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What does a global organization do when it finds itself using a plethora of different review processes? That was the challenge facing ADP, a provider of human capital management solutions that employs 55,000 employees in more than 100 countries. Over several decades, it had acquired 27 employee review processes, all with different requirements and ruled by different local office cultures.
In spring 2014, Deb Hughes, division vice president of HR at ADP in the Greater New York City area, led the effort to streamline the review process. The goal was to create a global process that had one common review date; would attract, reward and retain employees; and enhance their engagement.
Her team managed to whittle down the 27 different reviews to create one common review within 18 months.
“We wanted to be best-practice and best-in-class leaders,” Hughes told SHRM Online. “We really wanted to have a very definitive philosophy and approach we could share with our associates [employees] and our leaders.”
She talked with SHRM Online about how she and her team were able to transform the process.
SHRM Online: How did ADP find itself with so many review processes?
Hughes: It happened organically. Over 65 years, ADP acquired and established businesses in different countries and often we adapted our review process to those markets.
SHRM Online: Tell us about the kinds of challenges that diversity presented.
Hughes: There were no common review dates for when people would get merit increases, and there were five ratings systems in use. One country might use a 1-3 rating scale, another a 1-10 rating scale and another an ABCDE scale. Also, when you are a global company, the job architecture differs among countries. A person with the title of director may have the same duties and responsibilities as someone with the title of manager somewhere else. We continue to look at this aspect of our review process and are trying to be sensitive to, and have a better understanding, of cultural influences.
SHRM Online: How did you go about streamlining your review process?
Hughes: Nearly 60 percent of all reviews and compensation dates were not aligned with our fiscal year results. The goal was to align all the ways we think about performance so that performance was assessed against one set of goals. We focused on getting one rating scale and one system for assessing performance.
We also wanted to simplify the process for our leaders by having one time of the year when they could communicate compensation-related decisions in alignment with assessing performance and business results. It makes practical sense from a return-on-investment and financial business case. In India, for example, the prevalent fiscal year is different. The market there tends to move in April, while our focal point review date followed our fiscal year, which ends in June. We provided adjustment opportunities in April for India while keeping the merit, bonus and equity portions consistent with our global date in September.
We wanted to get supervisors’ perspectives and concerns about the kinds of performance they wanted to incent and align that with all the ways ADP thinks about performance. We expanded the employee reviews to focus on development rather than solely on performance. Associates have the same set of goals against which their performance is assessed, whether we are assessing for merit or bonus. This provides a consistent message.
In conversations with employees we wanted to know if this impacted employees’ perspective around their goals. We wanted to make sure they understood how their goals aligned overall with ADP and how their own performance would be differentiated.
We also did a pilot in spring 2014, taking early adopters through the program while we created all the communications and training materials for rollout in 2015. This gave us early wins to share as part of the full rollout.
Early on in the process, we tested ourselves against best practices in our market globally—doing so informs your strategy and gives you an understanding of what other organizations are doing that fit with what you are trying to accomplish. We also worked with an external consultant upfront on broad human capital strategy and periodically reflected on what we were trying to accomplish as a company.
SHRM Online: You said you tested yourselves. What do you mean by “test” in this context?
Hughes: We underwent an external benchmarking assessment to understand where we were as an HR organization on key processes and practices. In the assessment, we identified “pay for performance” as an opportunity for improvement.
SHRM Online: What were some strategies that worked well for you in streamlining your process?
Hughes: One of the best choices we made was taking an HR leader and partnering him or her with a compensation leader and having them work together. The field input, business perspective and subject matter expertise came together perfectly.
We also made sure we listened to everyone before making changes. We used a variety of communication channels to hear from our associates—roundtables, focus groups, the ADP internal website. We added new questions to our annual employee survey to gauge engagement toward the new process.
We had a governance committee test ideas on most of the senior leaders, and a steering committee made up of people who worked closely with our associates. We developed external benchmarking exercises to identify top HR solutions used by similar, large companies. Everyone is a stakeholder; your change-management approach needs to be sensitive to that.
SHRM Online: Did the partners work together for a given leader’s team, and determine what the resulting merit pay or bonus would be?
Hughes: The business HR leader and compensation leader worked together on aligning the guiding principles, decision-making, socialization and communications for the initiative overall. The business needs helped guide the HR approach and processes that were implemented. This combination of “HR-architected, business-led” was the winning combination to making this global transformation.
In the end, we’re trying to get to the same thing. It doesn’t mean every business unit has the same goal, but goals for associates are the same between merit and their bonus.
Kathy Gurchiek is the associate editor at HR News. Follow her @SHRMwriter.
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