Marshaling Talent Through

Workforce Analytics
Many HR processes focus on employee skills at the expense of true business
performance. Here’s a look at how modern software can help change that.

EDITOR’S NOTE CONTINUOUS FEEDBACK WHAT EMPLOYEE HOW HR DATA

IMPROVES EMPLOYEE PERFORMANCE ANALYTICS STAFF
PERFORMANCE SOFTWARE CAN DO AND BUSINESS TEAMS
FOR YOU CAN JOIN FORCES
 EDITOR’S
NOTE

Improve Business Outcomes With Analytics,

Performance Management

Workforce analytics is increasingly In our second story, industry analyst Barry

HOME
being used to help boost the performance of
EDITOR’S NOTE employees and achieve improved business out-
comes. This three-part handbook shows how
CONTINUOUS
FEEDBACK companies are using data to manage talent and
IMPROVES EMPLOYEE
PERFORMANCE
connect performance to an overall strategy.
In the first story, Paul Hamerman, vice
WHAT EMPLOYEE
president and principal analyst at Forrester
PERFORMANCE
SOFTWARE CAN DO Research, discusses why big companies such
FOR YOU
as Medtronic, Schneider Electric and Kroger
HOW HR DATA are deploying newer performance management
ANALYTICS STAFF AND
systems. These systems align employee, team
BUSINESS TEAMS CAN
JOIN FORCES and company goals to produce better results for
their businesses, Hamerman reports. In addi-
tion, companies are tapping next-generation
performance management tools such as Bet-
terWorks and 7Geese that focus on Objectives
and Key Results, or OKRs, a method used at
Intel and Google. Some of these applications
can also gather data from sales systems, for
example, to measure employee performance.
Wilderman explores how employee perfor-
mance management can be a basis for excel-
lence in other areas such as learning and
compensation. It cites case studies from Cor-
nerstone OnDemand, SAP and Oracle to illus-
trate how performance management software is
used to ensure success. For example, SAP user
Edgewell Personal Care discovered that a deep
understanding of talent can inform workforce
planning and reporting.
In our third article, David Essex delves into
why HR data analytics products require a part-
nership between data scientists and business
managers, and he gives some inside tips on
promoting such alliances. Sometimes, success
at workforce analytics requires people skills,
not just fancy software. n
—Dan Ring
News Writer, SearchFinancialApplications

2 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS

 EXCEEDING
EXPECTATIONS
Continuous Feedback Improves
Employee Performance
A new report by Forrester Research, the
HOME
aptly named “Transform Employee Perfor-
EDITOR’S NOTE mance for Continuous Engagement,” makes the
case for improving performance management
CONTINUOUS
FEEDBACK with new technologies that offer continu-
IMPROVES EMPLOYEE
PERFORMANCE
ous reviews and coaching. The report singles
out vendors that offer next-generation tools.
WHAT EMPLOYEE
Those vendors include 7Geese, BetterWorks,
PERFORMANCE
SOFTWARE CAN DO ClearCompany, Tap My Back, TMBC, Work-
FOR YOU
board and Zugata.
HOW HR DATA Paul Hamerman, co-author of the report,
ANALYTICS STAFF AND
and a vice president and principal analyst
BUSINESS TEAMS CAN
JOIN FORCES at Forrester, discussed the findings with
SearchFinancialApplications.
Why is the traditional annual or biannual
process for performance management broken?
PAUL HAMERMAN: There are a lot of reasons. The
periodic process is too late to impact perfor-
mance in a positive way. It is a summary of
your past performance over the year or half
3 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS
year, but it is not forward-looking.
The traditional approach also takes up a lot
of time of employees and managers, and is not
always worth the effort involved in terms of the
results coming out of it.
It is also too closely linked to salary adjust-
ments. If you look at the rate of inflation over
the past five to seven years, it averages less
than 2%. Why go through an exhaustive per-
formance appraisal, and then come up with sal-
ary increases in the 1% to 3% range?
A lot of time is invested in a performance
review, which doesn’t motivate employees at
the end of the process. The traditional process
is often based on the notion that performance
is about skills. It’s not what the business cares
about. The business cares about driving busi-
ness results, like revenue growth and customer
retention.
We think continuous performance is the way
to go.
 EXCEEDING
EXPECTATIONS
About a dozen emerging vendors offer software
with common themes of continuous feedback,
coaching and recognition. Do these new per-
formance appraisal tools integrate with talent
management software, such as learning and
succession management?
HOME
The systems we mention in the report are not
EDITOR’S NOTE tightly integrated with talent management sys-
tems or other business systems. But it’s possi-
CONTINUOUS
FEEDBACK ble to integrate these performance solutions to
IMPROVES EMPLOYEE
PERFORMANCE
collect data coming out of business systems,
such as ERP and sales, and use it in assessing
WHAT EMPLOYEE
performance. It’s important to be able to col-
PERFORMANCE
SOFTWARE CAN DO lect business data reflecting individual perfor-
FOR YOU
mance against goals. Sales organizations tend
HOW HR DATA to be very good at that. That is a model that
ANALYTICS STAFF AND
is going to become more pervasive across the
BUSINESS TEAMS CAN
JOIN FORCES enterprise.
Which of these next-generation vendors
encourage collaboration and openness?
The report mentions a vendor called Zugata
[Inc.]. The product is designed for peer-to-
peer feedback. It continuously gathers feedback
on performance and it is generally anonymous,
real-time feedback from team members. The
4 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS
report mentions several other applications that
include continuous feedback, including Tap My
Back, BetterWorks and 7Geese.
What kind of mind-set among employees
is needed to use these new tools effectively,
especially if they enable anonymous feedback?
In peer-to-peer feedback, the mindset should
be one of encouragement. It tends to involve
praise in many cases, but it should also include
constructive feedback and suggestions for
improvement. The mindset should be geared
toward teamwork and collaboration, rather than
competition.
How do you ensure that continuous feedback
is sparking productivity and growth?
Feedback has much more value if you continu-
ously measure and track progress against a
set of goals or business outcomes. One ven-
dor in the report, called Share Performance,
[uses] Enterprise Outcome Management. In
the report, we note that the approach seeks to
increase employee performance by managing
short-term and long-term outcomes that
support enterprise strategies.
 EXCEEDING
EXPECTATIONS
Considering the amount of data collected by
newer vendors highlighted in the report, such as
BetterWorks, TMBC and Zugata, should users
be concerned about privacy issues?
Confidentiality is certainly important in the
context of HR processes, and these systems are
HOME
designed for that. The performance conversa-
EDITOR’S NOTE tions between employees and their manager
are confidential and must be handled as such
CONTINUOUS
FEEDBACK when logged into the systems. Data privacy
IMPROVES EMPLOYEE
PERFORMANCE
and protection related to employee data, on the
other hand, is a regulatory issue that must be
WHAT EMPLOYEE
addressed by the software vendors in specific
PERFORMANCE
SOFTWARE CAN DO countries and regions.
FOR YOU
As a cultural issue, it is up to companies to
HOW HR DATA decide about the transparency of performance
ANALYTICS STAFF AND
information. Some companies, for example,
BUSINESS TEAMS CAN
JOIN FORCES post leaderboards and are very transparent
about individuals’ performance as it relates
to their peers. Transparency of performance
results can have motivational value when used
in a team-oriented culture.
Some big vendors are offering new continu-
ous coaching and goal-setting tools. Workday
provides Anytime Feedback and Anytime Goal
5 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS
Management. Cornerstone OnDemand and
Halogen Software have similar technologies.
Are these technologies as good as the tools
offered by newer, maybe more focused vendors?
Some comprehensive talent management
vendors are improving in terms of adopting
continuous performance. SAP, for example,
just announced continuous performance man-
agement capabilities within SuccessFactors.
The next-generation performance vendors,
however, are using some differentiated tech-
niques that I have not yet seen in the more
comprehensive HR and talent systems.
Several vendors, such as 7Geese, BetterWorks,
StatusPath and Workboard, incorporate a
methodology called Objectives and Key Results,
or OKRs, which started at Intel and is used at
Google. How does OKR improve performance?
It focuses on tracking progress against a set of
generally measurable goals and objectives. It is
a framework that is continuous and forward-
looking. It seems to be picking up momentum
in the market. The applications tell you where
you stand at any point in time on your objec-
tives and results, and that application is generally
 EXCEEDING
EXPECTATIONS

accessible on your mobile phone and is very
visual. It is a good way of aligning what you are
working on with what you are expected to do.
Why did your research find that many
organizations are reluctant to deconstruct
HOME
the performance management process?
EDITOR’S NOTE One perceived value of a traditional process
is that it serves as a historical record of an
CONTINUOUS
FEEDBACK employee’s performance. For legal reasons,
IMPROVES EMPLOYEE
PERFORMANCE
many organizations may want to have that,
especially if they decide to terminate someone
and they want data to show the person is not
performing. There are some legal and compli-
ance concerns that lean toward retention of
the traditional process. But some of the newer
solutions can also create a historical record as
well. A lot of companies may not be ready to
innovate this process but may see the value of
it in the future. —Dan Ring

WHAT EMPLOYEE
PERFORMANCE
SOFTWARE CAN DO
FOR YOU

HOW HR DATA
ANALYTICS STAFF AND
BUSINESS TEAMS CAN
JOIN FORCES

6 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS

 GAINING
INSIGHT

What Employee Performance

Software Can Do for You

Employee performance management soft- departmental goals. This starting point enables
HOME
ware is rich in analytics and enables businesses space for clarity, understanding and alignment.
EDITOR’S NOTE to build up a repository of employee skills, The discussion focuses on setting goals for the
training and performance. Performance man- employee that will contribute to the higher-
CONTINUOUS
FEEDBACK agement software can spot workforce trends order goals; in other words, corporate and
IMPROVES EMPLOYEE
PERFORMANCE
and align talent more closely with the bottom departmental goals. Employee achievements are
line for most departments. Note that sales, IT recorded in the system as tasks are completed
WHAT EMPLOYEE
and marketing each have specialized perfor- and objectives met.
PERFORMANCE
SOFTWARE CAN DO mance management software tailored to those Employees and managers must be able
FOR YOU
functions. not only to set goals, but to also create met-
HOW HR DATA rics that help employees track their progress
ANALYTICS STAFF AND
toward meeting those goals. Managers can then
BUSINESS TEAMS CAN
JOIN FORCES A REVIEW OF EMPLOYEE PERFORMANCE monitor progress and meet regularly with the
MANAGEMENT employee to discuss it.
The familiar process of employee performance Managers are responsible for providing
management involves all the key business coaching throughout the year and perhaps
processes that managers and employees need adjusting goals to be more realistic. They may
for monitoring and measuring performance also recommend classroom training and online
throughout the year. learning.
At the beginning of the cycle, the manager At the end of the year, there is a final perfor-
and employee meet to discuss corporate and mance review and perhaps a monetary reward.

7 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS

 GAINING
INSIGHT
HOW SOFTWARE IMPROVES EMPLOYEE
PERFORMANCE MANAGEMENT
Software for employee performance manage-
ment is offered standalone or as part of a
broader talent management system that also
includes recruitment, training, compensation
HOME
management and succession planning.
EDITOR’S NOTE The major features of employee performance
management software include goal setting and
CONTINUOUS
FEEDBACK strategy, a repository to capture all interactions
IMPROVES EMPLOYEE
PERFORMANCE
between managers and employees, developing
and delivering e-learning and other training
WHAT EMPLOYEE
options, and business intelligence to measure
PERFORMANCE
SOFTWARE CAN DO individual and group performance.
FOR YOU
I will now examine the features and benefits
HOW HR DATA of employee performance management software
ANALYTICS STAFF AND
using user success stories from vendor web-
BUSINESS TEAMS CAN
JOIN FORCES sites—sometimes paraphrased for clarity. The
goal is to understand the software features that
led to success, as well as the benefits obtained.
STANDARDIZING PERFORMANCE
MANAGEMENT
Performance management is mostly about
the interactions between the employee and
8 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS
the manager throughout the year. Therefore,
employee performance management software
should include a calendar of events, workflow,
performance-review documents, and an overall
repository to memorialize the documents cre-
ated and summaries of discussions.
An Oracle user at American Career College
and West Coast University described the ben-
efits this way: “We aligned performance crite-
ria for all employees with our competencies to
ensure employees understand what is expected
of them. We established a standardized process
for setting and measuring employee goals—
helping to improve retention and ensuring that
goals align with organizational strategy.”
My analysis: The heart of an employee per-
formance management system is the repository
of review documents. It must be straightfor-
ward and transparent to help managers and
employees work together. The repository and
workflow deliver significant structure and ben-
efits because they enforce the required rules of
engagement and memorialize the results.
Behind the scenes, IT must validate that
there are appropriate levels of security, work-
flow and ease of use. In fact, for testing
 GAINING
INSIGHT

purposes, and perhaps other reasons, IT should
manage the performance of its own employees
with these software tools.
SKILLS MANAGEMENT A CRITICAL FUNCTION
HOME
To build up an employee performance manage-
EDITOR’S NOTE ment repository that captures past and future
performance, it is important to track employee
CONTINUOUS
FEEDBACK skill sets. Suppose, for example, that project
IMPROVES EMPLOYEE
PERFORMANCE
management is an important skill for employ-
ees to have. The management team can help by
WHAT EMPLOYEE
offering coaching, online or classroom train-
PERFORMANCE
SOFTWARE CAN DO ing in that skill, managing much of it in the
FOR YOU
employee performance management software.
HOW HR DATA In addition, the analytics in the system
ANALYTICS STAFF AND
should help answer the following types of
BUSINESS TEAMS CAN
JOIN FORCES questions:
■■ Which employees have these skills now?
■■ How do these skills contribute to the bottom
line?
■■ How have managers helped employees
improve their skills?
■■ Which training techniques have been
effective?
Cornerstone OnDemand user USG, a maker
of building materials, confirmed the benefits
of combining employee reviews and training:
“Reviews are streamlined and easier to com-
plete. Results can also be used in tandem with
our e-learning module to address skill gaps and
further engage employees.”
My analysis: The combination is compelling.
The review process uncovers training needs,
which the employee performance management
software directly supports by facilitating the
development and delivery of training programs.
Metrics in the performance management soft-
ware can be used to assess the effectiveness of
the training.
AGGREGATE ANALYSIS BROADENS BENEFITS
On a micro level, employee performance man-
agement software can help people improve
their own performance, which provides a
higher ROI for the company and greater
rewards for individual employees. Now, con-
sider what this means across all employees.
Significant skills gaps can be identified and
conclusions reached with respect to employee

9 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS

 GAINING
INSIGHT

retention and workforce effectiveness. But
doing all of this requires having a performance
management repository with well-defined
metadata and strong analytics tools.
That’s what SAP user Edgewell Personal Care
reported in their testimonial: “We achieved a
HOME
deeper understanding of talent that informs
EDITOR’S NOTE
reliable workforce planning and reporting.”
Indeed, employee performance management
software provides the structure needed to man-
age the full review cycle, supports the training
that improves performance and offers analytics
for assessing the overall health of the work-
force. —Barry Wilderman

CONTINUOUS
FEEDBACK
IMPROVES EMPLOYEE
PERFORMANCE

WHAT EMPLOYEE
PERFORMANCE
SOFTWARE CAN DO
FOR YOU

HOW HR DATA
ANALYTICS STAFF AND
BUSINESS TEAMS CAN
JOIN FORCES

10 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS

 TEAMWORK
How HR Data Analytics Staff
and Business Teams Can Join Forces
Effective HR data analytics requires close
HOME
collaboration between data scientists and
EDITOR’S NOTE business managers, according to experts from
Chevron, Morgan Stanley and Wal-Mart who
CONTINUOUS
FEEDBACK participated in a panel at the 2015 HR Technol-
IMPROVES EMPLOYEE
PERFORMANCE
ogy Conference & Exposition in Las Vegas.
The panel was moderated by Brian Kelly,
WHAT EMPLOYEE
president of Vestrics, a maker of cloud work-
PERFORMANCE
SOFTWARE CAN DO force analytics software based in Chapel Hill,
FOR YOU
N.C. In the first part of this panel report, the
HOW HR DATA experts explained how they use HR analytics
ANALYTICS STAFF AND
for workforce optimization.
BUSINESS TEAMS CAN
JOIN FORCES
HR DATA ANALYTICS DEMANDS SENSITIVITY
Jeremy Shapiro, an executive director in HR and
head of global talent analytics at New York-
based securities firm Morgan Stanley, shared
the nuances of getting HR data analytics staff
to work effectively with the business side.
“In an organization with 55,000 people,
11 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS
there’s complexity, and it’s really hard to
understand all the business drivers for that
many businesses all at the same time,” Shap-
iro said. “Many times we don’t know what the
business problem is [before] walking into a
meeting with a senior leader.”
It’s almost as if there are three partners, he
said: business leader, analyst and the sheet of
statistics they’re going over. “Most of the time,
we’re able to find nuggets together,” which can
make business leaders more committed to the
analysis and comfortable drawing their own
conclusions from the data, he said.
RJ Milnor, manager of planning, analytics
and reporting at Chevron Corp., an energy pro-
vider based in San Ramon, Calif., advocated a
similarly soft touch when collaborating with
business managers. “Sometimes we feel like we
need to provide the answer for the business,”
Milnor said. “The business really doesn’t like
that. Most business leaders actually know their
 TEAMWORK
business really, really well. What works well for
us is helping the business ask questions they
may not have asked before.”
Chevron’s analytics group functions like
internal consultants, Milnor said. “It’s provid-
ing the strategic questions back to the business
HOME
for them to consider and providing them new
EDITOR’S NOTE options to achieve their business objectives.
And that has worked extraordinarily well.” It
CONTINUOUS
FEEDBACK helps to bring the HR data analytics team into
IMPROVES EMPLOYEE
PERFORMANCE
the conversation at a senior level, he added.
Sometimes using HR data analytics effec-
WHAT EMPLOYEE
tively requires trial and error, Milnor said. He
PERFORMANCE
SOFTWARE CAN DO recounted a time his group set out to analyze
FOR YOU
the effects of a learning and development pro-
HOW HR DATA gram at Chevron. As part of the analysis, his
ANALYTICS STAFF AND
group ran multiple regression analyses on the
BUSINESS TEAMS CAN
JOIN FORCES effect on attrition and productivity.
“There weren’t any [effects], which kind of
surprised us,” he said. The problem was Chev-
ron had taken a data-mining approach—throw-
ing a lot of data [into the analysis] and seeing
what came out—instead of a hypothesis-driven
one employing root-cause analysis or some
test of the hypothesis. Once they took that
approach, things changed.
12 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS
“We put our engagement data in there, and
we saw a nice relationship between engagement
and safety measures, which we didn’t know
existed before,” Milnor said.   
Kelly stressed the importance of understand-
ing that predictive analytics can’t be precise,
which CFOs know well from their financial
forecasts.
“There has to be a mind shift to be able to
walk in and feel comfortable with a dialogue,”
Kelly said. “It’s not always about the math. It’s
about the story the business is looking for.
“There’s really not a science to move from
reporting to predictive to optimization,” he
continued. “It’s more of a process and a dia-
logue and a comfort level with being incorrect
with some numbers and going back and re-
optimizing the models.”
HOW TO APPROACH SOFTWARE
DECISIONS, DATA
Kelly outlined several options for approach-
ing HR data analytics. “There is enough pack-
aged software that exists within your [human
resource information systems] to handle the
 TEAMWORK
reporting. When you start to move into predic-
tive, there are [a] number of ways that you can
look to approach this.”
First, decide what types of statistical tests
to apply to each situation and whether to use
hypothesis- or data-driven approaches. Build a
HOME
team and bring in resources from finance, stra-
EDITOR’S NOTE tegic planning or HR: It will be tougher to scale
and not always efficient, but more learning is
CONTINUOUS
FEEDBACK possible. Hiring a consultant is another route,
IMPROVES EMPLOYEE
PERFORMANCE
but the methods will be harder to repeat.
The panel consensus was that data doesn’t
WHAT EMPLOYEE
have to be perfectly clean, and what analysts
PERFORMANCE
SOFTWARE CAN DO need instead is knowledge of how much accu-
FOR YOU
racy is required for each problem.
HOW HR DATA “I’ve never worked in an area where the data
ANALYTICS STAFF AND
is perfect,” said Elpida Ormanidou, vice presi-
BUSINESS TEAMS CAN
JOIN FORCES dent of global people analytics at Wal-Mart
Stores Inc., the retailer based in Bentonville,
Ark. “A really good analytics person will be able
13 MARSHALING TALENT THROUGH WORKFORCE ANALYTICS
to assess what is good enough. ... You can make
a lot better decisions from good enough data
than no data at all.”
Kelly said never to start with data cleanup
because it’s a never-ending process.
It’s better to decide first how much the data
inconsistency influences the model and tell
senior managers why it’s worth cleaning up the
data.
Analytics will always involve probability-
based models, according to Kelly. “You’ll never
get to the point where a software vendor will
be able to say, ‘Here is the future, and there-
fore you should plan for this.’” Instead, “futur-
ists” can propose what-ifs and ranges of likely
outcomes.
“At the end of the day, it always goes back to
the business person saying, ‘I believe this is the
most likely path forward, and we’ll plan for this,
and we’ll calibrate along the way.’” —David Essex
 ABOUT
THE
AUTHORS
DAVID ESSEX is an executive editor in the Application De-
velopment, ERP and Health IT Media Group at TechTar-
get. He was previously an editor at BYTE, PC Resource
and 80 Micro. Email him at dessex@techtarget.com.

Marshaling Talent Through Workforce Analytics is a

DAN RING is a news writer for SearchFinancialAppli- SearchFinancialApplications.com e-publication.
HOME cations. He was previously bureau chief in the Boston
Scott Wallask | Editorial Director
EDITOR’S NOTE
Statehouse for the now closed Ottaway News Service and
Ron Karjian | Managing Editor
The Republican, a daily newspaper in Springfield, Mass.
Moriah Sargent | Associate Managing Editor
CONTINUOUS Email him at dring@techtarget.com.
FEEDBACK
David Essex | Executive Editor
IMPROVES EMPLOYEE
PERFORMANCE BARRY WILDERMAN is an industry analyst, researcher and Diann Daniel | Site Managing Editor

consultant. Previously, he worked for Information Build- Linda Koury | Director of Online Design
WHAT EMPLOYEE
PERFORMANCE ers, where he helped shape the software vendor’s ap- Martha Moore | Senior Production Editor
SOFTWARE CAN DO
proach to third-party application delivery and artificial Doug Olender | Publisher
FOR YOU
dolender@techtarget.com
intelligence. Email him at Barry@WildermanAssociates
HOW HR DATA .com and follow him on Twitter: @BarryWilderman. Annie Matthews | Director of Sales
ANALYTICS STAFF AND amatthews@techtarget.com
BUSINESS TEAMS CAN
JOIN FORCES
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275 Grove Street, Newton, MA 02466
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