Managing Employee Performance: Users and Their Software

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Are you in the market for new performance management software?  See our newly published “What Works Brief: The Guide to Performance Management Software: 2015.”[1] A free synopsis of the longer study, this brief covers the main trends in the changing world of performance management and the progress that software vendors are just starting to make to support that change.

In addition to the software solutions covered, we included data from our recent Bersin by Deloitte study of the buying community – you folks who are seeking to replace outdated systems. We learned that of companies purchasing new talent management software this year, 67 percent were planning to purchase performance management software, either for the first time or as a replacement for existing solutions.[2] [3] Why? There are several factors:

  • Performance management is increasingly deemed critical in today’s organizations and the historical systems are not perceived as adequately supporting next-generation practices;
  • The current installed systems are aging;
  • Companies may have multiple different systems and seek to consolidate into one corporate-wide platform.

Of those replacing existing software, 75 percent sought to replace a standalone performance management application with an integrated suite solution.[4]

The majority of organizations we surveyed (74 percent) use one software solution for their performance management system, but respondents reported that as many as ten or more systems are used inside their organizations today. Twelve percent of the population surveyed noted that they did not have a formal performance management process at all.[5]

41 percent of respondents reported that their performance management solutions are self-developed; 38 percent are provided by a vendor (often a suite vendor, although the module may be stand-alone) and 21 percent use modules that are within their core HR systems.

In 19 percent of organizations, the software in use is aging — seven or more years old. This is especially the case with large organizations, where 29 percent of organizations with more than 25,000 employees have owned their performance management system for more than 7 years.

Reliance on home-grown, self-developed solutions for performance management may well be part of the reason for the interest in procuring new applications in the near future; the lack of any technology solution, as noted by 15 percent of respondents may be another.

 

Coaching In, Ranking Out

 

Our research demonstrates that organizations with higher levels of support for coaching see stronger talent outcomes.[6] As it has become increasingly important in the management of performance overall, some applications include tips for how to enhance the effectiveness of the coaching process.  These programs provide a just-in-time approach to coaching assistance, dependent on the area on which the manager is coaching.

Across the solutions studied, 21 percent provide automated coaching tools and 55 percent supported the assignment of a coach within the performance management system; 38 percent provide links to on-demand coaching information, related to the area of interest at hand. 52 percent provide workflows to track coaching and mentoring conversations and activities, an important feature in coaching management.

The growth of coaching as a performance support mechanism has led to support by vendors to maintain records of managers’ one-on-one coaching sessions. These provide employees with a record of the discussions and employers with evidence these discussions occurred.  The goal of such tools enables managers to track their ongoing meetings with employees to review and track goals and development plans, and discuss a variety of other organizational or employee-specific topics. It also relates the frequency and impact the meetings are having on performance ratings, engagement scores and turnover.

 

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

 

As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

 

Copyright © 2015 Deloitte Development LLC. All rights reserved.

 


[1] The Guide to Performance Management Software: 2015A Roadmap to Performance Management and the Solutions that Support it.”  Katherine Jones, Stacia Sherman Garr, and Sally-Ann Cooke. Bersin by Deloitte. 2015.

[2] Investments in Human Capital Management Systems 2014: What Technology Users Have and What They Will Buy in the Year Ahead. Katherine Jones. Bersin by Deloitte. April 2014.

[3] The four application areas most often sought as an integrated via a suite rather than have as standalone solutions are recruiting, onboarding, learning and performance management.

[4] Op.Cit.  Investments in Human Capital Management Systems: 2014.

[5] Investments in Human Capital Management Systems 2014: What Technology Users Have and What They Will Buy in the Year Ahead. Katherine Jones. Bersin by Deloitte. April 2014.

[6] Ibid.

Christa Degnan Manning

Vice President, Solution Provider Research Leader / Bersin, Deloitte Consulting LLP

Christa leads technology and service provider research for Bersin, Deloitte Consulting LLP. In this role, she helps businesses align their workforce support strategies with appropriate third-party software developers, service partners, and governance models. A 25-year technology industry veteran, Christa’s expertise assists organizations in creating functional capabilities and employee experiences that increase productivity, engagement, and workforce efficiency. Frequently cited by business and trade media, she has presented market research on business to business trends, leading practices, and expected challenges and benefits at industry and user conferences globally throughout her career. Christa has a bachelor of arts in English from Barnard College, Columbia University, incorporating studies at University College, University of London. She also holds a master of arts degree in English from the University of Massachusetts and has completed executive coursework on business metrics at the Wharton School, University of Pennsylvania.

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