Tracey Smith is regarded as a thought leader in the field of analytics and speaks extensively at conferences and corporate events. She has over 25 years of experience in mathematics, statistics and data visualization and holds degrees in Applied Mathematics, Mechanical Engineering, and Business from well-recognized universities in Canada and the U.S.
Ms.Smith’s career spans the areas of mechanical engineering, supply chain, and human resources. Prior to forming Numerical Insights LLC, Ms.Smith led global strategic initiatives for FedEx Express World Headquarters, process improvement projects in supply chain and mathematical simulation creation for an automotive company.
She has been recognized as one of the “Top 50 Global Influencers in HR Analytics” and one of the “Top 15 HR Analytics Experts to Follow” in 2017 and 2018. She is also CPSM certified through the Institute for Supply Management.
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What are the key aspects of employee performance that a company should measure?
The application of metrics to any business area should be aligned with the highest priority goals of the corporation. For employee performance, a discussion needs to be held to determine how a certain group of employees contributes to the company’s goals. Different groups of employees contribute differently to the overall success of the business, so multiple discussions with different groups will need to take place.
These discussions should include both leadership members and the employees within an area. If the area is very large, including a sample of the employee base may be more appropriate than inviting the entire group. The employees know their work activities best, so they can determine metrics that may measure the success of their team. The leadership members included with be less familiar with the details of employee work but have better knowledge of “what success looks like” from a more strategic and forward-looking point of view.
These potential “measures of success” need to be linked to business outcomes. More detail on this process is provided in the following questions for proper metric alignment.
How can HR Analytics enhance employee performance?
Before proceeding with any actions to enhance employee performance, a company needs to ask a few questions to see if the effort makes sense.
- Where is there an issue? (Within the executive population? With your engineers? With your salespeople?)
- What is it worth to the company to fix it?
- What will it cost to do so?
Only after determining whether the reward of such an initiative is worth the effort required would one embark on such a project. Failing to examine if there is a business case for this is where many HR teams go astray.
To proceed with a project of this nature, one would first determine where a difference in performance would make the biggest impact. For two excellent references, please see the following older by very relevant books:
What do CEOs/CHROs look for in employee performance analytics?
It would be rare for a CEO to look at employee performance analytics unless that data relates to sales performance or other data that impact the company’s financial statements. If the CHRO and his/her HR team can prove that specific employee performance metrics do “mathematically” drive company performance, then the CEO would be interested in hearing about actions that can be taken to improve performance.
That said, there must be a business case to do so. CEOs are not going to invest large amounts of money to improve employee performance if the impact to the financial statements is small. The CHRO needs to align metrics to what the business needs and to prove that the chosen metrics impact business outcomes. Metrics for each company will be unique based on what needs to be accomplished in the next 1-2 years. More information on aligning, selecting and prioritizing metrics can be found here.
What is missing in terms of employee performance data that could make HR Analytics even more meaningful?
At the current time, the way that companies are measuring employee performance is rather subjective. Employees are assessed by one or only a few people and there are inconsistencies across different managers and business units. While some companies have a leveling process to make employee scores more consistent, this leveling process can take weeks to execute in a global corporation. At the same time, this leveling activity is a much lower priority when compared to business activities that need to be executed in the core operations of the company.
Most employees are currently measured against goals and activities that need to be completed within a fiscal year. A smaller number of companies also measure employees against a series of desirable behaviors. This is rare since it first requires that these desirable behaviors be determined for each job role or job family.
What is missing is the knowledge of how certain behaviors or actions that are classified as “performance data” actually correlate with business performance.
Can HR Analytics play a prescriptive role in helping employee finetune performance real-time?
Yes, it is possible for HR Analytics to play a prescriptive role in optimizing employee performance. However, from a business point of view, one would first need to assess whether the outcomes from optimized performance exceed the value of the effort and resources required to implement it.
The technology exists to collect human data from both wearables and the monitoring of human activities in the workplace. However, with the creation of data privacy laws like the GDPR and several others that are under development, it is likely that the analysis of this data will be highly restricted. Additionally, since each individual’s performance is likely driven by his/her unique factors, the analytics performed at an aggregate level may not be highly relevant at the employee level.
