How to Spot and Address Poor Employee Performance with Business Intelligence

How to Spot and Address Poor Employee Performance with Business Intelligence

According to research conducted by Gallup, only 13% of employees in companies around the world stay actively engaged at work. The remaining 87% of employees are either partially or completely disengaged.

Employee Engagement Chart

Source: Gallup.com

To put it another way, 900 million employees are not engaged and 340 million employees are actively disengaged. Employees that are not engaged lack motivation, and their performance degrades over time because of a lack of interest in their work.

Employees that are actively disengaged strongly dislike their work, and spread this negativity to other employees.

This is a serious issue for organizations small or large. An underperforming workforce can put a dent in a company’s performance at every level and this is why companies spend a lot of time doing performance management.

Goals of performance management


Performance management standards have been used for more than six decades to drive workforce performance to its peak and achieve favorable outputs.

The goals of employee performance management strategies are to:

  • Engage and motivate employees to work harder and produce better results
  • Align employee goals with company objectives
  • Retain top performers
  • Coach underperforming ones

Six decades ago, when there were fewer companies and fewer employees to manage, performance management was simple and uncomplicated. But as the number of employees grew and number of stimulus pulling people's attention increased, the effectiveness of performance management has been wearing off.

The performance management process


The performance management process helps align the objectives of employees with those of the organization. This process involves 5 steps:

Performance Management Cycle

Source: opm.gov

1

Planning

The managers sit down with the team they handle and inform them about the goals the organization is trying to reach. Together with the team, they plan a way to achieve the goal.

2

Monitoring

The manager checks the progress the team makes on a daily basis. This provides the manager with the opportunity to make changes in the deadline if the team members need an extension. The manager informs the team about the progress they have made to motivate them.

3

Developing

Continuous monitoring helps the manager see the needs of the team. If any team member requires training or if a team member can take on more responsibilities, the manager can, through regular monitoring, check that. The training can also include: classroom training, online training, additional work assignments, and mentoring.

4

Rating

The manager assigns standard ratings according to an employee’s performance. If the previous steps are completed successfully, the employee will not be surprised to see the rating they receive. The focus is on open communication along the way.

5

Rewarding

After the final appraisal rating, the rewards are distributed to the team members. These rewards should be distinguished, making the different performances recognizable.

What pulls traditional performance management down


It’s not enough to just have a performance management framework in place, the way you implement it makes all the difference. Traditional performance management that is based on manual effort has many disadvantages.

Takes too much time

The key problem with manual performance management is that a lot of time is spent in filling, collecting, and sorting feedback from different department managers about their employees. As the number of workers in an organization increase, HR spends more time to ‘review the reviews’. This causes delays in feedback reaching employees, and it’s too late for them to make changes based on the feedback.

Is expensive

As the organization hires more employees, the workload on HR increases. The HR team needs to grow simultaneously to help manage the increasing workload. The performance management process becomes more complex, which requires training. This all adds up to real costs for companies.

Managers make biased decisions

When faced with a lot of data, managers find it hard to analyze, understand, and make decisions. They tend to skip the data and go by what they think and feel, whatever their gut tells them. This, at times, leads to them favoring employees that sweet-talk them instead of the employees who work harder. This demotivates employees who actually perform.

These drawbacks prove to be a stumbling block for any company. BI provides HR with data for every employee in the organization, making their work easy. With this data, they are able to help underperforming employees improve. Big data helps managers find the causes of demotivation in employees, and address them appropriately.

How big data changes employee performance


According to a SAS study, it was found that about 6,400 companies with over a 100 employees would apply big data analytics by the end of 2018. Big data is being adopted by organizations at a fast pace as it provides a large scale improvement in performance of human resource and employees.

Big data provides HR with detailed information about each employee in the organization. These metrics help distinguish top performing employees from underperforming ones, and also provide information on the quality and quantity of the work the employee performs. Examples of these metrics include number of errors, 360-degree feedback, number of sales, number of units produced, and accuracy of time worked as planned.

Organizational performance metrics help organizations assess the following - absenteeism, human capital ROI, and revenue per employee:

Absenteeism shows how many employees are consistently absent during a month or year.

​● Human capital ROI defines how much of the profit the company spends on each employee every year.

Revenue per employee finds the total revenue generated by each employee in a financial year.​

4 examples of how BI helps monitor and avoid pitfalls


BI has helped different organizations improve their productivity by using a modern approach to performance management. Here are few examples of such cases:

Deloitte​

Deloitte conducted a survey that found that their managers and executives were spending a total of 2 million hours a year creating ratings for their 65,000 employees. Most of this time was spent in manual tasks like completing forms, holding meetings, assigning and analyzing ratings.

Much of this analysis was backward-looking, and not effective at actually improving performance. Deloitte needed a new approach to performance management that was forward-looking, nimble, and real-time. They looked to BI to overhaul their performance management and saw huge performance gains.

UPS​

Jack Levis, the Senior Director of process management at UPS, wanted to increase the safety of his drivers as well as nearby pedestrians. They installed an advance telematic ‘black box’ in every UPS van to record how often the seat belt was used and also how many feet the driver backed up. This recorded data gives UPS managers the precise information they need to improve driver performance.

Santa Clara Valley Water District​

UPS employees that deliver products to customers are prone to mugging, and losing the products they deliver. Paul Randhawa, who is the Senior Management Analyst working at Santa Clara Valley Water District located in California, said that whenever a driver does not respond, they quickly get the GPS location to see if they are in trouble.

Google​

Google provides an employee performance measuring metric, they call it Objectives and Key Results (OKRs). A study conducted by Google showed that setting normal goals helps the employee improve performance, but setting challenging goals will help the employee grow further and also engage them.

These OKRs are numeric metrics, and cascade from the company level, to each team, and individual employee. These OKR performance metrics are stored in a performance management system where they can be viewed at any time.

These examples show how leading global companies use BI and big data to strengthen their performance management.

The ROI of performance management through effective BI


BI brings many benefits to organizations, its customers, employees, management, and HR teams. Here are some of the key benefits:

1

Increases customer and employee satisfaction

Using BI to improve performance helps guide employees towards the performance goals set for them. Once employees know what they are expected to do and are motivated each time they achieve a goal, they continue and become better performers. This indirectly benefits customers as well. Motivated employees work better, serve better, and provide better customer service. Happy customers are the biggest reward of performance management powered by BI.

2

Improves hiring quality

In a study conducted by CareerBuilder, 27% of organizations believed that even one bad hire could cost them about $50,000. This money includes the cost of advertising the job vacancy, the time and money spent holding interviews, the cost of the initial few months of salary paid to the employee, and the money lost because of the underperformance of the candidate.

A BI system can provide HR with detailed information about each candidate they interview including data about their performances in their previous establishment. An applicant tracker study conducted by EDG Consulting showed that BI tools improved the number of qualified candidates an organization received by 75%. BI also helps sort resumes, decreasing unwanted resumes by 50%.

3

Decreases HR Workload

With all the information being added by the employees themselves, the HR’s workload decreases. The BI software acts as an extension of the HR department and eliminates the need to hire more HR staff.

Another study by EDG Consulting showed that BI reduces the preparation time for evaluation by 67%, and reduces the time to conduct the evaluation by 75%. The time saved can be better spent on more important HR activities.

Conclusion


We hope you enjoyed reading this article and ready to power your performance management process with business intelligence.

Performance management has been a powerful way to help organizations reach their goals. However, now, performance management needs business intelligence to make it an even more effective tool.

Allocable productivity analytics software provides a multidimensional view of workforce and project and production productivity data that can integrate with your existing performance management strategy and software.  Allocable has an intuitive user interface that’s easy to use for both management and employees. This greatly reduces the burden on HR and makes HR more effective.

Try Allocable today and start outperforming your competitors. 

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Allocable is a cloud-based automated time tracking and business intelligence (BI) software platform that provides  a complete visualization of your workforce and project productivity data empowering you to turn information into actionable insight to optimize and forecast performance with more certainty.

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