Implementing an Enterprise Performance Management System?

by TMT Editor

Karen Farmer, talent solutions consultant for Taleo Corporation, has shared with us "The 12 Biggest Mistakes to Avoid When Implementing An Enterprise Performance Management System." Her article appears below. -Ed.

An efficient and effective performance management system for employees garners crucial benefits for organizations today – from greater workforce productivity and retaining top talent to increasing operational efficiencies and lowering HR costs.  In fact, in this tough economy, global corporations are increasingly adopting on-demand software solutions to help step up their workforce optimization efforts. However, implementing the proper performance management system can sometimes prove to be a daunting task.

Following are the 12 biggest mistakes companies make when putting such a system into place, and guidelines on how your business can address these pitfalls, or avoid them altogether.  

Mistake #1: Keep Managers in the Dark
Organizations that struggle with user adoption often have not taken the time to adequately communicate with their managers (the key users of the system) regarding the decisions that went into selecting the performance management system, nor have they adequately educated managers on the benefits they will derive from using the new system. 

Fix: Constant communication and manager training is vital for success.  Often, managers will perceive a new performance management process or system as yet another burden or another distraction - something happening “to them” that makes their life more difficult.  Relentless communication and training that focuses on the benefits to the manager of using the system can help turn resistance and fear into acceptance and excitement.

Mistake #2: Introducing Too Much Change Too Quickly
Transforming the performance management process touches nearly every aspect of the organization and can take years to accomplish.  Introducing too many changes quickly runs the risk of overwhelming managers and employees.

Fix: Focus efforts on a few key outcomes (i.e., reviews being completed on time, all employees receiving reviews) and show success in those areas.  Enterprise Performance Management systems can be configured with hundreds of options and features that end up being unused because the value of using the feature is not established nor understood.

Mistake #3: Creating Overly Complex Performance Review Forms
Performance management systems have been designed with ease of use in mind.  However, too often, HR is so enamored with all the bells and whistles available, they configure review forms with too many options which end up confusing (and losing) users.

Fix: Remember to keep it simple.  Just because the online review form or system has the option, button or drop down menu, doesn’t mean you need to include it for everyone, in every circumstance.  Approach system configuration with the specific end-user in mind and design the right process and options for the right user.  Most enterprise performance management systems support multiple role-based workflows, forms, and processes.

Mistake #4: Underestimating Change Management
Configuring the software is only one part of the work the organization needs to do to successfully implement a new system.  Understanding the change management issues for both managers and employees is just as important.  When you ignore the “people issues,” users resist change because they aren’t realizing the benefits of changing their behavior.

Fix: Develop a solid communication and training plan for senior management, HR, managers, and employees.  Clearly communicate the changes that are coming and explain why.  Don’t be opposed to fielding questions, complaints, push-back and excuses for why things won’t work.  This dialogue is critical to understanding the underlying issues that could be sabotaging the project and offer an opportunity for users to take ownership of the process, and avoid feeling as though this new way of doing things has been thrust upon them.

Mistake #5: Failing to Adequately Plan
No organization would attempt an enterprise-wide rollout of a performance management system without a plan.  Often, however, it is the things that are not planned for that stall, delay or even kill a successful implementation.  Expect the unexpected and have contingency plans that address delays, technical issues and end-user resistance.  

Fix: Get together with peers who have gone through an implementation.  Ask your vendor to connect you with a community of successful users willing to share their experience.  Plan to roll out functionality in phases that can be monitored and adjusted and expect the full solution implementation to take months, not weeks.  Consider what would happen if the system was not fully operational for the next review period and have a fall back plan in place to ensure employee needs are met.

Mistake #6: Keeping End Users Out of Configuration Process
One of the biggest challenges organizations face when selecting and implementing a new system is balancing the wants and needs of the managers and employees with the needs of HR and the business.  However, cutting managers and employees out of selection, evaluation and set-up processes can have serious effects on adoption later on.  Allow end users to experience the solution and be open to their criticism and suggestions for improvement.  Too often, HR falls in love with the “back-end” functionality and shuts out the concerns of end users.

Fix: During the evaluation process ask vendors to stage a demo site geared specifically for managers and employees.  Often, vendor demos focus on what the system can deliver to HR and management.  None of those features will deliver value if people aren’t using the system.  Allow a select group of managers and employees to use the system as they would when implemented and incorporate their feedback into your selection and configuration decisions.  During implementation, allow a representative team of managers and employees to participate in the configuration of the system.

Mistake #7: Failing to Ask Questions and Uncover Issues
Configuration and implementation of a new software system is often the highest point of disruption.  Often, there is a time crunch and an impending review cycle approaching creating a stressful environment.  Once completed, HR often breathes a sigh of relief, thankful that the implementation “issues” (and there will be many) have been resolved.  However, this is a critical time to continue to gather feedback and uncover hidden issues.  The technical and functional issues will have been easily detected and solved; it is the people issues that now need to be uncovered and addressed.  Some users may only use the performance management system a few times a year, so it is critical to continue to ask for feedback and proactively uncover user issues as those who are frustrated will most likely not speak up, they will simply stop using the solution.

Fix: Create a feedback survey that can be sent via email or filled out online to regularly solicit feedback from users.  Establish an ongoing, regular forum to allow managers and employees to offer suggestions for improvement and encourage involvement.  Creating an environment where managers and employees do not feel as though the system or process is being “forced” upon them, but rather feel they are valued partners with HR in creating a system that works for them will turn nagging and resistance into problem solving and solution building.

Mistake #8: Not Establishing Links to Business Objectives
Establishing and communicating the business objectives set forth when initiating the project must be a recurring theme as you move through phases of implementation and adoption.  The business objectives may change over time (phase I – process efficiency, phase II – reviews for all employees, phase III – competency gap analysis for career development) but the need to clearly establish, communicate and measure the results against those objectives will not.  Too often, organizations lose sight of the business objectives (i.e., improving the employee experience) and users become unclear as to “why” they should make the effort to use the system.

Fix: Like any goals, the goals of the performance management process must be specific and measurable.  It is equally important that the objectives be defined and communicated in terms of specific business outcomes.  Completing all reviews on time, or reducing the number of transactions between HR and managers due to incomplete or inappropriate reviews may be primary goals of automation.  However, those objectives alone do not rally the users around a meaningful cause and almost always carry punitive, rather than inspirational motivation.  Consistently strive to communicate how the performance management activities support the success of the business.  In the example of completing accurate and comprehensive reviews on time, there are a number of outcomes that support the goals of HR.  To inspire users (and your CEO) also include the outcomes that support the goals of employees (career advancement), managers (more effective teams) and executives (winning against the competition) every time you communicate why it is important to use the system.  

Mistake #9: Unclear Roles & Responsibilities
Often, organizations assume that automating the performance management process simply means transferring the responsibilities of those administering and executing a paper-based process to “users” who will perform the same basic tasks on a computer.  It is important to understand that implementing, administering and utilizing an enterprise performance management system will require new roles and responsibilities, not just in HR, but throughout the organization.  Even the most basic deployment may require job-competency development, form design, approval process design, and a host of other system configuration decisions that influence the efficacy of the system. 

Fix: Create a project plan that goes beyond indentifying IT and HR resources needed to implement technical parts of the system.  Identify those in other parts of the organization who will be needed or affected by the new system.  This can include OD resources that will be needed to address the myriad of change management issues, managers or employees needed to help define the job competencies, compensation resources that may need to review market data on current positions, senior management who may want to define the approval processes, or recruiters who may be need to describe job opportunities with the organization in a completely new way.  One thing is certain; automation will require more participation from more areas of the organization, not less.

Mistake #10: Lack of Buy-In From Senior Executives
Executive sponsorship is often a necessary first step in moving the organization to an enterprise performance management system.  Gaining buy-in from key executives is frequently needed for budget approval and often creates the necessary teeth to get organizational attention for projects coming from HR.  But that doesn’t mean senior executives are necessarily bought into the concept of creating a performance management culture (see Mistake #12).  Until senior executives participate (in reviewing performance and being reviewed), it is just lip service.

Fix: Senior executives may not care about the specific features of the performance management system but they will most certainly care how performance management impacts the bottom line.  Create a set of dashboards or reports that show trend data relating to important business metrics such as reduced costs, faster time to market, or improved customer service scores due to improved employee performance across the organization.  Prior to system implementation, ask your vendor to put your CEO or other senior executive in touch with other C-Level executives that can speak directly to the benefits they’ve experienced. 
 
Mistake #11: Ambiguity About What to Measure
Measuring performance can mean many different things, even within the same organization.  Evaluating skills, competencies, goals, and outcomes for both individuals and teams are all valid methods of measuring performance.  However, it is crucial that whatever performance metric is chosen, employees and managers have a clear understanding how to observe, measure, and improve performance.  Inconsistent and contradictory measurement can lead to confusion and mistrust as employees may feel the system is unfair or biased.

Fix: One of the first steps in rolling out the performance management system will be to examine your existing job descriptions.  Without question this can be a major undertaking, but a critical step that will pay major dividends down the road.  Every employee needs to understand not only the duties and responsibilities of their job, but specifically on what basis their performance will be measured as this is will be the basis for subsequent decisions effecting compensation, advancement opportunities, and career development. 

Mistake #12: Failure to Establish a Culture of Performance
A culture of performance means more than implementing an enterprise performance management system or completing employee performance reviews.  Creating a culture of performance often requires a dramatic shift in the attitude of an organization towards its employees from one of a “workforce” to one that values unique contributions, recognizes strengths and invests in developing weaknesses, and understanding the value of each individual.  As noted, executive buy-in is an important ingredient but the critical element needed to infect the culture is the development of the manger-employee relationship.  Too often, managers are not given the tools, training or support they need to be successful in this new relationship with their employees.  The result is abandonment of a process that doesn’t seem to be working and employees who are left wondering what happened performance management.

Fix: Without a cultural change, performance management may never evolve from the annual performance review.  Managers need to meet with each of their employees to discuss performance expectations, goals and objectives, career development, and more.  Managers need to become mentors, coaches, and teachers with the employees’ performance top of mind.  Invest in manager training and development and provide support for those who are uncomfortable with these types of conversations.  Encourage managers to allow their employees to review them, and show that everyone is interested in performance improvement.