Author: Sarah Fister Gale

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The Promise of Big Data in Workforce Management

Almost everyone in the human resources software world is talking about big data, and how having access to workforce analytics will change the way companies make decisions about human capital.

“The companies that leverage workforce analytics effectively will win the war for talent,” says Michael Capone, chief information officer at software giant Automatic Data Processing Inc.

And every software provider in the industry wants to be the one to help them do it.

At Taleo Corp.’s September conference, Jason Blessing, the company’s executive vice president of product development, touted the company’s commitment to Big Data and predictive analytics for recruiting; SucessFactors Inc. is eagerly promoting its new talent analytics capabilities, and pre-packaged best practice talent metrics; and ADP is spending millions of dollars on research and development to provide clients with real-time employee and industry analytics.

HR executives have been clamoring for this kind of information for years, says Laurie Bassi, CEO of McBassi & Co., a consulting firm that specializes in human capital analytics. “Good analytics help firms to stop wasting money on programs that don’t help them achieve their business goals, and focuses them on those that do.”

Xerox Corp., for example, used Big Data to cut attrition at its call centers by 20 percent in six months, according to the Wall Street Journal. Workforce analytics proved that creativity—not experience—was the best indicator of a successful customer service rep.

Understanding and reacting to these kinds of talent trends is how HR creates value for the business, yet few companies today look beyond basic hiring data because they have neither the tools nor the skills to perform the analysis.

“It’s not that companies don’t have the data, it’s that they need ways to make it more useful,” says Mark Smith, CEO and chief research officer for Ventana Research in San Ramon, California.

In most organizations, workforce data are stored in so many different systems, that if HR wants to make comparisons, they have to pull information out of multiple databases and cobble it together manually.

According to a recent survey from the Human Capital Institute, 43 percent of companies still rely on spread sheets or other manual reporting systems to capture and analyze human capital management, or HCM, data, and less than 20 percent strongly agree that HR possesses the ability to collect, aggregate and derive insight from HCM data.

“The problem,” Bassi says, “is that HCM systems weren’t designed for Big Data analytics.”

Several years ago, when many HCM tools were being built, it was inconceivable that a company might cost-effectively store a terabyte of workforce data. Now storage isn’t a problem, but accessibility is.

Every time a company adds another recruiting, talent management or performance evaluation tool, the data become more fragmented, Smith says. They don’t set aside the time or money to integrate them, which leads to more isolated workforce data that can’t be easily analyzed.

Some companies minimize the impact of disconnected systems by choosing a suite of tools from a single vendor. But even then, there are conflicts. “There will always be external data—from industry reports or social media—that won’t come from your vendor,” Smith says. “You need integrated data streams to solve these issues.”

So while software vendors are busy building Big Data tools to help companies make better, faster and cheaper workforce decisions, HR leaders need to think about how they will make the most of these tools and the data they promise to analyze.

That means hiring staff who understand workforce analytics, and investing in technology that will enable data to flow more freely between systems, Smith says. “If you want to make the most of analytics, you need integrated systems that provide a common view of the data.”

Sarah Fister Gale is a writer based in the Chicago area. Comment below or email editors@workforce.com.

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ADP Pushes Further Into HR Software

While many human resources software giants spent 2012 boasting about their shiny new cloud-based offerings, Automatic Data Processing Inc. quietly achieved a massive milestone in the human capital management category: In October it signed its 30,000th HCM client.

That may be just a fraction of ADP’s 600,000 payroll clients, but it dwarfs the customer lists of many HR software competitors, including Workday Inc., which made waves with its recent initial public offering but has closer to 300 customers.

“We are now among the largest HR system providers in the marketplace,” says Michael Capone, ADP’s chief information officer. It’s a message he admits the company could do a better job of promoting.

While everyone knows that ADP is a leader in the payroll world, many don’t realize it has offered cloud-based HR software products for about a decade that support recruiting, talent management, time and attendance, and benefits administration, along with payroll. Its HR offerings include Workforce Now for companies with fewer than 1,000 employees, GlobalView for multinational organizations, and Vantage HCM, which it launched last October for companies with more than 1,000 employees. Most of ADP’s tens of thousands of HR software customers up to now have been midsize firms, though the number of larger firms is increasing since the launch of Vantage.

“I didn’t know ADP offered HR solutions until I started asking questions,” says Bernie Presutti, vice president of HR for National Surgical Hospitals, outside Chicago. National Surgical Hospitals, which teams up with physicians to own and operate 20 specialty surgical hospitals and has 2,500 employees, implemented ADP for payroll more than 10 years ago and is currently rolling out Vantage.

ADP is making more noise in an HR software market that has heated up dramatically in the past year. Big business application players Oracle Corp. and SAP both bought smaller HR software vendors that had focused on delivering software through the cloud, or over the Internet. Computing giant IBM Corp. also joined the game, saying it would buy talent management provider Kenexa Inc. Fueled by companies’ desire for tools to maximize the value of their talent, the market for HR applications is expected to grow 6 percent this year to $12 billion, according to Forrester Research.

Over the years, ADP has been criticized for less-than-stellar service and hasn’t been seen on the cutting edge. But the company has taken steps recently to make its software mobile-friendly. ADP also touts its combination of service experience and software advances as a strength in the shift to software as a service provided through the cloud.

In addition, ADP is benefitting from being a go-to provider for payroll.

Many HR software providers don’t offer payroll tools, choosing instead to focus on more innovative aspects of the HR process.

But payroll is the first HR system that companies outsource, and HR people like to stick with the vendors they know and trust, says Claire Schooley, a senior analyst at Forrester. “It doesn’t make sense to have eight vendors for HCM,” she says. “Most companies want to stay with as few companies as possible.”

ADP is taking advantage of its broad reach and massive client database to make another leap forward in the world of Big Data.

The development team has already deployed a series of analytics and reporting tools in its HR dashboards to help companies more easily track human capital. And it is currently developing predictive analytics and benchmarking tools that take advantage of the volumes of industry data it already possesses.

“The goal is to not only give clients information about their own employees, but to let them benchmark themselves against other companies in the database,” Capone says.

The data will remain anonymous, but will let users see how other companies approach HR issues around time and labor, recruiting, compensation and talent development, all on-the–fly.

It’s one of the reasons Presutti is eager to finish National Surgical Hospitals’ roll out of Vantage. “My HR managers will be able to look at turnover and productivity by department, shift and tenure in real time,” he says. “We’ve been looking for this kind of data for years.”

Sarah Fister Gale is a writer based in the Chicago area. Comment below or email editors@workforce.com.

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Steps to Buying a Human Resources Information System

When companies choose their first human resources information system, or HRIS, there are a lot of factors to consider, says Diane Horton, a partner in PricewaterhouseCoopers Along with obvious cost constraints, she urges HR professionals to first look for a tool that will integrate with any existing systems, including payroll, then make a list of the features they want to automate, including recruiting, performance management, time entry and compensation. “Not all tools offer every feature,” she says.

Use that information to build a business case for the right product. If you can define the bottom-line business benefit of an HRIS, it will be easier to get stakeholder support, says Jason Carney, director of HR for WorkSmart Systems, an HR outsourcing firm in Indianapolis. “Spending $100,000 up front may seem like a lot, but compared to the cost of paying two full-time HR employees, it’s not bad.”

Fewer data errors, more-efficient recruiting, better performance management tracking and shorter time to fill vacancies are also measures that define the business value of an HRIS, Carney says.

The actual cost of your HRIS will vary wildly depending on the modules you choose, number of employees, the vendor, the robustness of the offering and whether you go with an installed or software-as-a-service model. But there are some rules of thumb: The most basic off-the shelf HRIS software can cost as little as $1,000, but it won’t offer much it terms of customization and will provide little room for growth. If you are buying an installed on-site solution, you’ll pay per-user licenses that will likely range from $40 to $100 per user for a basic system, to $200 to $300 per user for a more robust system, plus the cost of installation and annual maintenance fees that cover bug fixes and upgrades.

Software-as-a-service products are another option. These systems, which are accessed over the Internet, require monthly fees that can range from $2 to $10 per user, or a single capped fee of a few hundred dollars for unlimited use. These systems require no maintenance and come with automatic upgrades, making them a cheaper and easier choice. However paying a monthly fee over three to four years does add up, so it’s important to choose a system that will meet your long-term financial and operational goals.

And finally, don’t forget the training piece, says Andrea Ballard, CEO of HR consultancy Expecting Change. “Pay close attention to the support features when reviewing HRIS demos,” she says. “Otherwise on Day One, you might find out you don’t have the technical skills to use it.”

Sarah Fister Gale is a writer based in the Chicago area. To comment, email editors@workforce.com.

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Small Companies Can Benefit From an HRIS

When the Peterson Sullivan accounting firm in Seattle hired Andrea Ballard as its new head of HR in 2007, the only automated software the one-person department was using was ADP for payroll. “Everything else was done on paper or Word documents,” Ballard says.

That was fine for the time. The firm had only 70 employees in one office and Ballard could handle the paperwork. But in the years to follow the company grew rapidly, initially through aggressive hiring, which put Ballard’s paper-based system under constant strain.

She added a résumé-tracking tool, which helped for a while, but when the firm started acquiring competitors, she told the executive team she couldn’t do it anymore.

“Imagine doing new hire paperwork for 40-60 people,” says Ballard, who recently left Peterson Sullivan and launched her own HR consultancy, Expecting Change. “They wanted to bring these companies onboard quickly, and to do that we needed an HRIS.”

An HRIS is a human resources information system, a category of business software that helps organizations track employee data such as name, position, hire date, manager and salary.

Ballard isn’t alone in recognizing the appeal of an HRIS to a smaller firm. Also sometimes called human resource management systems or “core HR” software, these automated systems can allow small or midsize organizations to eliminate the manual labor and errors associated with paper-based employee tracking, freeing them to focus on more strategic people-management initiatives.

Although there is no exact number of employees or annual revenue that suggests a company is ready for its first HRIS, 100 employees is a common threshold, says Diane Horton, a partner at consulting firm PricewaterhouseCoopers. Having multiple satellite offices, or the need to combine large employee groups after mergers or acquisitions are also triggers for implementing an HRIS.

Small HR departments become overwhelmed with piles of paperwork, which leads to data errors, delays in onboarding and training of new employees, and a poor use of the HR team’s time. “They get to the point where they cannot function effectively,” Horton says.

Fortunately, the introduction of scalable software-as-a-service (saas) HRIS tools in recent years has made it easier for smaller firms to implement HR systems without draining their IT budgets. “It’s a myth that HRISs are too expensive for small companies,” Horton says. “The market has changed dramatically, and there are a lot more options for small companies today than there were five years ago.”

The interest by smaller companies in HRIS tools is part of a broader uptick in the HR technology market. Nearly a third (31 percent) of companies plan to increase their spending on HR software in the coming year, shows a Towers Watson survey of 628 global organizations released in August. The top three areas of investment include rolling out additional functionality from existing vendors, upgrading HR management systems and expanding existing self-service functions. They are making these investments because they believe they will create greater efficiency, encourage collaboration, improve quality and lower costs.

“Beyond the core costs of owning and operating technology, it seems that not only is HR technology seen as ‘needed to play,’ but also that organizations recognize that investment in it is needed for them to remain current, expand capabilities and continue to improve operations,” Tom Keebler, global leader of Towers Watson’s HR Service Delivery and Technology practices said in a statement.

There are limitations, though, to entry-level HRIS products. Saas tools are configurable but not customizable, meaning they have some flexibility but cannot be tailored completely to match all unique business methods. So companies need to choose a tool that either accommodates their existing processes, or be willing to adapt their processes to work with the tool.

That’s not such a bad thing, says Christy Gigandet, senior HR partner at Sarnova Inc., a medical products company in Columbus, Ohio. Sarnova implemented an HRIS to replace its paper-based system when the company doubled in size, to nearly 500 employees, through mergers with two other companies that also had no HRIS. “It was the perfect time to bring everyone together and find the best processes for all of us,” she says.

Sarnova implemented an HRIS tool from ADP called Workforce Now, which was an easy choice because the company already used ADP for payroll. “It was a simple transition and we didn’t have to worry about integration,” Gigandet says.

She did, however, have to rethink how the HR group operated, the reports she would want to generate and the data she needed to track. “We didn’t want to mirror the payroll department because their data was too intricate,” she says. But she was surprised by how much thought and effort it took to decide how the data would be organized.

She spent months working with ADP Inc.’s implementation team to refine corporate data so it would be relevant to HR. For example, at Sarnova accounting tracks sales employees by their pay class, but through the HRIS Gigandet tracks them by region; and while payroll breaks down employee groups by numbers, she tracks them by titles and categories.

Along with configuring the data, she implemented an internal job posting board that all employees can access, and recruiting tools that have reduced the time it takes to fill vacant positions.

But the most beneficial feature for Gigandet was open enrollment for employee benefits. “Automating open enrollment saves us at least a month in man hours,” she says.

Instead of spending weeks printing and mailing every employee’s paperwork, and manually entering selections into the system, it’s all automated and self-service-driven, so all Gigandet has to do is approve the applications. “It’s made everyone’s life easier.”

Ballard had a similar experience at Peterson Sullivan. When she first broached the idea of an HRIS with her executive team, members had never even heard of it. But when Ballard explained what it could do, and the time and cost-saving benefits that would come from an automated, paperless HR system, the executives agreed. “They are accountants,” she says. “When I related the HRIS to moving accounting files to a paperless system, it was easy for them to understand the benefits.”

Six months later she had an HRIS system installed and running, including an automated benefits open enrolment system, online performance management documents and paperless recruiting tools.

“It was a huge time savings,” she says. By eliminating the paperwork, she was able to help the company grow faster rather than slow it down. “It gave them the confidence to get the mergers done more rapidly,” she says. “Prior to the HRIS, I would have told them no way.”

Sarah Fister Gale is a writer based in the Chicago area. To comment, email editors@workforce.com.

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HR, Your Input Is Needed

In 2010, an internal survey at Dominion Enterprises showed employees were not happy with the workplace environment. And the software tools they were using to do their jobs were largely to blame.

“We had 20 different systems that didn’t talk to each other which made it easy for silos to exist,” says Susan Blake, vice president of human resources for Dominion, a marketing services company with 4,000 employees in Norfolk, Virginia. Many employees used their personal email accounts or Microsoft Outlook, and many implemented their own task management and document sharing tools without talking to the information technology or HR departments about whether they were appropriate.

As a result collaboration was cumbersome, and even sending out a companywide email was challenging, and potentially risky, Blake says. “All of our email distribution lists were static so you didn’t know if someone was missing, or if you were sending company information to a former employee,” Blake says. “Something needed to be done.”

So a year ago, Dominion’s chief information officer, working with Blake and other senior executives, rolled out an initiative to eliminate the disparate one-off tools employees were using, and replace them with an all-Google software suite, including Gmail, Google Docs, Google Calendar and Google Chat. The company also uses UserVoice, a feedback tool that can be accessed from the Google environment.

“Now we have a global solution that makes it so much easier to collaborate, share documents and get email from anywhere,” Blake says.

Employees can now access their company email from their smartphones or other devices, they can auto-populate Google Calendars with dates and events, and they can create wikis and internal Web pages using Google Sites to streamline document sharing and editing in real time. “Instead of seven managers updating seven different documents, they all make changes to the same Google document,” she says. “What used to take hours now takes 15 minutes.”

Dominion is at the leading edge of the trend to centralize implementation of work-management tools across the organization. As companies look for ways to spur creativity and collaboration, they are naturally drawn to tools that break down barriers and foster better communication.

And HR needs to be leading this transformation, says Yvette Cameron, vice president and principal analyst with market research firm Constellation Research Inc. “HR leaders need to recognize that they can’t just focus on technology for HR processes, they need to think about business-centric solutions,” she says.

Instead of merely measuring performance, HR should be helping to improve that performance by making sure employees have the tools they need to do their job more efficiently. Whether a company implements a whole suite of productivity tools, or a single product, such as Dropbox for file sharing, Yammer for collaboration or Basecamp for project management, this software helps employees improve performance, which drives better bottom-line results.

“This is an opportunity to bridge the gap between IT and HR,” Cameron says. If HR leaders team up with the IT department, they have the opportunity to head up the strategy for this category of tools.

That should be a primary goal for the HR department, says Lexy Martin, vice president of research analytics for CedarCrestone, a management consulting firm in Alpharetta, Georgia. “HR is responsible for productivity, so they need to be more invested in understanding the impact these tools are going to have.”

Yet, so far, it doesn’t seem as if they are. CedarCrestone conducts an annual survey on HR technology that focuses on companywide workforce management software used for everything from record keeping and service delivery to tracking time and labor, talent management and business analytics. This year Martin added a question asking respondents whether they were aware of work-management tools.

“Preliminary results show HR is not familiar with these tools,” she says, and that worries her. “This is a category that HR should own, or at least be involved in the process of deciding which solutions to roll out.”

Instead these decisions often fall into the hands of operations, or to individual teams or departments that implement tools that only their small group will use.

Allowing people to use one-off applications may seem like a productivity enhancer, and it can be at first, Blake says. “It starts as a way to improve efficiency, but it quickly becomes an unmanageable behemoth.”

Some of these tools can even be counterproductive from the start if they don’t have a strong strategic goal attached to them, warns Trip Chowdhry of Global Equities Research. Yammer, for example, the business social media tool, is designed to foster collaboration across the organization by exchanging short answers to simple questions.

“It may be a good idea to spend five minutes on Yammer looking for answers to a specific problem,” Chowdhry says. “But without controls or guidelines, it can end up as the Facebook for the enterprise, and gossip doesn’t equal insight.”

Even worse, these employee-driven applications can increase data security risks to the company, Cameron says. Whether employees are emailing documents to their smartphones, or sharing data using unsecured Web-based tools, when employees implement their own technologies, they don’t get properly vetted. “HR has an opportunity here to create a platform that keeps data safe while creating enablers to productivity that drive better business results,” she says.

But HR officials can only have an impact if they work together with the IT team and the business-unit leaders to choose and implement these tools, and to define specific strategic goals for their use, argues David Arella, CEO of 4Spires, a Web-based application provider in Half Moon Bay, California.

He urges HR leaders to actively research the tools their employees use today, how they affect productivity, and to work with IT to decide which ones should be rolled out to the whole organization. “Even if they aren’t directly responsible for approving the tools, they must be part of the discussion.”

They should also take the time to figure out how these tools can improve their own productivity, and provide quantitative data to support training and succession-planning programs, Blake says. Whether it’s tracking team productivity to identify high performers or following discussions posted on corporate social media sites to discover training needs or dissatisfaction among employee groups, these tools offer a bevy of valuable human resources data. “There is so much information out there that can be useful to HR,” Blake says.

The move to companywide work-management tools is only just beginning, and it shouldn’t be driven solely by the IT team. This is a chance for HR officials to take the lead, drive decision-making and link their efforts to improved productivity across the organization, Arella says. “HR people are the experts in creating a culture of communication, and that’s the most powerful aspect of productivity,” he says. “For them not to be involved in choosing these tools would be a huge missed opportunity.”

Sarah Fister Gale is a freelance writer based in the Chicago area. To comment, email editors@workforce.com.

Workforce Management, October 2012, pgs. 24-26 — Subscribe Now!

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Keeping Your Nose Clean: A Look at Ethics in the Workplace

Seven years ago, a senior lawyer at Wal-Mart Stores Inc. found out that the company had participated in systemic bribery schemes and fraudulent accounting in Mexico to gain market dominance. An investigation followed uncovering proof that more than $24 million in bribes were paid for building permits, zoning approvals and reductions in environmental impact fees—all with the full knowledge of key Wal-Mart executives.

But instead of reporting this rampant corruption and facing the legal consequences, that lawyer along with dozens of Wal-Mart executives agreed to cover it up. And rather than reprimanding the executive leading the Mexican division of the business for breaking U.S. and Mexican laws, he was promoted to vice chairman.

Not only was Wal-Mart’s behavior in Mexico unethical, but also it was potentially illegal under the Foreign Corrupt Practices Act, or FCPA, which bars U.S. companies from bribing officials abroad. The bribery allegations have led to investigations by the U.S. Justice Department and the U.S. Securities and Exchange Commission. Those investigations are still ongoing.

In the meantime, the scandal, which came to light earlier this year, could cost Wal-Mart $4.5 billion in Justice Department penalties, along with a reduction in its stock price and growth targets.

In an effort to regain shareholders’ trust, the company fast-tracked the appointment of former KPMG executive Tim Flynn to its board of directors in July. Flynn is expected to be involved with the audit committee looking into the bribery scandal internally. Still, it likely will take years for Wal-Mart to live down this legacy and rebuild its corporate brand.

It’s a cautionary tale for business leaders who are willing to turn a blind eye to unethical behavior in exchange for business profits, according to Mark Toth, chief legal officer for ManpowerGroup North America. “When companies have ethical issues, it comes down to plain old leadership,” he says. “It’s not enough to have a code of ethics in the company handbook. Employees live by what they see at the top.”

When leaders say they are ethical, but reward employees who break the law to get business, it demonstrates to employees that profits are more important than integrity, and they will act accordingly.

“You have to reward employees who do the right thing, even if it costs you time or money,” Toth says.

Yet unethical corporate behavior seems to have worsened recently. The 2011 National Business Ethics Survey from the Ethics Resource Center shows that 45 percent of employees have witnessed ethical misconduct at work, and 13 percent say they are feeling pressure to bend the rules or even break the law—up 5 percentage points from 2010.

Such pressures are even more commonplace when companies do business in places such as Mexico, where bribery and corruption are expected, says Jeff Saltzman, CEO of consulting firm OrgVitality and adjunct professor in the School of Management at Binghamton University in New York.

“When companies do business in countries that treat bribery as a competitive differentiator, they have to orient employees about what it means to behave ethically,” Saltzman says. “Corporate culture must trump local culture, and business leaders have to specifically define what that culture is.”

As government agencies crack down on illegal corporate conduct, business leaders need to take stock of their own actions to be sure they are rewarding the right kinds of behavior—and punishing those who break the rules. That’s exactly what DAI, a global project management development firm, did last November when it turned a local employee over to the Afghani police for demanding bribes from beneficiaries of a U.S. Agency for International Development, or USAID, program.

DAI oversees government-funded global development projects, and must hold itself to the highest ethical standards, says Michael Walsh, the company’s chief ethics and compliance officer. “If you take short cuts or turn a blind eye to unethical behavior, people pay attention to that, and you can quickly lose their trust.”

In the case of the USAID program, a local employee was asking for money from small-business owners in exchange for approving their grants, even though the grant form explicitly stated on the first page that if anyone on the DAI staff asks for money they should report it immediately.

One of the applicants reported the misconduct, and DAI immediately took action. Company officials removed him from the position last November and turned him over to police. In March the Afghan Special Anti-Corruption Tribunal Court sentenced him to three years in prison and a $10,000 fine.

“We worked closely with USAID on that conviction,” Walsh says. “We have a system in place to move quickly to justice.”

It’s a bold step for a group such as DAI to report one of its own, but in Walsh’s eyes and the eyes of DAI’s leadership, there was simply no other choice. “You have to let people know that they have to do the right thing or there will be consequences,” he says. “It’s the only way to feel confident that everyone will make the right choices.”

DAI provides ethics training and workshops for all of its workers, and it regularly audits projects for any violations. “People see our auditors all the time, so they know we are watching what they are doing,” Walsh says.

Making the tough discussion to turn in an unethical worker does more than root out one bad apple. It sends a message to every employee, stakeholder and the community that this company is honest, and trustworthy, Walsh says. “Our people know that the people above them have their back as long as they do the right thing.”

Sarah Fister Gale is a freelance writer based in the Chicago area. Comment below or email editors@workforce.com.

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Office Romance Policies Can Reduce Risk

The workplace is a great place to find true love. According to CareerBuilder’s 2012 annual office romance survey, 38 percent of respondents have dated a co-worker at least once in their career, and one-third of them ended up married.

“That’s a pretty good endorsement for office relationships,” says Ryan Hunt, senior career adviser for CareerBuilder in Chicago. But it also means that two-thirds of those couples broke up, which can create difficult problems for employers.

While most companies don’t go so far as forbidding any interoffice dating, they should create policies around exactly what is allowed—or risk being surprised by what workers think is acceptable, says James Hawkins head of marketing for Talk Solar Panels, a United Kingdom-based home improvement lead-generation company.

He learned that lesson from experience.

TalkSolar has a mostly 20-something staff who work day and evening shifts taking calls from people looking for home improvement price comparisons. “In the beginning, we were pretty casual and had few rules about what employees did,” he says.

That changed two years ago, when one of the company’s managers was running the night shift training a new employee how to manage the phones. In that casual workplace atmosphere an attraction blossomed, and they acted on it—right there on the desk in the call center.

One of the two parties gossiped about the encounter the next day, and word quickly spread around the office. Soon the head of the company was forced to deal with the situation.

Both employees were reprimanded and left the company shortly thereafter, and the executive team immediately put in place a zero tolerance no-dating policy for all co-workers.

“We chose the strictest possible policy because of the nature of the work,” Hawkins says. Employees are often left working alone in the evening without supervision, and the leadership simply did not want to have to deal with that situation again. “Not even G-rated behavior is acceptable, and we’ve made it a fireable offense.”

While the strictness of TalkSolar’s policy may sound extreme, experts say companies should define their policies around co-workers dating, particularly when it comes to managers dating subordinates

According to CareerBuilder’s survey, 28 percent of people who’ve dated co-workers say they had a relationship with someone above them in the company hierarchy, including their boss.

“That’s where the legal risk to the company comes in,” says Ed Harold, a partner at Fisher & Phillips, a national labor law firm based in New Orleans.

When managers date subordinates, other employees can argue favoritism. And if the couple breaks up, the subordinate may claim that he or she was coerced in the relationship in the first place, or may allege harassment if that person gets fired or passed over for a promotion. “A lot of problems can arise in these situations,” Harold says.

That’s exactly what Damien Hutchins was afraid of when he started dating Emily, a junior member of his sales team at MyWedding, a wedding planning resource website. Though the business had no formal dating policy, the two kept their relationship under wraps for a year as Hutchins moved up the corporate ladder. The company hired Emily on his recommendation—before they started dating—and within months, she was his direct report.”

“It became very complicated,” he says of the experience. When he was put in charge of her sales group after the company was acquired by a larger firm, he found himself treating her worse than the others on the team in an effort not to show favoritism.

“It was terrible,” Hutchins says. “I was afraid that if the other people on her team found out she was dating me, they would lose respect for her.”

And outside of work things were equally frustrating. She would complain to him about problems in the office that he could fix—but wouldn’t. “It just didn’t feel right,” he says.

Eventually the pressure got to him and he quit. During his exit interview, Hutchins’ boss admitted to knowing about the relationship, and said he was offended they hadn’t been honest.

Emily stayed with the company, and the two are still together, but Hutchins regrets the secrecy and stress that it caused. In retrospect, he wishes he had just moved Emily to a different division so he wasn’t her superior, which he thinks would have relieved a lot of the pressure. He admits, though, that leaving the company has been helpful to the relationship.

“Now, when she complains about work, I just tell her I’m sorry, and I feel no obligation to try and help,” he laughs.

Hutchins’ story underscores the complexity of co-worker dating policies, Harold says. “It’s not like showing up late to work,” he adds. “You can’t ask people to change their relationship.”

Instead, companies should have a set of expectations in place before such issues arise, and they should build their policies around common sense and enforceability.

“The first question you have to ask yourself is: Are you ready to fire someone for violating your policy?” If the answer is yes, you need to clearly define when and where that would happen.

Companies should consider banning relationships within a specific chain of command or department. That includes team members dating each other, and subordinates dating their boss or their boss’s boss, Harold says. “For many companies, that’s enough.”

He notes that a good sexual-harassment policy coupled with clearly defined workplace performance expectations will cover most other co-worker dating issues. If a couple breaks up, for example, and one party reports to HR that the other is harassing them, that’s covered under sexual-harassment rules.

Some might argue that management should stay out of affairs of the heart. For companies that don’t want to ban dating, but do want to reduce their risk of harassment or unfair treatment lawsuits, Fisher & Phillips offers clients a “love contract,” in which dating employees sign a statement saying the relationship is consensual. “That way, if they break up, they can’t claim coercion,” Harold says. “It adds a measure of protection against that risk.”

Sarah Fister Gale is a freelance writer based in the Chicago area. Comment below or email editors@workforce.com.

Workforce Management, October 2012, p. 10 — Subscribe Now!

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How Oracle Built up Its Human Capital Management Arsenal With Taleo Deal

In February, Oracle Corp. muscled its way into the cloud-based talent management industry by purchasing Taleo Corp. for $1.9 billion. One of many major acquisitions in the human capital management, or HCM, world this year, the move heralded Oracle’s commitment to ramping up its cloud computing infrastructure and tapping into the innovative products that smaller, more-flexible HCM vendors are offering.

It was a good move for the company, according to analyst R “Ray” Wang of Constellation Research. “Oracle was weak in the Strategic HCM space,” Wang says. “Taleo plays a key role in fulfilling this missing product line.”

The Taleo suite includes recruiting and onboarding, performance management and goal-setting, compensation, succession, and learning and development features. These tools, sometimes called “talent management applications,” are considered more strategic to companies than administrative applications such as employee record-keeping systems and benefits management software.

Oracles executives seem to agree. “Human capital management has become a strategic initiative for organizations,” says Thomas Kurian, executive vice president of Oracle product development, in a written statement when the acquisition was announced in February. He added that Taleo’s talent management cloud technology would be “an important addition to the Oracle Public Cloud.”

Cloud computing, sometimes called software as a service, or SaaS, refers to business applications delivered over the Internet and paid for on a subscription basis. It stands in contrast to the on-premise delivery approach that Oracle and SAP have used for years, whereby customers buy a license to use the software and install it on their own machines. Computing in the cloud is seen as allowing for faster implementations and fewer maintenance hassles compared with the on-premises method.

For years, Oracle scoffed at the benefits of cloud computing, with CEO Larry Ellison referring to it as merely a passing trend, back in 2008. However, the purchase of Taleo, along with cloud-based software provider RightNow in October 2011, signaled a change in opinion for Oracle, and has helped catapult the company from a laggard to a leader in cloud-based offerings.

In his June earnings conference, Ellison announced that Oracle is set to become the second-largest SaaS company in the world, behind Salesforce.com Inc., with a projected $1 billion in bookings this year. Much of this growth is being attributed to the company’s acquisition of cloud-based companies, and its promises to merge their tools with its Fusion Human Capital Management software.

In June, Oracle finally unveiled its much-touted and long-awaited Public Cloud offering, with a suite of more than 100 Fusion applications, including apps for financials, procurement, project portfolio management, and governance, risk and compliance, along with several human capital management applications.

“The main thing now is to see where Taleo fits into that suite,” Wang says. Oracle hasn’t yet stated which apps, if any, include the Taleo technology.

Analysts are also watching to see which key Taleo execs will jump ship in the wake of the acquisition. Taleo CEO Michael Gregoire left the company in May, according to his LinkedIn page. And in June Taleo lost two marketing executives—chief marketing officer Shail Khiyara who joined Spigit, a social innovation software and services firm; and Caroline Japic, former vice president of marketing who was hired by Bunchball, a gamification company. Taleo has also lost a smattering of sales and management people in the past few months, but Wang says these losses are neither surprising nor critical.

“Oracle tends to quickly consolidate overhead in the name of shareholder value, and once knowledge transfer has occurred, they eliminate redundancy,” Wang says. “If Oracle manages to keep 70 to 80 percent of the people they want, they will be happy, and it appears that most of the people they want will stay.”

Sarah Fister Gale is a freelance writer based in the Chicago area. Comment below or email editors@workforce.com.

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How to Build a Performance Management Program

You can’t just hire employees and assume they will do their job. They need guidance, oversight and periodic reviews to let them know what is expected of them, and to make sure they deliver their best performance. Companies that have effective performance management programs increase productivity, identify top performers and motivate employees to work harder. They can also ensure that their strategic business goals align with hiring and talent development plans.

But companies can only achieve these benefits if they approach performance management as an ongoing process rather than a single annual event.

One way to build an effective performance management program is to follow these four steps:

Begin by defining role-based competencies and behaviors for every employee so they know exactly what is expected of them. These competencies should include the five or six qualities that define success for every member of the organization, as well as job-specific skills and responsibilities for each individual. This process should occur as soon as a person is hired, and should be revisited annually.

“If you do this, you will get immediate performance improvements because employees will know what their boss expects of them,” says Dick Grote president of Grote Consulting Corp. in Frisco, Texas.

Decide how often you want managers to deliver performance reviews. Most companies stick to an annual assessment, but others choose to do them quarterly or following important projects. Frequent reviews can make the assessment process more fluid and give managers the opportunity to address negative behaviors before they affect an employee’s productivity. However, it can be time-consuming and difficult for managers and HR teams to manage so many meetings consistently.

Many companies today supplement traditional performance reviews with online talent management tools. Programs, such as Rypple, allow managers and peers to give feedback and acknowledgement of an employee’s work, and to track performance ratings in online databases that can be used to generate talent management reports and metrics.

(And don’t forget that old-fashioned, lower-tech feedback also is valuable. A quick conversation or email about what an employee did well or not so well in a meeting can have lasting impact. Don’t overorchestrate the performance management process such that informal coaching moments get lost.)

If you are planning to conduct one formal annual review with all employees, consider scheduling them at the same time that the leadership team is completing the annual business plan. This way employee development goals can be aligned with strategic business goals for the year.

Once you decide when and how frequently you want to deliver assessments, hold managers accountable for completing them by a deadline, and make meeting that deadline part of their own performance assessment.

Before the assessment, managers should take the time to evaluate their team. Use some sort of a rating system, say a 1-to-5 scale (with 5 being the highest score), to assess employees for each goal, competency, and accomplishment they set at the beginning of the year.

Note: When managers give these reviews to employees, they should be clear about what these ratings mean. If a “3” is an acceptable performance rating, make sure employees know that, Grote says. Otherwise anything less than a “5” can be unnecessarily discouraging.

In the assessment meetings, managers should be as honest as possible with employees. They shouldn’t feel like they need to sandwich bad reviews with compliments, or that they need to come up with problems for high-performing employees. If an employee is delivering good performance, they deserve to hear that, Grote says. And if an employee is doing a bad job, the manager should be frank with them about what they are doing wrong, and what they need to do to save their job.

To validate their assessment, managers should be prepared to provide examples of why they gave each rating. This ensures managers choose ratings thoughtfully, it demonstrates to employees why they are getting that rating, and it reduces the chance that employees will contest the assessment.

When the meeting is over, managers should secure acknowledgement from the employee in writing that they had an opportunity to review the evaluation—even if they didn’t agree with it.

On the designated deadline for completion, the HR director should collect these assessments, then use the data to set their own talent goals for the coming year.

Performance assessments generate a tremendous amount of valuable data—but it only adds value if it is incorporated into the human resources-planning process, Grote says. “It’s the manager’s job to assess individuals, but it’s HR’s job to make strategic decisions based on those assessments.”

Along with supporting compensation decisions, this data can be used to justify new training programs, identify candidates for fast track career development and help define long-term succession planning.

If you are going to take the time to conduct these reviews and rate your entire staff on their performance, then take advantage of the data. If you simply file the assessments away in a drawer you are wasting an opportunity to improve the business, and to increase the strategic value of the HR function.

Sarah Fister Gale is a writer based in the Chicago area. Comment below or email editors@workforce.com.

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The New HR Software Landscape

Earlier this year, Central Dupage Hospital in Winfield, Illinois, was looking for a new talent management system. The HR team compiled a short list of possible vendors that included Taleo, a growing software-as-a-service HR software company. Then in the middle of the final review process, Taleo Corp. was acquired by Oracle Corp.

“The acquisition didn’t determine our final decision, but it did give us pause,” says Shawn Fitzgerald, director of HR operations for the hospital. “We wanted the right software, but we also wanted a culture fit, so we needed to consider the look and feel of that parent organization before we could make a decision.”

Ultimately, the hospital went with Cornerstone OnDemand, one of the few remaining independent HR software vendors left. And while the decision had more to do with Cornerstone’s history of working in the health care industry than its independent status, Fitzgerald worries what will happen if the company is acquired.

“We saw its independent status as a negative,” she admits. “We saw what happened to Taleo and SuccessFactors, but we don’t know if Cornerstone will be acquired.”

She’s not alone. A few years ago, dozens of independent HCM vendors offered a variety of products. But over the past year, business software giants have cleared the field, making a series of acquisitions that leave just a handful of independent vendors in their wake.

In the past 12 months or so, Infor acquired Lawson Software Inc., SAP acquired SuccessFactors Inc., Salesforce.com Inc. bought Rypple, Oracle acquired Taleo, and Saba Software acquired Human Concepts.

This sudden acquisition frenzy should be no surprise to anyone, says Ray Wang, a Constellation Research analyst. “It’s the natural progression of the marketplace.”

Like many industries, HR software went through a period of rapid growth and innovation, which led to a crop of startups offering the option of HR applications delivered via the software-as-a-service method—in which clients rent software over the Internet instead of installing products on internal computers. Once those startups started to show promise, the larger legacy software companies—such as SAP and Oracle—decided they were ready to get into the game.

“After trying and failing to build their own offerings, they started acquiring the innovators and assimilating them into their own products suites,” Wang says. “In the end, a few companies in the pure-play HCM space survived, and they will continue to consolidate and expand,” he adds in reference to human capital management.

This transformation is giving remaining vendors such as Kenexa and Cornerstone OnDemand, an opportunity to push innovation forward while the acquirers focus on integration. That could be a draw for a certain type of buyer, Wang notes. “The independent vendors will continue to be nimble, early adopters, which is appealing to companies interested in innovation.”

But it’s also forcing customers to ask themselves whether they want to work a vendor who may be the next one to go.

“No vendor can give you an absolute guarantee that they won’t be acquired,” says Peter Reeves, HR process and technology manager at engineering giant Bechtel Corp. “That’s why everyone is paying attention to these acquisitions.”

Bechtel was a client of SuccessFactors when it was purchased by SAP last year. That acquisition was fortunate for Bechtel because it was also a customer of SAP. “However if SuccessFactors had been purchased by Oracle, that would have been troubling,” Reeves says.

And therein lies the dilemma. Companies want a vendor with a viable business model. But if there’s a chance they may be acquired, that adds risk. The acquiring firm may dump your favorite features, or reprioritize development of HR functionality. Or they might not be a good culture or technology fit.

On the other hand, there is the concern that an independent vendor won’t remain viable for the long run without the backing of a larger firm, says Fitzgerald. “Bigger organizations have more resources, which makes them a lower risk.”

Ultimately, customers need to decide if the fear of acquisition is worth the reward of independence.

“The answer depends on what you are trying to do,” Wang says. If innovation is important, independent vendors may be more attractive because they have the flexibility and freedom to focus on delivering HR products that are purely cloud-based—that is, delivered over the Internet via the SaaS model. Independent vendors also can also offer customers more clout in influencing HR product direction and the chance to participate in beta projects because human capital management is their top priority.

If, however, longevity, standardization, and integration are more important, the larger software companies may be more appealing, particularly for big customers that have already invested in these legacy business systems.

There is a trade-off, says Rudy Karsan, CEO of Kenexa, one of the remaining independent HCM providers. “You lose your ability to impact the HR road map if you go with a larger vendor and your voice disappears,” he says. “But you can assume they will still be around in 10 years.”

In the end, the choice usually comes down to who owns the system, says Adam Miller, president and CEO of Cornerstone OnDemand. “If the IT department drives decision-making, the ERP company will win,” Miller says. ERP stands for enterprise resource planning software, another term for the soup-to-nuts business software provided by vendors such as Infor and Oracle. Miller adds: “If the HR department chooses, they tend to go with best of breed HCM providers.”

And, regardless of which vendor a customer chooses, buyers can be comforted by the fact that, in the world of SaaS, if a relationship doesn’t work out, you can extract yourself fairly easily. “It’s a license agreement, not a hardware purchase,” Fitzgerald says. “You still have to make a three-year commitment, but if a vendor isn’t meeting your needs after that, you can just move on.”

Whether an HCM tool is being offered by an independent vendor or a software giant, customers must now think about what new features will make these products even better in the future, Wang says. “There are a lot of basic needs in this field that still aren’t being met.”

He predicts that in the near term, vendors will focus on developing cloud-based social recruiting tools, and adding predictive analytics and advanced performance management features. “The convergence of these trends will eventually lead to more innovative business processes that meet the needs of employees from ‘hire to retire.’ “

Sarah Fister Gale is a writer based in the Chicago area. Comment below or email editors@workforce.com.