We were all given three 2012 priorities by our senior management -- manage costs, improve productivity and fight for the best talent. It looks like we're sticking with these three for 2013, too.
Most of us are buried in 2013 budgeting right now, so I thought I'd check with you before things are finalized. I've got some data for you that can improve your department's impact on 2013 business results (and probably improve your career prospects as well).
Do your line items include investing in manager training and in data-driven planning for next year? If so, you can count on improving productivity in your company in 2013. If not, then you may find yourself facing the same productivity issues on November 19, 2013 that you are facing today. A situation that would make HR part of the problem not the solution -- if your leadership are paying close attention.
When you think about investing for 2013, be eagle-eyed about the potential for an actual return on your investment. How can you really know what will pay off? There is a lot of data available to you.
Recently, Ann Bares wrote about research that one out of every two managers is terrible at accountability, the competency required for pay for performance. Earlier this year, I wrote about research from Towers Watson showing that the majority of companies report that they train managers in accountability (helping employees on goal setting and in giving feedback). But additional results made it clear how much of that training time and money is wasted!
In this research, almost all of the companies with lower Total Shareholder Return (TSR) considered their training ineffective -- lots of it is training that impacts managers' skills at pay for performance, our engine for productivity. These companies are spending money designing or buying training, getting managers into the classroom and away from their work, but over 80% believe that the training is ineffective.
Do you want to be part of this group -- making no impact on productivity and spending money with no payoff? It looks like lots of us are. In their recently published 2012 -- 2013 Talent and Rewards Study,Towers Watson tells us:
"Only one-third (34%) of U.S. companies agree that they measure the effectiveness of their performance management process. Those that do are more likely than other organizations to report that they measure differentiation in performance rating and merit or bonus payouts, and they are also more likely to conduct after-the-fact review of the correlation between performance ratings and pay decisions . . ."
The data-driven companies can see what they are doing well and identify the best targets for investment in training and outcomes.
A compelling illustration of the insights that data-driven implementation and assessment can achieve.
Just this week, I attended a Bay Area Compensation Association meeting where Frank Wagner, Compensation Director, and John Schirm, Compensation Manager, from Google spoke at length about the data-driven planning that they complete prior to total compensation and equity plan design. Few of our companies have the 40 Compensation FTEs that they have, but that doesn't mean we're out of the running.
Google uses data inputs available to all of us -- employee survey results, focus groups and salary management data. They also use a sophisticated preference analysis technique called conjoint analysis, but Frank and John agree that you can achieve a lot without that level of sophistication.
Part of the solution? Are you going to have the data to measure that? Think about the kinds of conversations you could have with leadership -- and the kinds of investments you may subsequently be able to make -- if you did.
Margaret O'Hanlon is founder and Principal of re:Think Consulting. She joined Ann Bares and Dan Walter of the Compensation Cafe to speak the unspoken -- "Everything You Do (in Compensation) Is Communication" -- at the WorldatWork 2012 Conference. Margaret brings deep expertise in total rewards communications and change management to the dialog at the Café. Before founding re:Think Communications Consulting, she was a Principal in Total Rewards Communications and Change Management with Towers Watson. Margaret is Deputy Director of the International Association of Business Communicators (IABC) Pacific Plains Region. She earned her M.S. and Ed.S. in Instructional Technology at Indiana University, Bloomington. Creative writing is one of her outside passions, along with Masters Swimming.
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