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It’s easier and more affordable than ever to integrate systems for learning and performance management.
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Mike DeVries, SPHR, knew the status quo needed to change. "We didn’t have a good system on goals [and] development plans, tracking progress throughout the year," says DeVries, vice president of human resources at Cummins Mid-South LLC, a Memphis, Tenn., company that distributes diesel engine parts. "More time was spent administering [appraisals] than looking at effectiveness." In addition, the company did not have defined learning offerings for all employees.
Then, Cummins Mid-South acquired two other distributorships in 2003, and suddenly the already inadequate system had to accommodate 550 employees, more than twice the previous number. "Our needs changed drastically," says DeVries.
In response, the company sought automated solutions. It could have chosen one system for the appraisal process and another for managing learning, but instead it opted for an integrated learning and performance management solution. Today, DeVries’ world is much different. "Now, individual goals are aligned with corporate goals," he says. "We can calculate the effectiveness of [employees’] reviews and goals, and the system identifies training needs."
More companies are integrating their learning and performance functions as technology makes it easier and more affordable. And in today’s economic climate, experts say, employers need an integrated talent management approach to leverage their most valuable asset: employees.
Meeting in the Middle
Talent management experts have been calling for integration between learning and performance for years. But until recently, the technology often fell short, says Leighanne Levensaler, director of talent management research for Bersin & Associates, a learning and talent management research firm based in Oakland, Calif. There were learning management (LM) systems, and there were performance management (PM) systems, but the two did not work together. As LM and PM technologies have "matured, they’ve converged," says Levensaler.
At the same time, the prevailing philosophies surrounding these HR functions have converged, too. "Training has been disconnected from HR and talent initiatives," says David Karel, vice president of product marketing for SuccessFactors, a learning and performance management systems provider in San Mateo, Calif. "Now, with technology and the data that makes it available, you can start from ‘What is the company trying to achieve?’ and align with that strategy throughout the organization."
Most integrated LM and PM systems are based on a competency model. Competencies, or skills, are identified for each job position and become the basis for performance appraisals. The development plan is a seamless part of the appraisal process: After the manager rates the employee’s performance in each competency, the system identifies gaps between the employee’s rating and the desired rating for that competency.
Those gaps then populate the employee’s development plan. The system can recommend learning and development opportunities to address gaps, based on available curriculum. And managers can enter additional development goals, such as independent reading, outside seminars or classes, or mentoring.
The employee can log on at any time to review his or her development plan and mark off completed goals. Most systems can be set to send automatic messages to managers and employees to remind them of upcoming goal deadlines. At the next appraisal date, the manager and the employee have a clear record of the employee’s development activities.
On the other side, the learning team can take a broad view of aggregate competency gaps across the organization and plan training accordingly. HR professionals have struggled to demonstrate the value of training to executives. An integrated system can help address that issue with data quantifying training’s impact on employees’ competency ratings, individually and at department, division or companywide levels.
"In the old world, the learning organization was tracking the number of people trained," Karel says. "Now, learning can tie what they are doing to productivity. They can show much more directly how they are impacting the company."
When comparing providers, it’s important to define exactly what "integration" means in each case. Some systems offer tight integration of all learning and performance functions in one sign-on. Others integrate the learning catalog into development plan functions but do not provide a seamless connection with the more operational aspects of learning management, such as class registration.
A Fit for All Sizes
A decade ago, LM and PM systems were the domain of large companies, which were the only organizations that could afford these systems, Levensaler says. "Now, midmarket companies say they need it to be affordable and simple."
Experts say integration now is actually easier for smaller companies that currently have no automation than it is for larger companies with more resources. "They don’t have large HR silos," Levensaler says. "Generally, the same person in HR is shepherding both [learning and performance]. They’re not burdened by existing infrastructure." This was the case for Cummins Mid-South. It went from manual processes to an integrated solution offered by Halogen Software, a talent management technology provider in Ottawa.
That’s not to say larger businesses or businesses with distinct learning and performance systems and processes can’t integrate. After years of running on homegrown systems, Qualcomm Inc., a wireless communications company in San Diego, recently integrated its internal PM system with a learning management system provided by Plateau, a talent management solutions provider based in Arlington, Va. "We did a very thorough analysis over several years," says Tamar Elkeles, Ph.D., Qualcomm’s vice president of learning and organizational development. Today, Elkeles’ team and Qualcomm employees enjoy the robust reporting and registration capabilities of Plateau’s Learning Management System and the custom and familiar functions of the internally developed PM system.
Many larger organizations have a patchwork of disparate systems and processes that hamper integration. "We had many business units … doing their own thing," says Angela D. Rose, SPHR, director of talent process in the talent strategy department at the American Cancer Society (ACS), an Atlanta-based organization. "None of the processes incorporated both learning and performance together, and few of them allowed much visibility for management to see how employees were progressing." Last year, the ACS’ talent strategy group began implementing an integrated talent management system powered by SumTotal, a Mountain View, Calif.-based technology provider. The system will ultimately support nationwide consistency and the organization’s goal of creating fulfilling careers through continual learning, development and performance.
The project has taken more than a year. But Rose says it is worth the investment. "The integrated learning and performance approach simply makes sense," she says. "We have a single place where employees can take charge of their careers by managing their progress, enrolling in training, developing clear career paths and aligning their goals with the ACS’ core competencies. And even better, all up-line managers have visibility to see how employees are progressing in an easy-to-use org-chart view. Employees and managers have ready access to their information, including transcripts, in a matter of minutes."
Many companies fall in between these scenarios. Let’s say your company already has a system in place to automate part of the process, while the other side is still done manually. "The key question is: What systems do we already have in place today?" says Levensaler. "It doesn’t make a lot of sense to go with another provider." Most vendors have expanded their offerings in recent years to include modules ready for integration; in most cases, this approach is the easiest and most cost-effective way to achieve learning and performance integration.
Small Investment, Big Payoff
New delivery models that require little or no capital investment help make integrated solutions accessible to small to mid-size companies. The software-as-a-service (SAAS) model provides a hosted web-based solution for a monthly subscription fee and makes sophisticated functions available to even the smallest companies. Even better, hosted solutions require no in-house information technology support.
Three factors impact the cost of hosted integrated talent management technology: the number of users, the number of modules purchased and the length of the contract. Commitments vary from one to five years, with three years being average. The fee per employee decreases as the modules and length of the contract increase. Depending on these variables, the costs average $2 to $7 per employee per month.
Experts say cost savings and efficiencies gained more than justify the expense. "There’s a competency framework that underlies both [learning and performance management]," says A.G. Lambert, vice president of marketing for Saba, a talent management technology vendor based in Redwood Shores, Calif. "Being able to develop and define these supporting elements in the processes once can save quite a bit of money from an IT perspective and at the same time make employees’ lives a lot easier."
At Cummins Mid-South, a Six Sigma analysis in 2008 showed that technician turnover was down about 25 percent compared to 2007, an improvement that DeVries credits in part to the new automated and integrated process. Experts support that connection. "Employees will leave if they don’t see a career path," says Jon Ciampi, vice president of product management for SumTotal. "By identifying skills gaps and a path to get there, you can let employees actively manage their own careers."
DeVries also estimates that time spent on the appraisal process has been slashed in half, while the results have drastically improved. "Appraisals are more consistent, there’s more content, and employees know what they are being assessed on," he says.
Integration can provide HR managers with the data to make critical decisions in this challenging economy. While a training agenda can become misaligned in a few months, Levensaler says, with an integrated approach, "as initiatives change for the organization, the training group can be more nimble."
Available data can also inform staffing. "Without a lot of hiring, you need to find ways to utilize talent differently," says Elkeles. With an integrated system, managers can easily view up-to-date information on employees’ skills. "Say we need 30 new multimedia engineers," says Elkeles. If the system can identify 15 current employees with the necessary skill sets, "then we only have to hire 15."
Whatever their starting point and chosen solution, HR professionals who have integrated learning and performance management have no interest in going back.
"Without a system like this, it’s hard for a manager to understand how to do a development plan and follow through on it, to identify skills gaps and track those," says DeVries.
If you’re "trying to keep up with improving performance without a system like this," he continues, "I don’t see how you can get there."
The author is a freelance writer in Baltimore.
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