Defining Needs and Criteria

Our experience working with early adopters of pay-for-performance solutions points to success in three distinct areas:

TECHNOLOGY INTEGRATION: Successful technology implementation calls for seamless integration: (a) across all HRMS applications; (b) with the organization's performance and compensation processes; and ideally, (c), with the organization's enterprise portal solution. Importantly, integration of pay-for-performance with the enterprise portal solution increases portal use and ROI. Isolated, narrowly-focused solutions that do not mesh well with core enterprise systems or each other burden managers and employees while creating frustration and resistance.

FUNCTIONALITY: Pay-for-performance success demands sophisticated solutions able to deliver strong management support in several critical areas.

• Process Flow: Out-of-the-box capability should support current best-practice process flow and enable tailoring to organizational needs.
• Usability: A recent study by the Pew Internet & American Life Project reveals that 75 percent of U.S. households access the Internet at least monthly. Consequently, employees increasingly expect similar ease of use from workplace technology.
• System Maintenance & Management: The option to employ software-on-demand rather than purchasing, installing, upgrading, and maintaining it offers numerous advantages, as discussed earlier. The further option of having the software vendor manage your firm's use of the application can add even greater value.
• Compliance: With regulatory requirements and scrutiny by governments and investors on the rise, sophisticated audit and notification capabilities become increasingly important.
• Security: Protecting privacy and data integrity is always a paramount concern, one that must exist in concert with easy user access. Single password access, often including an enterprise portal, is gaining popularity.

COMMUNICATION: The extent to which technology actually facilitates performance-related communications between management and employees at multiple levels will be a key determinant of its success. It is essential, therefore, that communications capabilities address the critical functions of informing, engaging, educating, and coaching. Our experience repeatedly finds that inadequate communications is the primary reason pay-for-performance systems fail to generate positive results. Strong communications lie at the core of effective change management, yet are all too often perceived as insignificant and therefore overlooked.

Comparing Available Solutions: A Strategic Talent Management Solutions Checklist.  At any given time, the market offers a diverse set of solutions to address specific, or even multiple, aspects of human capital management. And, as with all technology, some deliver on their promise better than others. The challenge for companies, then, is to carefully evaluate options using a set of criteria that will help them make the best decisions possible.

Technology decision makers will find this checklist helpful for guiding the review, evaluation, and decisionmaking processes concerned with the acquisition of strategic Talent Management solutions. We provide it to remind organizations of the critical issues they must address in when considering any HR technology change, whether it pertains to pay-for-performance or other aspects of strategic talent management. For each solution being evaluated, the following criteria should be thoroughly addressed:

HR TRANSFORMATION:

• What is the product's ability to provide personalized information to selected user groups and subgroups, e.g. directors, managers, and employees, to facilitate change management? [Personalized communications increase user comfort and hence increase overall adoption.]
• Does the solution provide a quality user experience consistent with the expectations of a diverse and evolving workforce, and what features does it offer that accelerate user acceptance? [A contemporary, intuitive interface increases acceptance and ROI, while a substandard one impedes both.]
• What are the product's capabilities for tracking, measuring, and analyzing worker performance, and what other business intelligence capabilities are included that facilitate strategic talent management? [Dynamic performance tracking, analysis, and other functions are essential components of strategic talent management.]
• How does the tool measure user adoption, adherence, and compliance? [Measurement provides tangible evidence of project adoption rates and success. The lack of these measurements can result in uncertain outcomes.]

TECHNOLOGY INTEGRATION:

• To what extent can the product be integrated with the organization's core HRIS system, and what is required to integrate, maintain, and adapt the product to changing needs? [Integration with the market's leading HRMS solutions should be tightly managed, flexible, easily achieved.]
• To what extent are the performance and compensation management components integrated? [Integration is critical to success.] To what extent are the other product components integrated? [Ensure that your solution is integrated well beyond a single entry point, or common portal.]
• Can the product be effectively integrated with mainstream enterprise applications, i.e. a corporate portal, business intelligence tools, and training systems? [Strong integration capability reflects sound technical architecture and adherence to industry standards.]
• Can the product be effectively integrated with competency libraries, either home-grown or from thirdparty competency vendors? Regardless of which one? [Products that adhere to standards accommodate your process rather than forcing you to adopt the vendor's.]

• How difficult is the product to learn and use? [Intuitive products help you easily gather data related to your people and use it effectively to help you make a meaningful impact on business performance.]
• What is the product's ability to manage process workflows, especially concerning performance reviews, authorizations, routing, and related tasks? [Facilitating these fundamental tasks will improve user acceptance.]
• To what extent can users format reports? [The value of reports relate directly to the ability of users to organize and format information consistent with corporate standards and user preferences.]
• Does the product have an integrated succession planning and career development capabilities? [The integration of succession planning and career development capabilities helps you identify, develop, and retain top performers.]

DEPLOYMENT OPTIONS:

• Does the vendor offer flexible deployment options? Can its products be offered on-premise, as software-on-demand, or both? [Having both options gives organizations more flexibility.]
• Does the vendor provide the option of managing and maintaining its solutions for you? [Managed, ondemand deployments reduce implementation time and dramatically lower the internal resources required for ongoing management of your applications.]

COMMUNICATIONS CAPABILITIES:

• To what extent does the solution help the organization address change management? [Communications capabilities should exist that address the critical functions of informing, engaging, educating, and coaching both managers and employees.]
• To what extent does the product contain communications components that address manager usage and adoption? [Without a concerted effort to educate and coach managers, managers often resist adopting new systems.]
• Does the solution consider the unique needs of managers and employees? [When it comes to a strategic HR message, no one size fits all. Look for a solution that allows you to deliver specific messages to diverse audiences.]

VENDOR VIABILITY:

• What is the composition and growth rate of the vendor's customer base? [A healthy customer base and strong customer growth within it are key indicators of a vendor's strength and viability.]
• What is the vendor's experience in delivering integrated solutions? [A vendor may claim hundreds of customers, but organizations must ensure vendors have experience delivering an integrated suite of products.]
• Does the vendor endeavor to build a strong customer community? [A customer community can add value for the vendor and customers alike.]
• Does the vendor have a network of partners, and if so, how does it work with them? [Partners endorse selected vendors and their products, helping to support and develop the vendors' customer bases, and ultimately lower product pricing.]