A powerful transformation is underway: More successful small and mid-sized businesses are embracing "strategic HR" to drive higher performance, productivity and profits. But you probably know it hasn't always been this way.
That was then
Historically, HR has not been viewed as a key businesses driver, unlike "vital" functions such as sales, marketing, or operations. It's no wonder, then, that HR unfairly earned a reputation as a tactical back-office task, or worst case, completely unrelated to the overall health and success of the company.
...This is now!
Today, the role of HR has been radically redefined and more emphasis has been placed on effectively managing every aspect of the employee lifecycle, from talent acquisition, to performance measurement to employee compensation. This amazing shift in HR starts at the most fundamental level: helping raise the bar on individual performance not only helps employees realize their full potential, but also the company as a whole. In other words, strategic HR is ensuring that companies aren't leaving huge amounts of money on the table in the form of missed profits due to unrealized performance and productivity.
1. Make sure employees' daily efforts contribute to your company's business objectives
The first step in unlocking your company's true potential is ensuring your employees understand how their specific job/role contributes to achieving your company's business objectives. Without a consistent process of setting goals for each individual employee that map directly to your company's objectives, they may be spending too much time on the wrong activities.
In fact, leading industry analysts estimate nearly 95 percent of workers are unaware of their company's top objectives. And, that's often because an effective process to communicate and track progress against these objectives does not exist. So how can your company expect its people to work toward a shared vision — and deliver bottom-line results — if they're unclear what's expected of them?
Establishing a formal process for creating relevant goals for each employee, and monitoring/measuring performance against company objectives, unquestionably results in both individual and company success. The benefits of this approach deliver a host of positive results, such as:
- Employees and managers achieve more — through greater visibility into both individual and company-wide goals.
- Employees and managers see the goal plan — and understand how their individual goals fit into the company's business objectives.
- Creating shared employee responsibility — by cascading his or her goals with others in the company.
- Managers more easily stay in touch with employees' progress — during every phase of goal completion, and offer immediate reinforcement or coaching to keep performance and deadlines on track.
Keep in mind your success in aligning employee and company goals depends on an open and ongoing dialogue with management. This is the only way to ensure business strategy is woven in to all HR efforts, including an automated process.
Snapshot of Success: Mojave Creative — 25 employees
To compete against larger global firms and sustain profitable growth, this small creative shop wanted to ensure every employee was laser-focused on the same company goals. They needed a consistent, objective performance review process employees would trust.
In 2006, Mojave made the critical decision to automate their goal management process leveraging software that provides every employee with visibility into how their day-to-day efforts deliver on key business objectives. Within one year, Mojave saw improved teamwork toward reaching company goals — in particular, meeting an aggressive growth goal of increasing revenues by 15 percent.
2. Keep employees energized and engaged
Jack Welch, former CEO of GE — and one of the most respected business leaders of our time — wrote the book on motivating people. One of his key insights to driving phenomenal performance shows how much faith Mr. Welch had in the power of engaging and inspiring people; in a nutshell, he believed the ultimate goal of managing is not to get an employee to perform as expected, but to have them willingly go above and beyond the call of duty — because they want to.
Building a culture in which employees are energized and engaged to perform at maximum levels (and beyond) requires both strong management skills, and a consistent process for providing accurate, quality feedback. Easier said than done, of course. But recent progress in HR-software designed specifically to address this challenge is helping significantly. There are now effective means like writing assistants and coaching tools that can significantly improve the overall quality of feedback, and help managers provide:
- More relevant reviews — writing and goal management tools help managers deliver meaningful, accurate reviews so employees understand their performance against goals.
- Richer, more meaningful feedback — built-in writing tools ensure consistency between managers, and deliver a deeper level of feedback.
- Stronger, more relevant coaching — managers receive specific, actionable suggestions for coaching employees through a range of issues.
Ultimately, quality feedback is what keeps your employee's head in the game and can be used to inspire and fire them up. It also increases job satisfaction and reduces turnover — two critical factors that most small- to mid-sized businesses say they are concerned with on a daily basis.
Snapshot of success: Kathryn Beich — 45 employees
An aggressive promotional products company with a geographically dispersed management team, Katheryn Beich needed to streamline its existing paper-based performance management processes. In particular, reviews were taking up too much time, resulting in poor job satisfaction and unclear rewards for top-performers.
Only three weeks after implementing an automated performance management solution, managers at Katheryn Beich have dramatically reduced the time to complete each employee review by 50% — from six hours to just three. In addition, by automating HR processes, they were also able to tie financial rewards directly to employee performance and significantly increase employee engagement.
A final thought to help you raise employee (and overall company) performance: HR professionals in organizations of all sizes consistently report that providing their management with visibility into HR achievements is essential. Your managers need quantitative and qualitative information to support your strategic decisions about human capital. And just as sales or marketing must justify technology investments in light of business strategy, HR must also learn to do the same.
About SAP SuccessFactors HCM
With SAP SuccessFactors solutions, we believe that purpose drives people and people drive business performance. To meet business goals today and be ready to digitally transform for the future, your organization must be able to attract, develop, and retain the best people – tapping into their full potential. We innovate every day to help connect your people to your purpose and transform your workforce experience, to inspire people to perform at their best, and develop the workforce needed for the future. With a leading cloud-based HCM suite, SAP SuccessFactors solutions help more than 6,400+ customers and over 100 million people, across more than 60 industries in over 200 countries and territories, turn purpose into performance. The SAP SuccessFactors brand is part of SAP, the market leader in enterprise application software. SAP helps companies run better, with applications and services that enable our customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.successfactors.com or www.sap.com/hcm.