Data Analytics in HR: Impacting the Future of Performance Management
Performance management via annual or semi-annual reviews has been a mainstay in businesses for decades. With this static approach, Human Resources personnel, managers or others in supervisory roles meet with workers every 6 to 12 months to go over goals, performance metrics and various rankings. These assessments are used to make advancement and promotion determinations, to identify training needs, and to address periodic raises, bonuses and other compensation.
While this has been the most common method of rating employee performance, things are changing. These reviews are outdated and fail on many levels to help employees perform better. Instead, performance management is evolving to embrace a more fluid approach that uses data analytics and ongoing feedback for enhanced effectiveness.
Annual and Semi-Annual Performance Review Issues
Performance appraisals are notoriously unpopular with employees, managers and HR personnel, although usually viewed as a necessary evil. There are several reasons for this attitude.
Poor Dynamic: The practice of having managers or HR personnel sit in what appears to be a position of “judgment” over employees sets up an unproductive dynamic. The worker often feels defensive, and the process may foster a sense of conflict rather than the team environment the company desires.
Inadvertent Bias: It’s difficult for managers to provide honest feedback when the words are less than complimentary. Plus, tying these reviews to financial compensation can make it more difficult to rate the employee’s performance without bias.
Inaccuracy: Subjectivity and accuracy are frequently a problem with the numeric rankings or ratings that periodic performance reviews rely on. The system needs standardization and reliable metrics to ensure objectivity and accuracy.
Prolonged Process: This is a lengthy, unwieldy process that requires a huge block of time from managers and HR, detracting from other important job roles and detrimentally impacting productivity. A 2014 Deloitte University study revealed that 58 percent of companies surveyed view reviews as an unproductive use of time.
Inadequate Feedback: This outdated approach fails to give employees timely feedback that is so essential to supporting employee satisfaction and retention. It also fails to capture and reflect real-time performance, which offers more opportunity for improvement and growth.
The Role of Data Analytics
Automation helps business performance on many levels, with performance management reaping the benefits as well. When companies pair automation with ongoing data gathering and analysis, they’re able to overcome or minimize most of the issues found in traditional review methods. Accuracy is greatly improved, while the objective manner used removes many of the negatives that lower employee morale. This method supports better employee performance assessment and more clearly identifies specific areas that need improvement, as well as those where commendation is warranted.
Using a software platform for data gathering and analytics is a huge time saver, and the application of verifiable facts and numbers to measure progress minimizes the bias that’s inherent in the old-school method of performance management. This data-driven approach also allows for the tracking of different performance metrics, goals, milestones and achievements. It is objective, scientific, adaptable and manageable.
The New Method of Performance “Reviews”
The future of performance management includes both data analytics and employee feedback. Rather than relying upon scheduled reviews spaced far apart, companies should use ongoing reviews, feedback and “check-ins” to offer more engagement on a real-time basis. A combination of manager and HR assessments with peer reviews can offer better engagement and give workers the tools and information they need to do their jobs well. It will also motivate them to improve on their weaknesses and capitalize on their strengths.
While data analytics is an integral part of effective performance management, this is merely a tool for enhanced performance management. Employee engagement and trust comes from human interaction and ongoing feedback that uses data to enhance accuracy, objectivity and efficiency. The human touch is still an important part of the process, and managers and HR personnel must continue to personally interact with workers to offer guidance, support, feedback and information.
