREATING A SINGLE VERSION OF EMPLOYEE TRUTH Moving to that big picture view of the workforce starts with a review of current conditions: Employee data is collected in many different areas, often in different technology applications, as that employee traverses his or her career through the organization. Data silos create ―disconnects,‖ as we discuss here, between sourcing, hiring, onboarding and performance management.

Disconnect 1: Sourcing and Hiring Data about an individual starts being accumulated before they enter or perhaps even know about an organization: a recruiter may have done a search on talent types and located the individual at work in another company. Referred to as a ―passive candidate‖—talent that is currently not actively seeking a job ― these individuals are often the first to be contacted with a position suiting their skill sets open up in an organization. But what happens to this information? Where do today‘s recruiters keep the information they glean from social networks, for example, such as LinkedIn, Facebook or others? Likewise, when recruiters get a lead on a good candidate from a colleague or employee, where does that information go? Few HR systems possess the ability (or a place) to retain this information. Is it attached to the social information gathered? Unlikely. It is more likely to be retained, if at all, on a Post-It Note. When an individual applies for a position, it may be the first body of information a company captures about the potential employee. Whether it is an application for a specific posted position or to the company in general, there is data gathered at the time of application that is seldom looked at or used within the company again. This is one of the largest wasted areas of employee information today: it sits as resumes, forms, test scores, transcripts and recommendations in files that are unused within the organization thereafter.

Disconnect 2: Onboarding On-boarding should include a clear review of the specific objectives of the new hire and ensure that he or she feels prepared to start the tasks at hand—or address the learning needed to fill any gaps. But the conversations in onboarding, at best, may be no more than a review of what the employee

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should do for the rest of the week and a handshake. There is unlikely to be any review of the initial job posting to which the candidate was hired; rarely is even the description of the position as advertised retained with the employee who was hired to fulfill it. Given time lags between job posting and the new employee appearing at work, the view of the position may have changed quite radically in the eyes of the hiring manager. New employees often report that they wondered as they walked into work if they had actually been employed for the positions for which they originally applied.

Disconnect 3: Managing Performance In the old days, employee performance management was an event, usually tied to salary increases, in which a manager reviewed the past year‘s progress or lack thereof with a generally nervous employee. The goal was to mete out praise (but not too much), and create some goals for the individual for the coming year. Such reviews were generally forced upon managers, not at all timely, and provided little value to either party. Furthermore, the objectives were not at all tied to the overall business or mission of the organization: they did not provide employees with a sense that they were part of a whole greater than their immediate department, and certainly did not align their future work with the goals of the corporation. The performance review information, housed in files with HR and never looked at again, was used mainly for merit increases in salary or a compliance exercise for weeding out underachieving or unsuccessful employees from the organization. The information was not tied to the skills the employee entered the organization with nor what he or she may have added to that skill set since joining. This data was captured in and maintained in a separate training database or a learning management program. Often the employee‘s manager knew only that the employee went off to a class ― but never knew how well that employee succeeded in it. Whether or not the class attended actually met the gaps in the employee‘s knowledge to fulfill a task on the yearly list of objectives was often never known. Using the performance management tools of today, all that can change.

PERFORMANCE -DRIVEN TALENT MANAGEMENT Alignment may be the most popular word of the decade in HR circles, as managers are told to focus on a cascading set of goals that eventually will dictate optimal performance at the individual contributor level. Often stemming from a corporate scorecard, the overriding goals of a business generally fall into four major areas: Copyright 2011. TechVentive, Inc. Unauthorized reproduction, storage, transmission or quotation strictly prohibited.

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a. b. c. d.

Customer relationship improvement and retention Operational efficiency Product or service excellence Revenue growth or cost cutting/containment

The components of the corporate scorecard define the big picture for the entire company; the talent management record â&#x20AC;&#x2022; the system of record for the employee â&#x20AC;&#x201D; provides the big picture of the employee in the company. All departments in a company relate to one of these four areas â&#x20AC;&#x201C; as does each employee, often with goals that touch multiple corporate goals. Alas, there is a fallacy with the implementing this ideal. There is a subtle difference in an aligned and a true performance-driven organization. Even when goals from the executive are cascaded to the rank and file, (hence aligned, as most define it), they may not foster the anticipated high performance from the employee. Corporate goals and individual goals are often intermingled at the higher elevations of the waterfall, diluting or at least confusing the articulation of the goals for employees at the bottom of the rapids. True alignment only comes into play when the work of the group and individual is totally in synch with the business goals of the entire organization The degree of emphasis on the four primary business goals (operational, customer, product, or revenue excellence) varies and changes over time, thus the individual or group objectives shift as well. It is these goals that should drive tasks and activities as they trickle down the corporate hierarchy. Corporate goals color individual goals, as in the example below (Figure 2), where the ability to open a new office (expanding revenue) may rely on training a top manager to learn the language of the locale. If the big picture of corporate intent is lost in the goal setting process, the manager may set the employee off on a tangent (activities, projects or learning objectives) that really to not line up with any of the overriding corporate goals.

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Figure 2. From Corporate to Individual Goals

Corporate Goal

Division Goal

Dept. Goal

Individual Goal

•Increase Revenue Growth

•Create a new division for sales in France

•Hire sales and marketing people in Paris

•Learn French adequately to open and staff an office abroad

Source: Vital Analysis. 2011.

Make Your Metrics Matter Human Capital Management professionals have reached new heights in becoming data-driven ― or at least driven to collect data. But amassing data for its own sake, or collecting numbers on things that are easy to count may not help the organization become more successful. Numbers of open positions, time to hire, sources of new hires, or turnover rates all have a place ― but what data can really drive your organization‘s performance? Generally, corporate-level goals include at least four key areas mentioned above, for example:    

Create and maintain superior relationships with customers Run the organization efficiently and economically Increase revenue Design and develop innovative, better, or less costly products or services

Metrics madness has overshadowed the reason HR started collecting metrics in the first place: to make better business decisions.

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What You Can Do: If you have never

mapped your HR strategy against a corporate balanced scorecard, it’s time to do it. If you’ve done this exercise before, it may be time to revisit it. Make sure your scorecard includes relevant talent management metrics – metrics that are synchronized with current business strategies and the current business environment. Do your metrics demonstrate the link between employee performance and corporate achievement?

What metrics about the workforce will help executives make the best decisions in these or similar goals? While HR leaders understand aligning employees‘ goals with corporate goals for improved results, they themselves have to deliver the data that demonstrates levels of achievement, and alignment of, for example, a training initiative with better customer intimacy or increased sales. For HR metrics to matter, they have to provide input into business decisions. Rather than considering all operational numbers as metrics, devise strategic key performance indicators (KPIs) in measurable areas that are vital to executive decision-making.

The performance delta you want to measure lies between the goals and their successful execution. Those are the metrics that really matter.

THE MOVE TO A NEW EMPLOYEE STATEMENT OF RECORD A single employee view should provide a complete life cycle account of an employee that can proactively guide development, ensure productivity, enhance engagement, and drive retention. Because of these requirements, increasingly the employee statement of record is shifting from the HRIS to the talent management system. Why? To present an actionable ―big picture‖ view of the employee in the organization. Successful HR practitioners want to understand the total scope of their organization and be able to provide a holistic view of each employee in it. This necessitates a whole new view of the workforce, a view with two-way transparency – of the employee from all those working with him or her, and of the organization from the top levels to the entire workforce. Today‘s integrated talent management systems indeed provide that view of the employee‘s life cycle within the corporation, relying on information that would not be attainable from fragmented performance management applications. The challenge is now to put that ―big picture‖ of talent to work. Integrated employee information is the first step: Visibility is required into all aspects of the employee. Growth in skills, knowledge, increasing acceptance of responsibility, tangible and intangible value to a group or the wider organization are all aspects to be retained. Integrated systems allow more Copyright 2011. TechVentive, Inc. Unauthorized reproduction, storage, transmission or quotation strictly prohibited.

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complete understanding of the employee than existed previously, allowing all those who work with the employee and with employee data to both see and do more. Talent management systems have blossomed into the de facto employee system of record within many organizations, because they have captured and retained the objectives for an employeeâ&#x20AC;&#x2DC;s position, the success that employee had in meeting those objectives, and the total history of the employee in the organization â&#x20AC;&#x2022; training results, positions held, awards won, and the like. Because it is integrated and accessible, the value of the information has far greater potential use than ever before. Only now can HR leaders truly become responsible for the organizationâ&#x20AC;&#x2DC;s lifeblood: its talent.

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Vital Analysis reports are generally available to Vital Analysis clients only. Public access to this report was made available through the sponsorship of Halogen Software. We hope you enjoy this document and share it with colleagues.

Getting a ‗Big Picture‘ View of Talent Management that Truly Drives Performance Halogen Software‘s talent management suite is purpose-built from the ground-up to drive employee performance, and supports the best practices outlined by Vital Analysis. Halogen‘s organically built Talent Management Suite uniquely connects performance to all functional areas: recruiting, compensation, succession and learning and development – helping organizations build world class workforces that deliver better business results. For more information on Halogen Software‘s Talent Management solutions visit: www.halogensoftware.com

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About Vital Analysis

Vital Analysis is a very different kind of technology research organization. We are the intersection set where exceptional technology market knowledge meets the executive suite. Where other ‗analysts‘ replay vendor press releases, we give you the:  impact new technologies will or won‘t have on your business  reasons why you should or shouldn‘t care about specific emerging solutions  business justifications why you may or may not want specific solutions Vital Analysis was carved out of TechVentive, Inc. in 2007 as a new, but complementary business. As designed, Vital Analysis is the publishing, research and analytical arm of that company. Our reach, like our blog readership, is truly global. We‘ve consulted with top technology executives in Australia, Brazil, Canada, United Kingdom and the United States. We‘ve been briefed by technology providers from virtually every corner of the planet. About the Author Dr. Katherine Jones, an industry analyst with Vital Analysis, is the founder of Independent Consulting services (ICS), serving technology and service-providing organizations with marketing, strategy, and talent management consulting services. Jones was a research director at Aberdeen Group in Boston for eight years, focusing on research and consulting services in talent acquisition and workforce management, ERP, and mid-market companies. In charge of Aberdeen's Human Capital Management practice, Jones‘ research covered talent acquisition, employee performance management, the hiring, retention and management of the hourly and contingent workforces, ERP in the Small and Mid-Sized Business, Human Resource Outsourcing (HRO), sales performance management, and issues of workforce hiring and management, workforce optimization, and employee retention and succession. Today, she provides research and consulting services in business applications, on the fundamental processes of business operations and strategy, and the effects of technological change and innovation on these processes within the global organization. In addition to ERP and Human Capital Management expertise, she specializes in the business advantages of SaaS and Cloud applications. A veteran in enterprise applications, Jones has been responsible for technical product marketing and strategic alliance management in several computer companies since 1984. Prior to a high technology career, Jones was a university dean, involved in academic administration, research, and teaching. She welcomes your thoughts and invites you to contact her at kjones@vitalanalysis.com or Katherine_ICS@msn.com

Reproduction of this publication in any form without prior written approval is forbidden. The information in this report has been obtained from sources believed to be reliable. TechVentive, Inc. disclaims all warranties as to the accuracy, completeness, or adequacy of such information and shall have no liability for errors, omissions, or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended result. The opinions expressed herein are subject to change without notice.

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