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1/11/2006
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HR Executives Move Toward Workforce Performance Management

Integrating recruiting, compensation and performance processes and systems becomes a top priority.

VentanaView™

Summary
Companies long have wanted to manage their workforces through an integrated set of processes and systems; now that is becoming a top priority. HR executives are feeling pressure from management in finance and operations to ensure the company realizes the full potential of its employees. As a first step toward workforce performance management, organizations should re-examine their existing recruiting, compensation and employee evaluation processes and systems. Ventana Research recommends they build a business case that defines the benefits and costs of shifting priorities from legacy HR systems to workforce performance management.

View
Human resources organizations are being challenged to provide business value by increasing the contribution of human capital and/or reducing workforce costs. The first step for progressive HR executives is to reassess the entire range of their employee-focused programs, from recruiting to retirement. Unfortunately, this reexamination finds that many of these systems are incapable of managing the performance of workforce processes. Our research and client assessments show that most organizations face a slow and arduous path in taking control of their workforce processes.

In their search more efficient processes and more effective performance across the business, finance and operations executives often discover that their companies have not invested sufficiently in maximizing the business value of their human capital assets. Ventana Research has found a disconnect between the methods and metrics HR uses to evaluate potential new hires and later assessments of the competency of individuals on the job. We recommend that the activities of both HR and Operations – where most employees are actually managed – be integrated into new processes that we refer to as workforce performance management.

HR organizations should re-evaluate the “stovepipe” processes that keep its assessments of the performance of an individual or the entire workforce separate from that of other company sectors. These legacy HR systems keep information about the workforce from the larger organization and prevent the business from understanding and being able to optimize its human capital assets. Ventana Research recommends that organizations begin to integrate recruiting, compensation and performance processes as the first step in building an initiative for workforce performance management.

Assessment
The promise of improving operational results through managing the workforce better should motivate organizations to re-evaluate the range of their workforce processes, from recruitment to compensation. Executives should give top priority to building hiring profiles that focus on what company experience suggests are the candidate attributes they ought to seek, and that will enable employers to link their compensation to performance. As HR executives look to improve existing processes, they should reassess the applications that they use currently and, if necessary, find others that can deliver the benefits they seek. Ventana Research recommends that organizations build applications based on workforce performance management goals.

About Ventana Research
Ventana Research is the leading Performance Management research and advisory services firm.  By providing expert insight and detailed guidance, Ventana Research helps clients operate their companies more efficiently and effectively. These business improvements are delivered through a top-down approach that connects people, process, information and technology. What makes Ventana Research different from other analyst firms is a focus on Performance Management for finance, operations and IT. This focus, plus research as a foundation and reach into a community of over two million corporate executives through extensive media partnerships, allows Ventana Research to deliver a high-value, low-risk method for achieving optimal business performance. To learn how Ventana Research Performance Management workshops, assessments and advisory services can impact your bottom line, visit www.ventanaresearch.com.

© 2005 Ventana Research

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