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11/24/2004
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Workforce Performance Management: Efficiency and Effectiveness

Automating and improving processes and performance.

VentanaView™

A proper understanding of how to automate and improve the effectiveness of workforce processes is significantly impeded by the lack of leadership and investment in global organizations. Assessing the potential of workforce management practices to automate and improve the processes and performance of employees is rapidly becoming a top issue for finance and operations executives. Industry and corporate conversation in human capital management, talent management, and pay-for-performance initiatives must be translated into processes and systems for improving employee life-cycle management. Ventana Research recommends that you assess your processes, re-evaluate your systems investments into ERP and human resource (HR) operational systems, and accelerate the adoption of workforce performance management.

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Ventana Research sees the practice of managing the effectiveness and value of your workforce as the performance management imperative of this decade. Leveraging employees as human capital assets is essential for improving business and operational performance. The challenge is that this imperative is not always a priority and is not given enough credence and investment to ensure an optimal outcome.

The finance and operational management gap in this critical human capital investment is beginning to change as a new optimism in the importance of workforce management has begun. Business operations and finance have a direct responsibility to manage employee actions and costs, but now must address performance and process improvement more seriously. The lack of alignment between processes and systems in supporting employee-centric programs has kept large global organizations from fully leveraging their human capital.

Organizations need to determine where to link their process and system investments for optimal workforce management. ERP providers are trying to influence you to invest in their HR, finance, and performance management systems, while best-of-breed workforce management and pay-for-performance providers are focused on complementing your investments. Many workforce management applications are available through a hosted application service that reduces costs and resources required to deploy these applications.

To take a workforce management initiative seriously, you must fully assess the following segments within your organization:

Recruit and Hire Management: Ability to centrally manage and improve the process for a new or replacement employee in an organization

Compensation Management: Ability to centrally manage compensation and analysis to optimize workforce and employee satisfaction

Incentive Management: Ability to centrally define strategies for incentives and rewards and measurement of outcomes on expected performance improvement

Goals Management: Ability to centrally manage objectives of employees and compare performance to objectives in order to reach the desired outcomes on an annual or initiative basis

Learning Management: Ability to centrally define, manage and track the impact of training and education programs outcomes on employee performance

Competency Management: Ability to centrally manage competencies in the organization and be able to leverage them across the organization

Performance Measurement: Ability to provide flexible reporting and analysis of employees from a cost and performance perspective to determine their potential and value

Organizations will need to determine how to bring these functional capabilities into a workforce process and performance improvement environment. The imperative to assess your ERP transaction-centered systems and determine your workforce management direction will be a competitive differentiation.

Assessment

Ventana Research believes that using workforce performance management to automate and improve business processes will increase the value employees bring to the organization. A lack of clear understanding of how to address the workforce management imperative is preventing organizations from achieving optimal results. Realizing the need to improve employee effectiveness through more efficient systems has made this topic a part of the strategy and planning conversations in executive and regular management meetings. Improving the maturity and prioritization in your organization will be critical to advance the value and potential of your workforce.

Mark Smith is CEO & Senior Vice President of Research at Ventana Research (www.ventanaresearch.com), a research and advisory services firm.

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