Performance Management and the Role of L&D
By Sue Todd
Corporate University Xchange (CUX) is witnessing unprecedented change in corporate training as the remit of this supporting business function continues to expand and responsibilities of its leaders grow. This is in large part due to the increasing importance of talent to organization success. This continues to become clear in a myriad of ways through:
- Rising focus on leadership and key talent in mainstream business publications
- Government (the European Union in particular) involvement in driving new minimum standards for workforce knowledge and skills
- Global labor studies predicting significant shifts in talent pools and impending shortages
- Increasing corporate concern over the mass exodus of baby boomers and their knowledge and experience
These looming talent concerns are certainly behind fluctuations in corporate training where CEOs often are the new driving force behind training department transformations; where business executives are being appointed to the Chief Learning Officer role with greater frequency; where board members consternate over succession plans perhaps more than new technology investments.
The function formerly known as the training department, currently acknowledged as the learning and development organization and now possibly amidst a re-branding campaign as industry publications and thought leaders readily attach the moniker “learning and performance,” is stretching itself and finding new boundaries.
The CUX 8th Annual Industry Benchmarking study (go to www.corpu.com to participate), that is currently capturing more than 2,000 data points related to the current state of learning, development, leadership and performance in companies around the world, will shed significant light on major, evolutionary changes that are taking place as organizations angle for competitive advantage by differentiating themselves through people and knowledge.
As a precursor to this seminal study on a watershed period in corporate education, CUX wanted to understand the nature of and degree to which the L&D function is expanding to incorporate performance management. CUX launched an introductory research project to study emerging questions about performance management such as:
- Is L&D actually subsuming performance management and becoming the primary catalyst of strategy execution?
- To what degree is the role of Chief Learning Officer/Vice President of Training being expanded to include ownership for performance?
- What is the current shape of the technology market that hopes to automate performance management processes?
The CUX Research Report on Performance Management analyzes data from more than 150 organizations, and includes in-depth interviews with more than 15. Participants ranged from as few as 2,300 employees to well over 50,000, with the average at 24,000 employees. New and important trends were revealed in discussions with organizations like John Deere, Bank of America, UBS, Caterpillar, HSBC, Sanford Health and Highmark Blue Cross Blue Shield.
The CUX study illustrated that while performance management processes have similarities at a macro level, the details of those processes are as different as the organization that manage them. This is one reason why technology can’t easily automate the processes out of the box and most organizations are applying significant customizations to their PM systems.
Major highlights in the study showed that:
- CEOs are often driving the adoption of a single enterprise-wide approach to performance management. In companies where this has been true, CEOs attribute improved business performance results to the effective implementation of consistent performance management techniques.
- While organizations hope to achieve more consistency by cascading goals, there’s only so much that can cascade. And face-to-face dialogue to set effective, meaningful and related goals is still the most important factor in goal setting.
- Many organizations believe they have mastered the mechanics of performance management and are now focused on strengthening the quality of the interactions and dialogues that take place between managers and employees to improve the outcome and impact of the performance process.
- Forced ranking programs are losing their popularity and many organizations are trying to overcome the lack of trust fostered through those programs
- Very few organizations have integrated their learning and performance systems. So while Individual Development Planning is often conducted during the performance planning process, the lack of integration makes this a more daunting task for managers and their employees.
- Technology is beginning to highlight that many managers and teams have not been capable of writing effective goals. This fact was not obvious when organizations were using paper-based processes.
Performance management is not a new organization process but is receiving significantly greater attention as companies recognize its potential to achieve greater alignment and to improve strategy execution. Literature continues to emphasize that strategy is meaningless without stellar execution, and in support of that idea, performance management gains new credibility as a business tool. Because of its new importance, job titles and responsibilities are changing in the corporate learning and HR areas as organizations find the best fit for performance management.
Learning teams often note their ownership for driving change and success in enterprise-wide strategic initiatives, which become the “content” for most goals in the performance process. Additionally, learning teams typically own 50 percent of the performance process when it includes individual development planning.
For these reasons, learning executives often are being asked to take on ownership for this critical process or at least are working very closely with HR counterparts who own it. The final home for performance management will be decided as the concepts of human capital and talent management continue to evolve.
Sue Todd is the CEO and President of Corporate University Xchange. She can be reached at stodd@corpu.com.
| The Executive Summary of the Report, Performance Management: A Critical Lever for Executing Business Strategies is available on the new performance management community website, performance.corpu.com. CUX members can download the full report from the Research Collaboratory at corpu.com. |
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