Human capital management (HCM) supposes to maximize employee performance in service of their employer’s strategic objectives. However, current HCM systems are mostly bookkeeping. For example, most HCM softwares/services provide
- Enrolling or changing benefits information
- Reporting life events such as moving or having a baby
- Acknowledging company policies
- Viewing pay statements and W-2 information
- Changing W-4 tax information
- Managing a 401(k) account
- Viewing the company directory
- Submitting requisition requests
- Approving leave requests
- Managing performance and goals
- Viewing team calendars
These are all important HR tasks. However, they are hardly associated to “maximize employee performance”. Even worse, current HCM systems are passive. Taking performance and goals management as an example, one and his/her manager enter the goals at the beginning of years and input the performance evaluations and feedbacks at the end of year. So what? If low performance happened, it has already happened for most of a year!
Currently HCM systems are lack of supports for HR practitioners and managers to actively measure, monitor and improve employee performance. To be fair, it is pretty hard to measure employee performance in real time, especially for long term projects. On the other hand, many studies (see the famous report Engaging for Success) show a clear correlation between engagement and performance – and most importantly between improving engagement and improving performance. That is, organizations with a highly engaged workforce significantly outperform those without. Therefore, engagement is a good proxy to performance and engagement analytics should be an organic part of HCM software/service.
Even though employee engagement is gaining recognition in HR community, it has not become a priority in many companies. The 2011 CHRO Survey by Cornell University found out that among 200+ largest U.S and European companies, “less than 20% of CHROs surveyed identified ’employee engagement’ as a CEO priority for HR. While not significantly lower than ‘cost control’, this result may highlight that CEOs are not yet enlightened to the importance of engaging the entire workforce and are still focused more on reducing costs, even at the expense of engagement”.
Clearly, it is a challenge (and also opportunity) for us to provide engagement analytics measuring the engagement levels in real-time. Fortunately, it looks very promising to make notable progress in this area with the advances of big data, NLP, data mining, social network, random graph, and NoSQL. IBM seems already done some interesting work.