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Big Data and Performance Appraisals: What We Learned at SIOP

As noted in last month’s Perspectives, several members of the EASI•Consult® team attended the 32nd Annual Conference of the Society for Industrial and Organizational Psychology (SIOP) this spring in Orlando, Florida.

We heard and saw a lot, and interacted one-on-one with colleagues and peers across the country. But in the various symposiums, presentations and talks we attended, a couple of topics continued to come up for discussion.

Data Analytics/Big Data

As I’m sure you have seen in TV commercials, business publications and news articles, organizations of all sizes have a growing desire for detailed and comprehensive data from a variety of sources, including existing and potential customers and competitors. And with the enhanced computing capability in today’s world, there are plenty of companies out there that  are more than willing and prepared to provide that data.

However, as I heard at SIOP, data does not equal “information,” at least not usable information. For example, one group of presenters offered this helpful advice: “The value of any data is only as valuable as the information and insights we can extract from it. As the amount of data continues to grow, we need to be able to find the ‘valuable information and insights’ that will help us make better decisions and give our organizations a competitive edge.

These days, it seems companies are obsessed with data, and they now  believe that “more is better.” But, at least according to those presenters, that is a false belief.

In fact, in a related symposium, a recognized leader in the field of human resources data and analysis said HR is on the cusp of a breakthrough.  Specifically, he believes several leading organizations have made key strides in clearly demonstrating the business value of various HR initiatives.

This presenter noted, for example, that just as companies are able to calculate relatively accurate returns on investment when considering the expansion of facilities, purchasing new equipment or acquiring a new business, today’s advanced analytics are allowing organizations to more thoroughly and accurately determine the return on investment of enhanced employee selection processes, advanced training programs and more comprehensive leadership assessment and development efforts.

What this means for HR professionals everywhere is that this breakthrough, if truly realized, could leadompanies to value investments in their employees in a manner similar to acquisitions, mergers, expansions and other major operations investments. Now, that would be a real step forward for every chief human resources officer in the country.

Future of Performance Appraisals

As you may have read recently, several prominent corporations have begun to eliminate the traditional annual performance appraisal process. You’re familiar with the routine: setting objectives with and/or for the employee in January, conducting an interim review of the employee’s progress and performance mid-year, rating the employee’s overall performance and attainment of objectives at the end of the year, and using this rating to justify a specific salary increase.

However, as we’ve likely all seen on surveys and consistently heard around the office, no one really likes this process. More importantly, it doesn’t seem to motivate or incentivize employees to undertake the actions companies need in today’s fast-paced, global marketplace.

So why do most of us still do it this way?  The answer always seems to be something like, “How else will we determine and document an employee’s pay raise?” That answer, as discussed in various forums, was not a sufficient reason for continuing an ineffective system, so alternatives were presented for attendees to consider.

Overall, each alternative highlighted the following changes:

  • The traditional performance appraisal is replaced with a motivationally-oriented, goal-setting process
  • Objectives are set for a department or team, and each team member’s (employee’s) role and responsibilities flow from these objectives
  • Key objectives are such that all team members can continuously view their progress (overall sales totals, daily production amounts, etc.)
  • Team results, not simply individual performance, are emphasized
  • Other types of feedback are provided on an ongoing basis from multiple sources
  • All feedback is provided with a developmental orientation
  • Salary increases are linked more to the performance of the overall team

Although these changes may all seem reasonable, presenters did emphasize that undertaking this type of performance management shift requires complete support from executive leadership, must include major “change management efforts,” and cannot be fully implemented within one performance cycle (typically one year). Still, it appears that more and more organizations are recognizing the value of taking the plunge.

There was a third topic that received a lot of attention – continuing challenges surrounding leadership. Since there were many facets to this issue, we will devote a full article to it in a future edition of Perspectives.

Joseph Gier, Ph.D. is vice president of consulting services at EASIConsult® and a licensed psychologist.  EASIConsult works with Fortune 500 companies, government agencies, and mid-sized corporations to provide customized Talent Management solutions. EASIConsult specialties include leadership and individual assessment, online employment testing, survey research, competency modeling, leadership development, executive coaching, 360-degree feedback, online structured interviews, and EEO hiring compliance. The company is a leader in the field of providing accurate information about people through professional assessment. To learn more about EASIConsult, visit www.easiconsult.com, email ContactUs@easiconsult.com or call 800.922.EASI.

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