Using Business Analytics to change ‘Performance Management’ to ‘Performance Motivation’

For most companies, the performance management process ends up being a fight for emotion management for both parties. The more empathetic types of managers tend to dread the upcoming task of the performance review while employees are equally anxious and apprehensive.

Some argue that the process results in employees’ resentment, frustration and disengagement. Others argue that the process cannot be abolished because after all, how will employees meet company goals if they don’t quite know their weak points, where they are going wrong, or how they could do better to support organisation strategies?

The debate around the abolishment of performance management, stems primarily from arguments around its negative conduct and consequences. But what if we kept performance management but adapted it to become performance motivation?

A new approach to performance motivation with business analytics

Business analytics- the methodological examination of company’s data- has become an emerging term in the workplace. It is more than just HR analytics, which focuses primarily on HR data. The next step up is linking the HR analytics with Business analytics and ensure that there is integration between the two. With the reiterative introduction and use of technology in work place functions, business analytics has made its name known. HR functions have always emphasised performance management by tracking performance, accumulating supervisory reports, and focusing on employee reviews. This process- although accompanied by debate – is still a primary function in most organisations today. However, we are currently observing a shift in the way it works with an emphasis on a more objective approach- via business (or data) analytics. The software-based human resources practices have upgraded to a software-based approach.

The speed towards the adoption of business analytics is backed by the helpful direction it gives managers and executives in workforce decision-making. Data-driven analytics assists in the process of team formation, remuneration, promotion, development, succession-planning, problem-identification for coaching and even helps managers and employees assess their goals, achievements, and direction.

How exactly does it work?

The core functions of business analytics are directed at informing business decisions and automating and optimising business processes where data is now used as a competitive strategy. The likes of Google and Facebook, have proven to use this concept to their advantage since they collect preferences from your account and direct adverts to you which match your preferences.

Business analytics may be delineated as follows:

• Descriptive analytics: this allows you to track KPIs to grasp how well the business is functioning at present
• Prescriptive analytics: this concerns analysis of past performance trends to formulate recommendations on managing similar situations
• Predictive analytics: this assesses trends to predict future outcomes

Business analytics is a two-part process:

1. The first part of the process involves the examination of data from previous performance of the company, employee or product/service. Data may be assessed from the company’s previous performance, financially or via the track record; employees’ previous performance reviews over their work-life history in the company; or via the product/service track record.
2. Part two involves statistical analysis where algorithms are applied to past data to predict future performance of what is intended to be released to the market. This can assist in the direction of your marketing strategy.

A case study

Shell is a model example for business analytics. For years, Shell was out of the loop – unaware of what was amiss in their process. This consequently resulted in Shell suffering a loss in productivity resulting from machine down-time. Shell had a detrimental streak, losing millions of dollars on a daily basis. Scrambling for a solution before a greater disaster was to be experienced, they invested in an analytics system where software was generated for creating models to predict when machine parts might fail and when to replace them, saving them time (and most likely, billions). Furthermore, Shell is able to perform the analysis in only 45 minutes.

The problem

Despite a vast number of companies having implemented this data-driven decision-making system, they are still relatively novice to it. This shows to be stressful for HR who are still in the process of trying to generate analytical reports while customers line up and demand the full-scale end result. Attempts to give the customer what they want before a competitor beats them to it means that HR is greatly pressurised. The central question therefore becomes- ‘how do we keep up?’

Embracing business analytics

As per the above case study, business analytics is a great platform for competitive advantage. However, HR seems to be quite skeptical in the implementation of the system. All this talk about artificial intelligence has brought fear to many in that, their jobs are being replaced. This may not be the case – the industry may just be transforming the current structure of jobs with humanity working hand-in-hand with technology for a perfect fit. This relatively new field of business analytics has resulted in job creation in that specialists in the field are needed to implement and manage this technology. Two savvy suggestions for keeping up with the advancement is to train your current HR team in business analytics or hire new individuals who already have the exhaustive expertise in the subject.

Furthermore, not only will this system rule out the laborious, anxiety-driven process of performance management but it can build a positive performance-driven culture for the company. Technology and business analytics have assisted us so far as to even make performance management an objective process where an application may be used to inform an employee on their performance and whether they are meeting their goals. This affair ultimately takes the dreaded task away from the manager, and removes personalised feelings from employees. Feedback that is received entirely objectively, can allow employees to improve their own performance without feeling scorned or ashamed. Removing micromanagement can also allow them to feel more capable and less stressed. Evidently, the system is accompanied by great advantages.

How will you know the system is working?

Companies tend to hesitate in the process of implementing a business analytics system, because, essentially, how will you know it is working? Well… the answer can be coined in single phrase- ‘the system will tell you itself”.

Conclusion

Business analytics is driven by data and trusting attitudes. It may be a novel process but investing in skilled analysts or human resources development will have a positive impact on the performance of the system.

Not only will your company thrive – based on logical assessments and predictions – but it may supplement the negative performance review process for more motivated, higher performing individuals – a worthy end result for the investment.

Written by:

Dr. Mark Bussin
CEO, 21st Century
[email protected]

Daniela Christos