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It's Time for an Upgrade
Wednesday, December 23, 2009
It's Time for an Upgrade
The following story was described by Kellie Pauley, director of client success services for talent and performance management software provider Cornerstone OnDemand.
Client: A United States–based distribution services company with approximately 5,000 employees.
Problem: The company was using an ineffective manual performance management process that had been in place for years, and was seeking a system overhaul.
Cause/Diagnosis: The manual process resulted in inconsistent performance data because different employee groups used various performance forms and scales. The process was also highly subjective. Executives with the strongest personalities were awarded the bulk of the merit pool based on persuasive arguments for why their teams deserved the biggest increases. With the absence of data to support true performance, combined with a lack of process visibility, objectivity went by the wayside, and inequity thrived.
Method/Tools: Cornerstone OnDemand partnered with the company to reengineer its manual performance management process into an automated system. Three key factors for success were established:
- Process design. The new process was designed to be as simple and straightforward as possible, involving all appropriate data and people at the correct workflow points, based on the organization's specific business and cultural needs.
- Workflow vetting and pilot testing. A pilot-testing process was created to account for potential organizational changes (for example, employee promotions) that could affect the system.
While the previous manual process could account for these new changes, the automated process follows repeatable and predictable logic. The pilot group tested the process to account for variable factors. The test was launched to 200 people who provided ideas for improvement.
- Communication and change management plan. Managing performance can be uncomfortable, so people try to avoid it altogether. While a manual process can perpetuate avoidance, the high visibility of an automated system creates a natural "Big Brother" sentiment. To manage initial resistance to the new process and to ensure its success, the changes must be communicated well. Cornerstone taught employees not only the logistics of the new system, but the benefits, including data privacy, instant access, comparative reporting, and personal accountability. Additionally, Cornerstone helped the organization to create a plan to deal with noncompliance, so that employees had incentives to use the new system and faced consequences if they did not.
Solution: In the system's first implementation, 92 percent of the participants complied, compared with the 50 to 60 percent compliance rate of the former system. For the first time ever, employees had a visible link between their individual goals, department goals, and organizational goals, and managers could see how closely their employees' goals were aligning to their teams' goals. In the end, data won over executive charisma. All executives had access to performance data and kept each other accountable for assigning appropriately matched performance scores.