On the day I met Brett Ostrum, in a conference room in Redmond, Wash., he was wearing a black leather jacket and a neat goatee, and his laptop was covered with stickers that made it appear you could glimpse its electronic innards. That was logical enough, because those circuits were his responsibility: He was the corporate vice president at Microsoft in charge of the company’s computing devices, most notably Xbox and the Surface line of laptops and tablets.
It was early 2018, and things were going pretty well for him. Despite Microsoft’s lineage as a software company, and as a brand not exactly synonymous with good design, it was making the most of its late start in the hardware business. Mr. Ostrum and his team were winning market share and high marks from critics.
But he saw a problem on the horizon. It came in the form of extensive surveys Microsoft used to monitor employees’ attitudes. Mr. Ostrum’s business unit scored average or above average on most measures — except one. Employees reported being much less satisfied with their work-life balance than their counterparts elsewhere at the company.
During Jeff Immelt’s 16 years as CEO, GE radically changed its mix of businesses and its strategy.
Its focus—becoming a truly global, technology-driven industrial company that’s blazing the path for the internet of things—has had dramatic implications for the profile of its workforce. Currently, 50% of GE’s 300,000 employees have been with the company for five years or less, meaning that they may lack the personal networks needed to succeed and get ahead. The skills of GE’s workforce have been rapidly changing as well, largely because of the company’s ongoing transformation into a state-of-the-art digital industrial organization that excels at analytics. The good news is that GE has managed to attract thousands of digerati. The bad news is that they have little tolerance for the bureaucracy of a conventional multinational. As is the case with younger workers in general, they want to be in charge of their own careers and don’t want to depend solely on their bosses or HR to identify opportunities and figure out the training and experiences needed to pursue their professional goals.
What’s the solution to these challenges? GE hopes it’s HR analytics. “We need a set of complementary technologies that can take a company that’s in 180 countries around the world and make it small,” says James Gallman, who until recently was the GE executive responsible for people analytics and planning. The technologies he’s referring to are a set of self-service applications available to employees, leaders, and HR. All the apps are based on a generic matching algorithm built by data scientists at GE’s Global Research Center in conjunction with HR. “It’s GE’s version of Match.com,” quips Gallman. “It can take a person and match him or her to something else: online or conventional educational programs, another person, or a job.”
When Brian Jensen told his audience of HR executives that Colorcon wasn’t bothering with annual reviews anymore, they were appalled. This was in 2002, during his tenure as the drugmaker’s head of global human resources. In his presentation at the Wharton School, Jensen explained that Colorcon had found a more effective way of reinforcing desired behaviors and managing performance: Supervisors were giving people instant feedback, tying it to individuals’ own goals, and handing out small weekly bonuses to employees they saw doing good things.
Back then the idea of abandoning the traditional appraisal process—and all that followed from it—seemed heretical. But now, by some estimates, more than one-third of U.S. companies are doing just that. From Silicon Valley to New York, and in offices across the world, firms are replacing annual reviews with frequent, informal check-ins between managers and employees.
How We Got Here
Historical and economic context has played a large role in the evolution of performance management over the decades. When human capital was plentiful, the focus was on which people to let go, which to keep, and which to reward—and for those purposes, traditional appraisals (with their emphasis on individual accountability) worked pretty well. But when talent was in shorter supply, as it is now, developing people became a greater concern—and organizations had to find new ways of meeting that need.
Previously in the ‘Demystifying People Analytics’ series I’ve written about where the team should sit (Part I), the skills and capabilities required to do people analytics (Part II) and the vital role of storytelling (Part III).
This time I’m going to provide examples of people analytics projects companies have undertaken to help drive both business and employee outcomes.
The five example projects outlined are spread across the employee lifecycle (workforce planning, talent acquisition, engagement, retention and compliance). Whilst the projects themselves are different, what they share in common is that they were all undertaken to help solve business challenges that were high priority for the organisations concerned.
Two examples (Cisco and Shell) were presented at HR Tech World in Paris last October. I am proud to once again be moderating the Smart Data breakout at the forthcoming HR Tech World in London on 21-22 March, and would urge all those interested or involved in people analytics to attend. Presenters from the likes of Adidas, ING, EY, Merck and Quintiles will be outlining the people analytics journeys at their respective companies.