Gireesh Sharma
I am Sr. Business Analyst with EmpXtrack - On Demand Human Resources management Software. Web: http://www.empxtrack.com
Utilizing Employee Performance Appraisal Systems optimally?
Introduction
An employee performance appraisal process runs a few times during the year. If designed appropriately, significantly more information can be captured and analyzed by organizations. This may require some modifications to the appraisal instrument such that it can be used for employee feedback, self development and studying the rating patters of supervisors besides a host of other analytics.
What more can be done by organizations in utilizing this important process is a focus of this article.
What most organization currently do!
Employee performance appraisals are generally being used by most organizations to:
- Evaluate employee contribution to the organization based on the goals assigned to them.
Employee Training: A Management Perspective
How does the management view employee training and what do they expect from it? This was a question which intrigued us; we wanted to understand how senior employees looked at the training function from a strategic perspective.
This article captures our discussions with employees of many companies in line functions as also with the Management cadre employees and the HR & Training departments. We wanted to understand what companies did post the employee evaluations, during succession planning, manpower planning, recruitment and training budget allocation process.
The rest of the article discusses our approach and insights gained.
Key questions asked
- What is the training process followed by the organization?
High Performance Companies Focus on Performance Management
We often listen from the successful business leaders that “People are our strength”. Recently I read the book “The High Performance Entrepreneur” written by Subroto Baghchi. He is co-founder and Chief Operating Officer of Mindtree Consulting, one of India’s most admired software companies.
Mindtree has grown from 0 to 3500 people and crossed $ 102 Million in revenue, all in six years, making it one of the highest performing companies in India.
Based on Subroto’s personal experiences, the book is all about entrepreneurship and how an organization can achieve high growth. Being involved in development and implementation of Performance Management Systems, one paragraph caught my attention.
Under chapter “Getting Good People and Keeping Them”, Subroto says’ “I can never overstate the importance of five things in managing high performance professionals: setup a performance management system that everyone understands, communicate with people with evangelical regularity, listen to the voice of your people through forums and regular perception surveys that are conducted by an outside agency, focus on development of leadership and finally create a support network for your leaders. If an organization knows how to do these five things right, it can scale without breaking up.”
Post-Recession Challenges of Talent Management
Recovering Economies
After a year or so the news on recession is taking a U-turn (not a V-turn though). Officially, analysts are reporting that recession is over, including Google CEO. While it will take some time for recession to pave the way for prosperity and growth for business in general, the prosperity is already on its way to certain economies such as BRIC (Brazil, Russia, India and China).
HR May be Caught Off Guard
Although this is good news for business operations, including marketing and sales, it poses new challenges for human capital. Businesses would no longer run on the old rules, but new out-of-the-box solutions, more comprehensive efforts, innovative thinking, and new skills and competencies would be required to grow and prosper. Needless to say, the demand for both the quantity and the quality of talented employees will grow worldwide. Companies that have fired employees in the past are already feeling the pinch, as they do not have enough bandwidth to execute.
Bloggers like Jon Ingham, who champion the cause of Human Capital Management, are being invited to speak on performance management. The need for performance management is pressing.
Talent Scenario During Recession
The law of demand and supply mercilessly applies to human resources, also. During the economic downturn, companies were able to downsize by getting rid
Getting the Performance Appraisal Right
Most companies want to appraise their employees on a periodic basis and their Human Resources department is generally responsible to manage this process. I have often seen that the buy-in and participation from the Line managers is not as much as one would expect. Based on my meetings with a large number of HR managers, Line Managers & Senior Level Executives, I have come to realize that there is much more to a Performance Appraisal than what is truly understood by all stakeholders.
This article discusses how HR Managers can create a Performance Appraisal System that adds true value to the organization and becomes a useful and strategic employee development tool.
Define the Objectives
Do HR managers understand why organizations need to carry out the Performance Appraisal process? Some of the common reasons are:
- Salary Increments: Commonly believed to be the only purpose from an employee’s perspective and typically the least important from the management’s perspective.
Variable Incentive Plans: A Motivation & Retention tool
Since the past two years Variable Incentives did not work very well since most employees wanted the security of a high base-pay and meeting targets was largely unpredictable. The economy is on an up-swing again and employers & employees see new opportunities for increasing incomes.
Organizations want to curtail their fixed costs, hence salaries may not increase dramatically and immediately, but Variable Incentive Plans are coming to the fore to retain high-performers and encourage achievement.
ROI on automating the Payroll Function
It is difficult to anticipate the benefits of taking your payroll online. This was a challenge faced by one of our recent customers where the HR department found it challenging to estimate the ROI derived from implementation of an integrated Payroll software.
This article describes some of the benefits analyzed and presented to the senior management such that critical purchase dollars were allocated for the procurement.
The exercise which started as a small initiative actually helped me dive deeper into how a CFO or CEO perceive their human resources department and what are their expectations from an HR platform.
What I will share here is a small part of the study in how organizations are managing their human capital assets and the challenges being faced versus what are the best practices. In this, I will share what are the different metrics and how can organizations save costs in this critical area.
Elements of ROI
To determine the ROI, we had to first understand how the payroll process works in a manual environment. Our interactions revealed that there are three distinct steps in the successful processing of a payroll which are:
- Data gathering
High Performance Companies Focus on Performance Management
We often listen from the successful business leaders that “People are our strength”. Recently I read the book “The High Performance Entrepreneur” written by Subroto Baghchi. He is co-founder and Chief Operating Officer of Mindtree Consulting, one of India’s most admired software companies.
Mindtree has grown from 0 to 3500 people and crossed $ 102 Million in revenue, all in six years, making it one of the highest performing companies in India.
Based on Subroto’s personal experiences, the book is all about entrepreneurship and how an organization can achieve high growth. Being involved in development and implementation of Performance Management Systems, one paragraph caught my attention.
Under chapter “Getting Good People and Keeping Them”, Subroto says’ “I can never overstate the importance of five things in managing high performance professionals: setup a performance management system that everyone understands, communicate with people with evangelical regularity, listen to the voice of your people through forums and regular perception surveys that are conducted by an outside agency, focus on development of leadership and finally create a support network for your leaders. If an organization knows how to do these five things right, it can scale without breaking up.”
What Web 2.0 and SaaS Software offer that Legacy ERPs do not provide?
In the last few years, Web 2.0 and SaaS have captured a significant portion of the market led by legacy ERP systems. Even large enterprises (which only showered their love on ERPs) are now accepting the value of SaaS application over legacy ERPs.
A survey about SaaS conducted in August 2009 by Business Week Research Services found that four out of five managers and senior executives in North America are either interested in, or in the process of, adopting the Software as a Service approach to information technology. In fact, roughly a third of the 326 respondents’ companies have already fully or partially adopted the SaaS approach for at least one application. Read more …
What is in SaaS that is enticing senior executives from all streams of management (IT, finance, HR or S&M), apart from cost benefits? Talent Junction explores eight key features of SaaS applications that are usually missing in traditional ERP software.
1. Usability: Web 2.0 SaaS software cares much more for usability than its older cousin ERP did. Vendors have understood the value of usability to end-users and are committing more budgets in analyzing the user behavior while working with the software.
Using this analysis, developers continually re-engineer the design to make it more usable. Menu structures, buttons, messages, user interface, and even application colors are chosen keeping web conventions in mind.
Read more about usability from expert Jacob Neilson.
2. Intuitive Graphic User Interface: SaaS and Web 2.0 applications are far more intuitive than legacy ERP systems. The actions, buttons, messages, etc. communicate to users in a way that most can understand what to do next. Graphics, images, and icons all are designed to convey meaningful and user-friendly messages.
The intuitive interface of SaaS application significantly reduces training needs. Thus, for large organizations, where training multiple teams requires big budgets, SaaS applications are a money-saver.
I would love to share a comment from a happy customer who uses SaaS application for Performance Management “We made the decision to roll this out without any training. Our employees took to it without any effort. We did so without any special training for employees. They all found it easy to manage and intuitive. We’re very happy with the end result.” Read the complete comment here…
3. Collaboration: With the advent of social media and its impact on businesses, collaboration is seen as a tool to develop social learning within the organization. Web 2.0 and SaaS software is significantly advanced in terms of facilitating collaboration among the user community. These applications allow users to share insights, comments, notes, references, and documents within the user groups. The use of such applications not only improves employee productivity but also enhances social learning within the organization.
4. Global Accessibility: With the rising culture of working from home, flexible working hours, etc., the need for anywhere-access to productivity applications is really pressing. SaaS software has made this a reality. As most SaaS-based applications are accessible via Internet, the access to application is global. Anyone who has access to Internet connection can use the application and be productive. Then, why wouldn’t executives and leaders love SaaS?
Note for Security paranoids: A SaaS application can also be installed on a secured server (with https:// access) and for companies who need high security levels, the access to employees can be routed via virtual network.
5. Configuration Outbids Customization: Another novel feature that SaaS model brings to business applications is its ability to configure the application instead of customization (which requires a software programmer to change).
A configurable SaaS software allows users and administrators to set their own preferences, enable or disable a feature, change the user interface look and feel, etc., thus significantly reducing the need for customization. This is achieved by stuffing more and more features into the application (often more than what a single customer can think of and use) and allowing the client to use or discontinue a feature by merely toggling a check box . Now customers have better control on the application that was non-existent even in big ERPS.
6. Feature /Technology Mass Upgrades: SaaS overcomes one of the biggest handicaps of the legacy systems – features and technology upgrades for mass users.
Most SaaS applications use a common base architecture (except a few pieces that are used for individual configurations). SaaS vendors are engaged in continuous R&D on the base application. New features and functions are added to the base application. As base upgrades for all customers, everyone can start using new features and functions (if they desire to do so). And there is no need to worry about the impact of configuration settings as configuration settings are managed in separate pieces.
This mass upgrade also helps vendors to offer new features at comparatively low cost. To exist in the market, the vendors of SaaS applications have to continuously innovate & provide to the client not only new features but better services. Thus quality improvement is an unending process in the SaaS environment.
7. Zero IT Hassles for Clients: The biggest beneficiaries of SaaS are the IT managers.
In ERP systems, vendors developed the application for clients and IT managers were primarily responsible for maintaining and troubleshooting the systems, with vendor providing technical support on the basis of SLA. This had exposed IT managers to many challenges – mainly due to lack of technical expertise on a particular ERP system. They heavily depended on vendors for simplest of troubleshooting.
SaaS, on the other hand, has relieved IT managers of the application maintenance burden, as the application is maintained by the same vendor who developed it and has ample qualified resources available for troubleshooting. The improvement in application uptime significantly improves the end-user productivity.
8. Higher Security Levels: Unlike legacy ERP, SaaS applications share resources (hardware, servers, and security solutions) for multiple customers. This enables the SaaS vendors to acquire high efficiency and high-security platforms to host applications, something which is not financially feasible for single customer (if they are not a billion-dollar company). Thus, even small and medium businesses enjoy the features that so far only big businesses could afford. This makes SaaS software a natural choice for enterprise management.
What Next: If you are looking for a usable, intuitive, configurable, collaborative, and highly secure Web 2.0 SaaS application for your human resource department, I would invite you for a demo of EmpXtrack. The founders of EmpXtrack have consistently worked on these features since the inception of the software, by involving researchers and experts to enhance SaaS factors.
Post-Recession Challenges of Talent Management
Recovering Economies
After a year or so the news on recession is taking a U-turn (not a V-turn though). Officially, analysts are reporting that recession is over, including Google CEO. While it will take some time for recession to pave the way for prosperity and growth for business in general, the prosperity is already on its way to certain economies such as BRIC (Brazil, Russia, India and China).
HR May be Caught Off Guard
Although this is good news for business operations, including marketing and sales, it poses new challenges for human capital. Businesses would no longer run on the old rules, but new out-of-the-box solutions, more comprehensive efforts, innovative thinking, and new skills and competencies would be required to grow and prosper. Needless to say, the demand for both the quantity and the quality of talented employees will grow worldwide. Companies that have fired employees in the past are already feeling the pinch, as they do not have enough bandwidth to execute.
Bloggers like Jon Ingham, who champion the cause of Human Capital Management, are being invited to speak on performance management. The need for performance management is pressing.
Talent Scenario During Recession
The law of demand and supply mercilessly applies to human resources, also. During the economic downturn, companies were able to downsize by getting rid of redundant work force and dead wood. They also restructured the employee compensation (mostly by decreasing) to stave off financial losses. Only those employees were retained who proved their worth. The employees had to accept all kinds of compensation-related compromises while maintaining the same or even higher level of efficiency and productivity. They could thus survive the financial tsunami.
These survivors got the opportunity to handle a variety of tasks that further sharpened their skills and made them multi-skilled. Thus, overall quality of talent has increased. At the same time, those who were out of job lost this opportunity to hone their skills in a new challenging environment. Adding to our woes, slashing of training and development budgets has led to a depletion of the number of skilled employees within the companies.
And a Difficult Road Ahead
Such steps from companies have created an altogether tricky scenario: The quality of talent within the companies has increased (raising the bar of the talent), while the quality of skills available in job market has dwindled. Now, recruiters can hire the required quality talent not from outside but from inside their competitors’ workplace.
While many have forgotten the term “War for Talent”, the phenomenon is slowly re-emerging. “A study by Accenture has found that more than two-thirds of executives are now deeply concerned about not being able to recruit and retain the best talent. In today’s global and highly competitive economy, the war for talent is now global, not local. The survey of more than 850 top executives from the U.S, UK, Italy, France, Germany, Spain, Japan and China found worries about talent management were growing, with 67 per cent this year putting it second only behind competition as the key threat, up from 60 per cent last year.” Read more.
It may be worth noting that great companies such as Infosys, responded to the downturn by investing more in training. Instead of fearing of financial losses, these corporates focused on improving the quality of their employees’ skills. And the effect is visible in their financial results. Member of Infosys’ board of directors and head of HRD and Education and Research, T V Mohandas Pai said, “In response to the economic crisis, we had stepped up our investment in training. This has made us more competitive in fulfilling clients’ needs today.”
The demand for talent in the market will never cease. Retention will always be a challenge.
New Definition of Talent
While war for talent continues, the bar for talent also goes up. Old skills and competencies may not work. Companies now need salesman who does not sell products but does sell solutions; production managers no longer control the operations, they are expected to innovate and improve productivity; and quality managers need to study competitive products with more zeal and help develop better products and services. The employer’s expectations have changed and are set to grow:
- Highly Productive: The talented employees needs
to be highly productive. They should deliver much more than they are compensated for. If that happens, employers are willing to give larger share to them. - Multi-Skilled: Companies have discovered that one way to decrease recruitment cost is to have multi-skilled employees. Multi-skilled employees help reduce manpower dependence, and the overall sum of all the multi-skilled employees is greater than the same number of equal number of specialist.
- Self-Managed and Self-Motivated: Self-managed and self-motivated employees reduce managerial efforts. This helps organizations to have less number of managers.
- Innovative and Out-of-the-Box thinkers: As the rules of the business change and competition increases, the existing solutions no longer work. Companies need employees who constantly infuse new ideas and provide out-of-the-box solutions to meet customer needs that seems to have no end.
The Key to Retain Talent Lies in HR Policies and Practices
As organizations increase their expectations from employees, employers too have to significantly change the way they manage the talent. Talented employees continuously need new challenges and goals they can achieve, and a continuous supply of information and resources they can use to solve business problems. And needless to say, they will in return demand more lucrative and effective compensations, a great work culture and friendly HR policies.
“Even during the recession, companies are reviewing and revising their leadership development programs. Survey after survey indicates that people who quit their jobs do so because of their relationship with the boss, not because of dissatisfaction with their job. A recession is a perfect time to take a hard look at leadership style and training to increase employee satisfaction with management.” Read more.
Five Important Talent Retention Factors
Lets us consider five factors that can help organizations retain talent to meet the client and business requirements in post-recession era:
- Clear Goals, Targets and Expectations: You need to tell them what exactly you expect from employees and what should they do to meet these expectations. A talented mind without a direction is most likely to pull the plug than a mediocre or a dead wood.
- Balanced Work Environment: Talented employees have huge positive energy and they exhaust this energy to meet the deadlines. But often they need time to re-energize themselves. Organizations that want to retain talented employees need to provide a positive environment that allows them to re-energize themselves more often.
- Track Performance Goals and Provide Analysis: Innovators and hard workers need constant motivation to perform better. They need to know whether they are producing desired results. Any suggestion of not being able to deliver throws them in doldrums. One way to let them know about their performance (whether improving or declining) is to point toward specific results, achievements or failures (which they can fix before it is tool late).
- Fair Evaluation of Performance: At the end of the day, the high fliers want to get acknowledged for their work. The first acknowledgment of the hard work is a fair and formal appraisal of their performance. They should be specifically told where they met expectations and where they did not.
- Compensation to Maintain a Decent Lifestyle: Employees who deliver quantity with quality also expect from employers fair compensation that is compatible with the market. If not first, compensation remains the second most important cause of brain-drain from organizations.
What Next: EmpXtrack Performance Management is a powerful package of tools to help you set SMART goals and targets, track goal achievement, evaluate performance at quarterly, half-yearly and annual intervals, and decide decent compensation for your talented workforce.
Difference between the SaaS and Perpetual License Structure
HR Managers and CTOs often ask us the benefits of SaaS over Perpetual license of EmpXtrack.
Here is a comparison chart:
| SAAS (Hosted) Licensing Structure | Perpetual Licensing Structure | |
| Cost of Software | Lower Cost | Can go as high as 4 times the SAAS license cost |
| Payment Frequency | Annually | One time |
| Annual Maintenance Cost | Nil | To be incurred by the Client (can vary between 30% -50% of the cost of the software) |
| Hardware Costs | Nil | To be incurred by the client |
| Implementation Cost | Nil | To be incurred by the client (Can be 15% upwards of the total cost of the software) |
| Data Back Up | Data backup managed by us | To be managed by the client |
| Personnel Cost & requirement | We would maintain it for you. | To be managed by the client |
| Security | Our responsibility | Client has to manage data security, access etc. |
| Upgrades | Upgrades to servers, software, databases, application managed by us and provided automatically | Client has to manage all upgrades |
| Infrastructure | We manage the servers,networks, provide scalability and access, performance tuning and application management | Client has to manage the infrastructure, servers, networks, performance tuning etc. |
| Access | Clients can access the application on-demand from anywhere. Note this can be managed based on specific needs. | Typically access is limited to client intranet. |
Employee termination or firing – HR’s role is critical!
Termination or firing employees at work is a not-so-liked but mandatory process at business. All businesses big or small at time terminate or fire employee because of business compulsions. However, the recent downturn has accelerated the employee termination largely due to financial and performance problems.
Decision to fire an employee is never welcomed, however, there are some acceptable reasons for terminating an employee:
- For poor performance at work or low productivity.
- Being indisciplined or showing unethical behavior at work.
- Not conforming to the company policy.
Above reasons are well accepted by other employees, business community and also by the legal framework of the country and states for growth of business.
Free Human Resource Software Download Facts
Free HR Software also attracts us. Internet is flooded with lots of contents on Free HR Software. Type in google and you will have 100s of results (But what these results fetch is a question.) However most new and even old Internet users fell in the trap of Free HR Softwares. Recently, one of HR Professionals I met with told his horror story of Free HR software and how it risked his data, computer and job. I would not disclose the story here, but It motivated me to look into the case of Free HR Software, if it really exists.
After some research I wrote a complete article on it. Here are the findings….
To find the truth, I searched for “Free HR Software” on Google. Look, what I got:
Result 1: First result took me to a site which was displaying Google Advertisements all over with three paragraphs using keyword “Free Hr Software”. Brute SEO.
Result 2: Second result took me to a HR Vendor giving Free 30 Days TRIAL version.
Result 3: Third result took me to an Open Source Software. I downloaded it and even with three days effort I could not install it on my computer due to lack of knowledge of My SQL/ PHP . Only one of my friends who is a software engineer could install it for me. He charges US$ 50 per hour from his clients.
Result 4: This result took me to a site giving FREE DEMO of the software.
Result 5: Again a Google Adsense blogger with lots of Free HR Software text on his page.
Result 6: Next result offered Free Software DEMO only.
Result 7: Some article about HR software.
No more patience…my friend.
If people are your most important asset, your HR Data is equally important. Read more about myths and facts of Free HR Software on my blog Talent Junction or click below:
Free Human Resources (HR) Software Download | Talent Junction – An HR Blog
Free Human Resources (HR) Software Download Facts
Free HR Software
Many visitors on EmpXtrack’s website come to look for Free HR software. Because there are many softwares in different domains that come for FREE, they expect that there can be a Free Human Resources Software too. This post will discuss “Is there any free lunch (software) at all?” for Human Resources Management. I will also try to bust the myths about the softwares that are available for Free.
Writing SMART Goals (also called KRAs) from Job Descriptions
Many Managers (Including HR managers responsible for writing others Goals) often ask to help them on creating Goals (Key Responsibility Areas) for different designations, which they can use for setting Goals and/or conducting performance appraisals. While most of these managers are completely aware of their job profile, they find it difficult to shape it in a written form.
