Author: Gina Ruiz

E nterprise Rent-A-Car has developed one of the most sophisticated college recruitment programs in the country, yielding thousands of hires each year. Not all companies, however, place the same level of emphasis on reaching out to this young audience. One of Enterprise’s key competitors, a rental car company of similar size, hired about five interns last year.

    “These two companies are in the same industry,” says Steve Rothberg, CEO of CollegeRecruiter.com, “yet their perception of college interns is 180 degrees different.”

    Employers that don’t yet understand the strategic value that Gen Yers play in the labor force could suffer talent shortages in the future. This group of individuals is a critical source of workforce inventory—the batch of interns recruited this season can be harvested for entry-level positions next year.

    “Companies need to think of interns not only as a source of educated yet inexpensive labor, but also as the next wave of leaders,” Rothberg says. There are about 4 million U.S. college students, of whom 1.5 million to 1.75 million are in their junior or senior year—the prime years for internship recruitment.

    The good news for employers is that there are far more students available than the number of internship openings. The bad news, however, is that the batch of high-potential candidates—those who rank high in their class or attend a brand-name college—is small, and the competition for them is fierce.

    “The best students have tons opportunities being thrown at them,” Rothberg says.

    Breaking through the noise, while challenging, is not an impossible task. The most important measure that recruiters can take, says workforce consultant and author Sylvia Henderson, is to find out as much as possible about Gen Yers—their likes, their pet peeves, where they hang out, etc. This type intelligence paves the way to more effective targeting strategies.

    The medium is the message
An employer that doesn’t use the appropriate tools to reach this finicky audience could be in for some big trouble, says Brian Krueger, president of CollegeGrad.com.

    “Students will be hesitant to work for a company that they think is out of sync with them or with the times,” he says. Employers that have a weak Internet presence are particularly susceptible to being overlooked or, even worse, snubbed by this segment.

    A recent survey from CollegeGrad.com underscores just how important the Internet is for students looking to get their first job. The report, which polled 500 respondents, highlights that the Internet is by far the most widely used job search tool. Some 60 percent of the respondents say it was the best source to get information on entry-level jobs.

    “There has been a fundamental shift in how college students conduct their job search,” Krueger says. “As recent as 10 years ago, the Internet was only a minimal factor in the entry-level job search. Now it is the dominant way that college students search for entry-level jobs.”

    Job fairs ranked second, with almost 20 percent of survey participants noting it was the best source for finding out career information. College career centers and classmates ranked third and fourth, respectively.

    Utilizing the appropriate media, however, won’t do the trick in attracting young talent unless the content is tailored to them, Henderson says. She recommends developing material, such as brochures or displays that specifically offers information about a company’s internship program. This is particularly important during career fairs, as it may not be overtly obvious that a company is also hunting for potential internship candidates in addition to full-timers.

Generating buzz
   The Internet, job fairs and career centers are all indispensable when it comes to reaching college students. But in order to build a consistent base of fans on campus and solidify a brand presence, employers are going to have to generate buzz as well.

    Companies can gain ground on this important front by sponsoring special events, according to Rothberg. He cites MasterCard as an example of a company that is adept at organizing high-profile events that give it a competitive edge during recruiting season.

    The company recently anchored its recruitment efforts around a special contest in which participants were required to write a story explaining who they were and why they want to work there. The event was marketed heavily on targeted Internet sites and on campuses, which helped to raise brand awareness.

    “They gained a lot of momentum from these efforts,” Rothberg says. But what he thought was exceptional about the marketing campaign was its pitch.

    “It made it appealing to work for the company,” he notes. “The students became the chasers instead of the other way around.”

    Although highly successful, MasterCard’s campaign was costly. Companies with tighter budgets can resort to several low-cost yet powerful tools that can be used to spread the word on campus, such as blogging or creating a profile on the social networking Web site Facebook, which draws millions of college students each day. Both of these methods are grossly underused, Rothberg says.

    Blogging is not only an inexpensive tool to create brand awareness, but it can also play a critical role in quelling what Rothberg refers to as Gen Y’s obsession with transparency. He encourages companies to allow existing interns keep a journal of their daily experiences and post them on a special section of the corporate Web site.

    Rothberg offers one note of caution: Don’t over-police the blogs. While the interns should be given certain guidelines for blogging, such as not disclosing sensitive information or the names of clients with whom they interact, they should be given a lot of freedom.

    “If the blogs aren’t going to offer an honest depiction of what it is like to work at a company, the chances for failure are pretty high,” Rothberg says. “These people are savvy and they place high value on transparency.”

Creating a positive experience
   Recruiting qualified talent is just one part of the equation in creating a successful internship program. “If you’re going to recruit at the same colleges next spring, you better make sure that the interns this year have a positive experience,” Henderson says. “Word will spread around campus about the type of employer that you are—good or bad.”

    She recommends applying the same sound workforce management practices that full-time employees receive.

    “Put yourself in their shoes,” she says. “Treat them the way you would like to be treated”

    Some measures include giving interns responsibilities that are meaningful. Chances are that fetching coffee and making copies won’t be yield a satisfactory experience, she explains. In addition, employers should be prepared to offer interns constructive feedback, both positive and negative.

    Interns need mentoring. Given their lack of experience in the workforce, they may need guidance on issues that are otherwise common knowledge among full-time workers. For instance, employers should not assume that interns are well-versed in the dress protocol of an office.

    “Guidance is a necessity,” Henderson notes. “But it should be applied with balance, otherwise you run the risk of being considered a micromanagement employer.”

Don’t wait until the last minute
    Employers that wait to start looking at students until they are in their senior or junior year of college may have already missed the boat, Henderson explains. There are many innovative employers that begin establishing relationships with Gen Yers years before they even set foot on a college campus, and thus have the upper hand when it comes to attracting them.

    Employers can avoid having to play catch-up by being proactive and targeting students early on. High schools and organizations such as the Girl Scouts are good starting points, Henderson says.

    Companies can provide training or volunteer services within those institutions. They can also send a speaker or supply print materials, such as pamphlets, that provide tips on professionalism, dress code, business ethics, etc. “This measure doesn’t cost much, but you can get a lot in return,” she says. “You’ll be at the forefront of their mind when they look for their first internship or job.”

If CEO Derek Mercer gets his way, this could be a big year for Vurv Technology. His goals for the Jacksonville, Florida-based talent management software provider: increase revenue from $40 million to $50 million; make two more acquisitions of $20 million or more apiece; and take the company public. He recently spoke to Workforce Management staff writer Gina Ruiz at the Vurv Revolution 2007 conference in Las Vegas.

Workforce Management: Some say it’s only a matter of time before Vurv goes public. What pieces of the puzzle still need to fall into place before an IPO happens?

Derek Mercer: From an organizational point, we are already there—we have undergone some recent restructuring, we have a strong base of clients, and our balance sheet is solid. What we’re doing now is working with the board of directors to identify potential acquisition targets to build more mass.

WM: There are rumors that Peopleclick is for sale. Would you ever vie for that company?

Mercer: If they were serious about selling themselves, we would take a look at them. We are not shy about going after companies, much like the way we went after Unicru, where we put in a bid. This year we just made an acquisition and we hope to close two more by the fall.

WM: Do you have a time frame for the IPO? Is it contingent upon anything?

Mercer: We are shooting for the end of this calendar year. But we are not fixated on a specific date. What we are fixated on is making strategic acquisitions, and if that means pushing the date back, then so be it.

WM: You have entrenched Vurv into many workforce management arenas—onboarding, performance management, compensation, etc.—except for training and development. Is this a strategic area that you would get into through an acquisition?

Mercer: I’m not sure about training and development. It is a critical area in workforce management, but it is also very cyclical. It is one of the first initiatives that is eliminated when companies hit tough times. Also, that industry uses a licensing model, while we focus on subscription-based models.

WM: Would you ever forgo an IPO to sell Vurv?

Mercer: For the right price, anything is possible. But it would have to be an exceptional offer that far exceeds a multiple of three. I have already been approached and declined several offers.

Employers are sending more female workers on international assignments than ever before, according to a report from Mercer Human Resource Consulting. The study looked at 100 multinational companies with about 17,000 male and female employees working overseas.

    This trend reflects the increasingly global nature of modern companies. Nowhere is this dynamic more palpable than it is in the Asia-Pacific region, particularly China, which reports the greatest rise in number of female assignees.

    Survey respondents in the Asia-Pacific region say they have 16 times more females on assignment this year than they did in 2001, according to Mercer principal Yvonne Sonsino.

    But this is not the only region experiencing a boom in the number of female assignees. Respondents from North America report having nearly four times as many female assignees, while their European counterparts say they have twice as many.

    The trend is expected to continue. Fifty-five percent of respondents anticipate that the number of female assignees will increase steadily over the next five years. Only 4 percent of the survey participants believe the number of female assignees will decline.

    For their part, female workers are willing to take on assignments overseas because they can open opportunities for professional advancement.

    “Going on expatriate placements can be an important step on the career ladder, and women are increasingly interested in taking these assignments,” Sonsino says.

    Yet, going overseas could entail personal drawbacks for some female workers. Many companies’ policies are outdated and do not reflect the changing profile of their expatriates, according to Sonsino.

    Almost 85 percent of the companies in the study reported that female workers go on overseas assignments alone. By contrast, 60 percent of companies said the majority of their male assignees are accompanied by a partner.

    “Studies suggest partners of successful women also tend to have high-powered careers,” Sonsino says. “When a woman is offered an international assignment, their partner may be less willing to make career concessions to accompany them.”

    Paltry benefits could contribute this dynamic. Sixty-six percent of survey respondents provide no incentives or support to help partners settle in the host location. And in the instances where support is available, it is usually only given when specifically requested. For example, only 7 percent of respondents offer partners information on the local job market, though 37 percent said they would provide it if assignees asked.

    Companies do little in helping single parents on overseas assignments.

    “Expatriate programs are simply not designed to cope with providing support for single parents,” Sonsino says. “There is an increasing need for companies to update their policies in this area.”

    In the survey, 12 percent of companies said they have female expatriates who are single parents, yet only 4 percent provide additional support to this group of assignees.

Companies spend millions of dollars annually on sophisticated applicant tracking systems. However, they may not be getting their money’s worth when it comes to receiving accurate, in-depth information to help make sound recruitment decisions, says Don Firth, president and CEO of AllRetailJobs.com.

He points to unsettling findings in a simulation test recently conducted by the niche retail job board. The purpose of the study was to gauge the effectiveness of drop-down boxes, which are commonly used in ATS reports to provide metrics on the source of hire. Candidates encounter drop-down boxes during the online application process, when they are asked to respond to questions like “Where did you hear about this job?” The box gives them a list of sources from which to answer.

There were 60,000 participants in the test, all job applicants who were requested to identify where they had learned about the position, using the menu from the drop-down box. The entire universe of the candidates should have indicated AllRetailJobs.com, since they applied directly from the site, according to Firth.

However, five out of six candidates cited alternative sources other than AllRetailJobs.com—essentially an inaccuracy rate of 83 percent. Almost half of the respondents in the study did not provide any indication of where they had been tipped off about the job opening.

And some 34 percent of participants in the study chose “another source” from the drop-down list. The responses were misleading, as they could have meant any number of hire sources like Monster or popular search engines such as Yahoo and Google.

Firth says the high error rate could stem from a variety of reasons, including candidates’ forgetting where they heard about a job initially or getting overwhelmed by the extensive lists that often appear in the drop-down boxes. There’s also the lethargic factor. An applicant might think it is easier to indicate “other” rather than to rack their brain seeking the correct answer.

“The candidates don’t care about the accuracy of ATS reports,” Firth says. “All they want to do is get through the drop box as fast as possible so that they can start the actual application process.”

Although Firth knew ATS reports were inaccurate when it came to pinpointing where the candidates came from, he admits being surprised at the magnitude of inaccuracy.

One potential solution would be for ATS vendors to adopt use of automated tracking tags, since this technology would be able to identify more accurately the original source of hire. But even these devices are not foolproof, he says. If the automated tracking tags don’t provide enough depth to go back to the initial point of contact with a candidate, a company could still be receiving inaccurate information.

Given the large sample size tested in the study, the problem could be more serious than initially thought, Firth says. He suggests that companies take a careful look at the quality of the information they receive in the ATS reports.

“Having clear and precise information is crucial for recruiters because it helps them assess which tools are most effective at filling in open posts,” he says.

The genesis of the study stemmed from concerns that a couple of recruiting clients had raised about the number of résumés they were receiving from AllRetailJobs.com. After more careful analysis, one of the recruiters discovered the niche job board had actually forwarded 25,000 retail candidates. Meanwhile, the other recruiter discovered that more than 20 percent of all of its hires had originated with AllRetailJobs.com. Both clients realize there had been flaws in the ATS information they had been receiving, Firth says.

Improvements in the short term are unlikely because ATS vendors will have to make significant investments to upgrade their platforms. What’s more, many companies are unaware that the problem exists and will not put the pressure on ATS vendors to make the enhancements, Firth explains.

“There is little incentive for the ATSes to make a change,” Firth says. “Particularly if their clients aren’t pushing for it.”

Finding 5,000 employees in a small coastal area of just 450,000 people to staff a massive new luxury resort-casino was just one of the many workforce management challenges faced by Wynn Macau. Just as critical to its future prosperity is the company’s ability to retain the talent it recruited and nurtured once the $1.1 billion property opens September 5.

    The cost of replacing employees in China is about 25 percent to 50 percent of their annual salary, according to Brenda Wilson, principal consultant at Mercer Human Resource Consulting in Hong Kong. And with turnover rates of about 13 percent, avoiding employee churn can go a long way when it comes to saving money.

    Not surprisingly, the company has designed a comprehensive compensation package that not only attracts employees, but also instills loyalty. Employee development is among the cornerstones of Wynn Macau’s workforce management strategy, according to HR executive director Wendy Yu. All employees receive highly individualized training in groups of no more than 20 and are required to pass certification programs before interacting with guests of the property.

    Training is critical in Macau’s service-oriented market. Unlike Las Vegas, where the bulk of income stems from machines, revenues in Macau depend on high rollers, analysts say. Besides extensive training, other development programs for Wynn Macau employees include an education allowance and e-learning initiatives.

    Such a human resources policy may not have taken root if not for the company’s familiarity with the needs and expectations of the local workforce. Natives of Macau, located on the southeast coast of China about 40 miles from Hong Kong, tend to keep their thoughts and feelings low-key.

    “From childhood, people in Macau are taught to respect elders and authority figures,” Yu says. “This lesson is carried into adulthood and into the workplace, where employees won’t come out and tell you what their needs are unless they trust you.”

    Given these workforce dynamics, all but one of the 50 HR employees Yu oversees has had extensive experience in Macau. Yu, who was raised in Macau, has worked there for most of her 16-year career in human resources. HR leadership’s familiarity with the market has led to the creation of key policies, such as the highly specialized health insurance packages, which could prove indispensable for retaining workers.

    Wynn Resorts, which operates the Wynn Las Vegas hotel-casino along with Wynn Macau goes beyond providing the conventional medical coverage typically offered in the U.S. Workers at the Wynn Macau have access to a Chinese herbalist under the health plan. “Some people are comfortable with Western medicine, others are comfortable with Chinese medicine,” Yu says. “This is a good way to cover all of our bases.”

    There are additional benefits—such as paid leave when an employee gets married—offered in Macau that are not common in the U.S. The medical program also takes into account the critical inter-generational relationships that exist in Macau. Workers can access health insurance for their parents, albeit at a cost.

Workforce Management, August 28, 2006, p. 24 — Subscribe Now!

Keeping an eye on the job seeker’s online application experience is not an easy job, but somebody’s got to do it. CareerXroads recently conducted two quality control exercises to shed light the state of the online application experience.

    CareerXroads’ list of the top 25 corporate sites suggests that financial service providers lead the pack when in comes to catering to the needs of online job applicants. The Kendall Park, New Jersey-based recruiting consultancy combed through Fortune’s list of “America’s 500 Largest Public Corporations” to find which Web sites create the best online application experience for job candidates.

    “We looked for sites that treat job applicants like valued consumers, not like yesterday’s garbage,” says Mark Mehler, co-founder of CareerXroads.

    CareerXroads evaluated the sites based on their ability to target, engage, inform and respect job candidates. Financial service providers—which include Bank of America, Goldman Sachs, Morgan Stanley and Capital One—have the strongest presence on the list, followed closely by tech companies like Intel, Microsoft and Texas Instruments.

    “We did not make our decisions lightly,” Mehler says. “It took a lot of research and much deliberation.”

    Those Web sites that made it to the list tend to offer special features, like allowing job applicants to check remotely the stage of the hiring process they are in. In addition, these Web sites do a good job giving candidates glimpses into an organization’s corporate culture.

    “Features like ‘a day in the life of an employee’ are important,” Mehler says. “They give applicants useful information to determine whether they are a good fit with the company.”

    Mehler says that a wide cross section of companies are pushing to improve their online recruiting efforts. The financial service providers and tech companies’ edge is attributed–at least in part–to necessity, because the hiring needs in these two industries are highly demanding, Mehler notes.

    In its efforts to better understand the experience that online job applicants go through, CareerXroads also conducted a mystery job seeker study. In this exercise, the consultancy targeted Fortune’s list of “America’s Best Companies to Work For.” CareerXroads created a résumé for a fictitious job seeker, Mr. Ted E. Baer, and enlisted 20 volunteers to apply electronically. One of the objectives for embarking on this study was to determine the level of attention that is paid to résumés that are received from job applicants.

    The results reveal that rendering personalized care to job candidates could be falling by the wayside at some of the country’s top employers. There were 96 companies that sent generic responses to Ted E. Baer, either electronically or by mail, to let him know that his résumé had been received, was being considered or was being forwarded to a hiring manager. There were two companies, including a casino, that actually called Baer for interview.

    Usually, contacting an applicant who has submitted a résumé is standard protocol, but in this case it would be a bit odd. Ted E. Baer’s résumé indicates that he worked as an administrative assistant to “the man in the yellow hat,” and that some of his responsibilities have included tucking in his bosses’ three children each night.

    Only two companies, FedEx and Alston & Bird, were proactive enough to look into the matter further and contacted CareerXroads directly.

    “The results tell me that many companies that are simply not paying enough close attention to the résumés they are receiving,” Mehler says. “It is lazy recruiting 101.”

    According to CareerXroads, the 25 members of the Fortune 500 that seem to best understand how to treat today’s job seekers are:

1. Agilent
2. Bank of America
3. Bell South
4. C.H. Robinson
5. Capital One
6. Federated
7. Ford
8. General Electric
9. General Mills
10. Goldman Sachs
11. HCA
12. Intel
13. Kodak
14. Eli Lilly and Co.
15. Merck
16. Microsoft
17. Morgan Stanley
18. Proctor & Gamble
19. Sherwin Williams
20. Southwest Airlines
21. Starbucks
22. Target
23. Texas Instruments
24. Whirlpool
25. Xerox

As part of this study CareerXroads also enlisted 20 volunteers to apply to each company on Fortune’s “America’s Best Companies to Work For” list.

When the new crop of fresh-from-college hires starts filtering into workplaces this fall, their employers might be surprised at their expectations. You can forget about workers who aren't interested in your 401(k) or the details of the health plan.

    Today's college undergraduates, burdened with credit card debt, worried about a potential collapse in the Social Security system and influenced by overprotective parents, are anxious about what the future holds and are increasingly turning to employers for stability and security, a recent study suggests. They are specifically searching for well-rounded compensation packages, mirroring benefits that have typically been coveted by older workers.

    Annual base salaries continue to be upcoming grads' most important decision factor in considering a job offer, according to Claudia Tattanelli, CEO at Universum Communications. The Philadelphia-based research and consulting firm recently surveyed 29,046 undergraduates from 123 colleges. More than 80 percent of participants said they would accept or reject a job based on the salary that a company is willing to offer.

    However, considerations like medical coverage and a 401(k) plan are also on their radar screens, ranking in second and third place, respectively, ahead of vacation days, paid holidays and guaranteed annual bonuses. Almost 40 percent of undergrads responded that family health insurance would be a make-or-break factor when evaluating a job offer, even though most do not have dependents. And, while retirement is decades away, about one-third of undergrads said that having a retirement plan is also an important decision factor.

    This focus on security and stability among young people is partly a response to media coverage of issues like the collapse of Enron, the presidential elections and the September 11 attacks, which exposed vulnerabilities in the social and economic safety nets, Tattanelli says.

    In addition, undergraduates are of a generation that is highly influenced by their parents, those baby boomers who are acutely aware of the important effect that health insurance and retirement plans can have on quality of life.

    The single most important step that companies can take to attract and engage the future workforce is to realize that young adults are savvy and unique, Tattanelli says. And unless companies are prepared to revise their view of how the next workforce generation thinks, they may struggle to achieve their hiring goals.

In most companies today, performance is being managed the old-fashioned way: through annual evaluations and paper-based processes, with just a touch of homegrown automation. Goals are being cascaded from the top of the organization, but technology tools are largely absent from the process, meaning that the links between individual goals and corporate success are likely to elude many employees.

    Those are the conclusions of a survey of 218 HR leaders at companies of 2,500 or more employees conducted by Workforce Management in conjunction with Lisa Rowan, program manager of HR and talent management services at IDC, a global market intelligence and advisory firm. The survey was conducted in April. Participants were drawn from the membership of Workforce Management’s online user community.

Some key findings of the survey:
    4The happy respondents are not all that happy: Only 5 percent of the respondents are very satisfied overall with how performance management is handled in their organization; 41.5 percent are somewhat satisfied.

    4The highest level of satisfaction—66 percent—is with how the performance management process identifies top performers. The second-highest level of satisfaction—just under 66 percent—is in goal setting. The areas respondents saw as most lacking are the performance management system’s integration with succession planning, and performance management as a tool for retention.

    4Nearly 65 percent of the organizations say their performance management systems employ only a little automation.

    4Of those that are formally automated, 21 percent are using their enterprise resource planning system or HR information system to manage performance. The remainder are using either a separate “best-of-breed” system, such as SuccessFactors, or a best-of-breed system that’s part of a larger talent management suite, such as those provided by companies like Softscape or Workstream. (Best-of-breed performance management vendors focus exclusively on offering performance management or performance management in conjunction with other performance-related talent functions such as succession planning.)

    4Of those not automated today, nearly 45 percent plan to make a change in the next 12 to 18 months.

    4Of those that are automated, 26.5 percent say they plan to change their system in the next year or so.

    That’s a situation indicating “ample room” for performance management vendors who want to court new customers. Rowan says the level of dissatisfaction with the current performance management processes and the market opportunity it represents are the two most striking points in the survey.

Opportunities and unknowns
    If best-of-breed companies see golden opportunities in the dissatisfaction among respondents, they may be in for a shock: Nearly 57 percent who say they are going to automate their system plan to use their ERP or HR information system to do so. Only 6.5 percent plan to go for a best-of breed system.

    That’s a surprise, Rowan says, given the success that the best-of-breed performance management providers are enjoying.

    “The likes of SuccessFactors and others are experiencing double- and triple-digit year-over-year growth,” she says. “Where is that coming from, if companies are using their ERPs?”

    It may be, Rowan says, that the respondents aren’t yet acquainted enough with the technology tools available, aren’t really sure what they intend to do, and are pointing to their current systems as a solution until they more definitively make up their minds.

    IDC says spending on software and services for performance management in 2005 was $973 million and forecasts that spending will reach $1.8 billion by 2009 growing at a compound annual growth rate of 16 percent.

    “This particular market, as we’ve noted at IDC, is in its relative infancy,” Rowan says. “There are a lot of unknowns.”

    That uncertainty is further supported in the survey: 26 percent say they don’t know how they’ll accomplish their performance management automation project.

    What is known is that most companies are getting by with just a few technology tools at their disposal. Rowan says the systems are likely built on Word or Excel templates, with some automated features, such as notifications of performance evaluation due dates, created by the organization’s IT department.

    “You would think that Microsoft is the world’s biggest HR vendor,” says Jason Averbook, CEO of Knowledge Infusion, a talent management consultancy based in San Ramon, California.

    This rudimentary way of doing things is sure to be a source of headaches for the companies that say they integrate cascading goals into their performance management processes.

    Cascading requires identifying key specific tasks for each employee—from the C-suite down to the entry-level ranks—and establishing individual performance goals that can collectively focus an organization on the achievement of its objectives.

    Experts say automation is particularly important for larger organizations that are cascading goals. The level of coordination that is involved becomes too intricate to be done manually. Nevertheless, most respondents say that’s what they’re doing. That’s a tough task, Rowan says.

    If corporate leaders have a goal to grow revenue by 20 percent, and that is being manually translated into a goal appropriate for each member of the organization, some of the connections will be difficult to make, she says.

    “If I’m not in sales, you can put that on my evaluation as a goal, and that means you have to go through the process of translating that into a process I can control,” Rowan says. “It’s interesting that so many are doing that, with no tools to help them. It would be very, very time-consuming.”

    The survey also shows that the annual performance review is still king. Fifty-six percent of survey participants say they conduct performance reviews once a year; 18 percent say they carry them out semiannually.

    One surprise is that 15 percent of survey participants say they manage performance continuously. This batch is probably from those companies that use powerful technology and take the process very seriously —more the exception than the rule, according to Rowan.

Unhappy with the status quo
    Technology, however, doesn’t answer all performance management prayers. Of the respondents who already have automated systems in place, 38 percent say they are either somewhat or very dissatisfied with the status quo.

    When asked, 26.5 percent say they are planning on changing their system in the next 12 to 18 months.

    There are areas where the discontent is more pronounced. Nearly 50 percent of respondents say they are somewhat dissatisfied or not at all satisfied with how their organization handles performance management as a tool for succession planning. And 40 percent are either somewhat dissatisfied or not at all satisfied with performance management as an effective employee retention tool.

    But switching systems may not be the solution, according to workforce specialists. “What people have to realize is that technology is not broken,” Knowledge Infusion’s Averbook says. “It is the process that is broken.”

    A more effective approach for getting the most out of performance management is by being more responsive to the data that companies collect in the performance management process. “Information is only as good as what you do with it,” Averbook says.

    Averbook also suggests intertwining performance management with other talent management functions. The survey shows that companies are already doing this to a certain degree. Seventy-nine percent claim strong integration with compensation, but given the lack of automation, this has to be a largely informal integration, Rowan says. Another 72 percent link learning and development with performance management.

    There is much room for improvement. In succession planning, for example, 48 percent of survey respondents say there is no integration at all with performance management.

    It’s not an easy gap to bridge. It’s much easier to draw a correlation between productivity and compensation than it is to do so between productivity and who should receive a promotion.

    Determining whether an employee should move up the ranks requires much more than just their specific job performance. Factors like experience and leadership abilities also come into play, Averbook says.

    The ideal of performance management—clear lines of sight between each employee and the larger organizational goals, frequent feedback and performance evaluations that are tightly integrated with compensation, succession planning and retention, to name but a few—is unlikely to emerge unless companies incorporate automation and drop ineffective processes.

    How companies get there is as individual as the organizations themselves are. Rowan says the Workforce Management survey reveals information that lines up with other work IDC has done in the performance management arena.

    The one variance is that in this survey, the number of companies relying on their ERPs to shoulder the weight of performance management is higher than in other studies conducted by IDC.

    For any companies that are tempted to create an automated performance management system in house, Rowan cautions against it. It might look simple, but there is more to it than just automating a paper trail.

    Vendors are better able to handle the complex interactions involved, she says. And the product developers also have included best practices in their systems, based on the experiences of many other buyers. You might want to benefit from their knowledge.

Workforce Management, June 26, 2006, p. 47-49 — Subscribe Now!

Performance management means different things to different people. It can be a simple system of performance reviews, or a tightly knit process of cascading goals and top-to-bottom workforce alignment. It might involve technology, and some would argue that employee performance can’t be managed in a large organization without it.

    But no amount of automation or technology can help a company realize its performance management objectives unless it begins in the right place. “Creating a performance-driven organization is ultimately about culture,” says Mark Stiffler, CEO of Synygy, an incentive management company in Chester, Pennsylvania.

    For any performance management plan to be even mildly successful, employees must first be able to accept it and then understand what is expected of them. It’s an undertaking that is dependent on the corporate culture.

    Workforce Management sat down with a group of human resources leaders and experts in the field of compensation during Synygy’s spring Performance Conference in Los Angeles to gain insight into their experiences with performance management. Much of their discussion focused on the workforce-related challenges of adopting and living with performance management plans that are pushing toward pay-for-performance goals.

    The companies, which are at different points along the performance management continuum, shared lessons that they have learned along the way. The participants represent a variety of corporate cultures and each provided a unique perspective on the subject.

Beyond mechanics
    Fear of the unknown is one of the biggest hurdles for Advo, the nation’s largest direct-mail company. The company has 3,700 employees and is based in Windsor, Connecticut. Employees there know that the organization’s new performance evaluation process may undo notions of who the high performers are within the company.

    Sometimes a department will have a high-performing employee, but his or her work has nothing to do with the overall goals of the organization, says Steve Wohlert, national vice president of sales operations. Rewarding that kind of performance is probably counterproductive.

    Performance management can usher in changes that go against the cultural grain of an organization. Workers at King Pharmaceuticals, a drug manufacturer based in Bristol, Tennessee, had grown accustomed to receiving bonuses whenever the company performed well. So when it came time to transition to a variable pay model last year, it was no surprise that some of its 2,800 workers were confused and resistant.

    “Our employees definitely had a sense of entitlement,” says Ardyce Plosser, director of compensation and performance management. “They thought they deserved to be rewarded regardless of their contribution to the overall corporate success.”

    What made the transition particularly tricky is the fact that King Pharmaceuticals is built from smaller companies that were acquired throughout the years. Each had its own culture and compensation model. The company has launched an aggressive education campaign to help workers understand what variable pay is all about.

    Friction related to performance management can erupt even within corporate cultures where variable pay already exists, says Robert Worobow, corporate vice president of human resources at Trustmark Insurance of Lake Forest, Illinois. The diverse departments within the company had developed their own ways of figuring out pay for performance and were hesitant to adopt a centralized procedure. Each division had a deep sense of ownership over its own process.

    “Aligning the system was like trying to take away their baby,” Worobow says.

Leveling with poor performers
    Most companies have no trouble citing good performance. But getting them to actually say that people are performing badly is another matter.

    “At Schwab, we have three possible ratings for employees. The bottom one is never assigned,” says Maureen Hilts, vice president of compensation at Charles Schwab & Co. The San Francisco-based discount broker has about 14,200 workers.

    That creates a disconnect between what managers write in performance reviews and the reality of how well, or poorly, employees do at helping the company achieve its goals, Stiffler says. He warns that not leveling with people about their performance cements an entitlement mentality. That hampers a company’s ability to move forward with a performance management plan, let alone adopt a variable compensation structure in the future.

    True performance management gives workers a very specific index number of where they stand relative to their peers.

    “Employees should be able to say, ‘I am in the 20th percentile and therefore I am considered excellent, but I am at the bottom of the excellent pool, so I need to improve,’ ” Stiffler says. The evaluations should be given not once a year, but on a quarterly basis in order to give employees feedback that is timely and useful, he says.

Support from the C-suite
    One of the most important challenges for Wells Fargo is getting a wider cross section of employees in human resources to speak the language of corporate leadership, says Peter Kurlander, vice president of corporate compensation for the San Francisco-based bank.

    Achieving this goal may involve improved leadership skills and the use of metrics because HR quantifies important processes, like employee productivity and level of compensation. “We need to be able to synthesize what happens at the HR level and translate it into information that the CEO can make sense of,” Kurlander says.

    Since adopting performance management can have serious implications, strong support from the C-suite is crucial. At King Pharmaceuticals, the switch to a more performance-based system prompted employees to push for higher base compensation. They wanted more predictability when planning out a household budget.

“What we need to work on is helping employees draw a line of sight between their performance and corporate objectives.” –Maureen Hilts, Charles Schwab & Co.

    Meanwhile, there was turnover among claims employees at Trustmark when performance-based pay was introduced, Worobow says.

    But the fact that the CEOs at both companies were fully committed to making the transition enabled the performance management programs to take hold.

    The fact is, performance management could never take off without support from corporate leaders. That’s because it entails making some sacrifices. In many cases, companies need to amass enough money to create pools for a variable pay structure. This could mean cutting employees’ pay or withholding merit increases. Those are difficult decisions that only company leaders can make. It could take four to five years before an organization has the resources to move to a variable compensation model.

Alignment
    Far too often, organizations embark on performance management plans without first having a clear vision of what they want to accomplish, Synygy’s Stiffler says. And in the cases where tangible goals are actually set, leadership often falls prey to the temptation of focusing too narrowly on financial objectives, allowing strategic ones to fall by the wayside.

    The key is to have a balance between the two approaches, Stiffler says. Such financial objectives as revenue, margins and productivity are critical, but companies should not underestimate the importance of strategic changes in the workforce.

    Certain companies design goals that promote modifications in the behavior of employees that will ultimately yield financial rewards. An example of this would be enhancing client services, which could ultimately improve customer satisfaction and loyalty.

    “Financial goals are relatively easy to set and meet,” Kurlander says. Strategic goals take more time and commitment, but they have the most potent impact on the bottom line, he says. Strategic goals may entail creating a new way to interact with clients, changing the direction of the business or deciding to create new products.

    At Synygy, which practices the performance management it preaches, none of the established goals are financial ones.

    “Our objective is to create fundamental changes among workers,” Stiffler says. The company’s strategic goals, however, are always connected to financial objectives.

    Similarly, Trustmark also blends its strategic and financial goals. Employees are evaluated on the basis of the quantity and quality of their work, Worobow says.

    Regardless of whether corporate objectives are strategic or financial, organizations should always tie the pay structure of employees to them, Stiffler says. All of Synygy’s 500 employees are on a variable pay structure.

Cascading is critical
    Unless an organization can convey its objectives and clearly explain to employees how their performance can help realize its goals, performance management programs will fail.

    “Leadership usually has an understanding of what they need to do in their line of business,” Schwab’s Hilts says. “What we need to work on is helping employees draw a line of sight between their performance and corporate objectives.”

    There are various ways in which organizations can ensure that their cascading messages are heard. Advo, for example, plans to customize communications materials to the individual departments within the company. Tailoring the language is usually more effective than designing a generic communications campaign, Wohlert says.

    Wells Fargo’s leaders take every opportunity to repeat the corporate objectives during speeches and presentations and at special events. In addition, the company publishes the objectives in Connections, its monthly employee magazine. Consequently, a large number of Wells Fargo employees can recite the company’s goals by heart.

    These include putting the customer first, underscoring the importance of delivering good client services and valuing team members. The last value ties in with teamwork and diversity. It behooves them to know the objectives since their salary is tied to them, Kurlander says. The company spends nearly $2.3 billion, one-third of its compensation budget, on variable pay for its 153,000 employees.

Survival of the fittest
    Critics of performance management warn that pay-for-performance programs can create hyper-competitive organizations in which workers run roughshod over one another to move ahead in performance rankings. Stiffler recommends setting up a performance management plan that goes beyond the rankings that can create a dog-eat-dog culture.

    “There is an inherent flaw in plans where the only way to get higher is by stabbing someone in the back,” Stiffler says. A teamwork component for any performance measurement should help. Certain employees at Trustmark, for instance, are evaluated 45 percent on the basis of quality, 45 percent on quantity and 10 percent on teamwork.

    But before blanketing every performance management evaluation with a teamwork component, Kurlander suggests taking a critical look at the nature of a position.

    “Sometimes there are jobs in which people are not really part of a team,” he says. Bankers, for example, sometimes form client relationships and close deals largely on their own. An unwarranted teamwork component could actually have a negative effect on employee retention, particularly if weak performers diminish the earning potential of a highly productive employee.

    Organizations may want to consider whether an employee is actually part of a team, whether the team is permanent and whether everybody is an equal contributor to the group effort.

Workforce Management, June 26, 2006, p. 50-52 — Subscribe Now!

No matter what the reasons are for why employers are trying to bolster diversity in the workplace, one thing is certain: Recruiting minorities is a crucial challenge.

    With the prospect of aging baby boomers retiring and the desire to reflect the increasingly diverse U.S. population, employers will have to rely on minorities more than ever. Collectively, African Americans, Hispanics and other minority groups make up 30 percent of the overall population, according to the U.S. Census Bureau.

    Perhaps this is why diversity is a serious matter at large companies, such as American Express.

    The company, which has 66,000 employees worldwide, systematically targets minorities at colleges with diverse student populations, reaches out to ethnic organizations and sponsors mentoring programs for minorities, says Henry Hernandez, chief diversity officer for the financial services provider in New York. Kenneth Chenault, chairman and CEO of American Express, in 2001 became the first African American to head a Fortune 500 company.

    But diversity for diversity’s sake is not the only reason why companies strive to develop a mixed workforce, says Steve Pemberton, chief diversity officer and vice president for Monster Worldwide, a New York-based online recruitment specialist.

    Employers are also attracted to the fattening wallets of minority consumer groups. Hispanics alone have a purchasing power of almost $700 billion, according to HispanTelligence, a market research specialist.

    Some companies believe that having a diverse workforce facilitates their understanding of minority groups and provides a leg up on the competition when vying for market share, says Martha Ceja, manager of diversity services at Bernard Hodes Group, a talent consulting company based in New York.

    But developing a diverse workforce is easier said than done. Minorities are grossly under-represented in strategic and influential positions in American corporations, according to statistics from the U.S. Equal Employment Opportunity Commission. In addition, other issues, like recruiting and retention, also pose big hurdles in diversity management.

    There is no silver bullet for these issues. But the consensus among workforce experts is that if employers really want to tip the scale in their favor, they are going to have to adopt diversity management as part of their mainstream strategy.

    “Companies cannot view diversity as just another program or initiative–it has to be a way of life,” Ceja says.

Going grass-roots
    Working the job fair circuit is not always a fruitful endeavor. While these venues often bring employers and minorities together under the same roof, they do not guarantee that qualified candidates will apply for a job, or, for that matter, even show up at a company’s booth.

    In the grueling game of recruitment, the only foolproof method of success is having a strong corporate image, one that fires up candidates into seeking an employer out by name before actually setting foot in a job fair.

    “The days of participating in job fairs without additional support are over,” Pemberton says. “Smart employers are competing for top-of-mind access among candidates.”

    Offering free pens and stress balls will not help employers attain this goal. But grass-roots efforts and fostering partnerships with ethnic communities could do wonders. Sponsoring special events like parades, Little League games or concerts not only raises awareness about a company, but also lends more credibility to its efforts, Ceja says. “It lets minorities know that an employer cares about their community.”

    A coalition of employers in Cedar Rapids, Iowa, including Rockwell Collins Inc. and Alliant Energy Corp., is doing just that. The group is reaching out to cultural and social institutions as well as to businesses and churches in hopes of learning more about diversity and attracting minority talent to the area.

    Entrenching roots in communities is also good because it puts employers in direct contact with influential leaders, which can help to breed a positive image. Many of these leaders can be found in organizations for professionals, such as the National Society of Hispanic MBAs or the National Black MBA Association.

    Sometimes it is the special touches that can make a difference. Merck & Co., known for its creative approaches in reaching out to minorities, hosts mixers for professionals at special locales, such as the African American Museum in Philadelphia. For its part, The New York Times lends its conference space to key professional associations looking for a place to meet after business hours. These are effective ways to establish rapport and collect contact information in a more intimate setting, experts say.

    Employee referral programs are also useful for spreading favorable word-of-mouth about a company. However, employers don’t always get the desired results from these initiatives because they provide little guidance or few meaningful incentives. Human resource leaders have to be proactive in this arena–for instance, by giving employees tips on where to look for potential referees.

    If a worker is a member of a professional organization, such as the Association of Women Industrial Designers, managers can suggest this as an appropriate venue for finding potential candidates. Another way to inject momentum into these referral programs is to offer employees rewards for meeting certain referral goals.

    Aside from grass-roots efforts and the employee referral programs, employers can also rely on good-old-fashioned public relations to build a strong reputation among minorities. For example, companies can create positive buzz by tapping key media sources, such as ethnically oriented magazines and newspapers, to make it known when a minority professional has been hired or promoted to a strategic position.

    However, Pemberton warns companies against spending too much time vying for recognition. Cultivating the image of diversity without actually changing the nuts and bolts of workforce strategy could lead to problems down the road, he says.

    “A lot of the problems with retaining minority employees start at the recruiting stage,” he says.

Holding on to talent
    As challenging as finding qualified minority talent can be, retention is an even more daunting task. Turnover rates often hamper building a critical mass of minorities within an organization. Attrition among minorities has not been formally quantified, but anecdotal evidence from workforce specialists indicates that it is a chronic problem.

    This troubling trend can be mitigated through education, explains Thomas Kochan, professor of management at MIT’s Sloan School of Management. But the level of instruction that is required should go well beyond simply promoting acceptance of other cultures and ethnicities.

    “Adults don’t change attitudes,” Kochan says, “but they can learn to be more effective workers with the right skills sets.”

    Employees should be instructed on issues like communicating effectively and conflict management—all tools that provide pragmatic skills for enhancing the dynamic of a group. The emphasis of the training should be helping workers to draw out the talent and creativity in one another, Kochan says.

    Tools like mentoring programs not only lead to better group dynamics by blending people of different backgrounds and levels of experience, but they also aid in the development of minorities. Mentors can offer special tips on navigating successfully within an organization.

    “If minorities see ethnic figures in positions of power, it gives them something to aspire to,” says Irma Davidson, director of talent acquisition at Homestore, an online retailer in Westlake Village, California.

    Centralizing mentoring programs is always a good idea because it makes them more formal, says Elizabeth Holmes, senior vice president and chief learning officer for Roosevelt Thomas Consulting & Training, a diversity workforce specialist in Decatur, Georgia. Mentor programs are also important because they give minorities a platform from which to showcase their skills and voice ideas—which could be instrumental when seeking a promotion. This is one area where most experts agree that employers can drastically improve.

    Lack of career advancement is one of the biggest sources of frustration for minorities, and often a major contributor to high turnover rates, Holmes says. Compared with white males, for instance, it takes minorities longer to be promoted. Formal feedback is a good way to let employees know where they stand and what they need to do to get to the next level of their careers.

    The flow of information should be a two-way street, however, with companies learning valuable lessons from their employees, as well. If handled properly, affinity groups can help employers keep a finger on the pulse of minority groups within an organization. The key to having a successful affinity group is to give them structure and provide guidance, otherwise they run the risk of becoming just another social gathering, Holmes says. In addition to leveraging affinity groups for gauging how minorities think and feel, they are a good way for employees of similar backgrounds to come in contact with one another.

    “They can learn the ropes together and lean on each other,” Holmes says.

    Training and education initiatives should be accompanied by deeper workforce management policies, experts advise. One way to improve the quality of employee development within an organization is to hold employees in influential positions accountable for how they manage talent.

    “The human capital decisions that managers make can have a direct impact on attrition,” Holmes says.

    Equally important is realizing that conflict is bound to emerge within any truly diverse organization. When friction arises, managers should be trained to meet the challenge head on, because denying that it exists will not make the problem disappear.

    “Getting along is nice, but it is not the end goal for employers,” Holmes explains. “Being productive and getting the job done is what’s important.”