For more than a century, organizations have relied on a variety of performance management measures aimed at boosting employee engagement and productivity — from surveys and reviews to OKRs and goal-setting. Employee appraisals have their roots in World War I, when the US military used “merit ratings” to assess performance, and employee surveys emerged a few years later, in the 1920s. OKRs, or objectives and key results, surfaced several decades later in the 1970s.
But despite years of corporate expectations that managers need to conduct performance reviews and workers must meet goals, companies often aren’t tracking the organization-wide effectiveness of these strategies. This means that they have few big-picture insights into whether long-standing programs to bolster employee engagement are actually working.
“Most companies, in my experience, are leaning more on the side of setting it and forgetting it, unfortunately,” said Tajan B. Renderos, a leadership development coach and consultant specializing in People management, of these types of initiatives.
The Great Resignation and today’s high demand for workers, however, are prompting employers to take a closer look at their engagement strategies, said Jessica Donahue, founder of HR consulting firm Adjunct Leadership Consulting. This includes investing in HR tech solutions that allow organizations to measure and monitor the successes and shortcomings of their engagement initiatives and People programs.
“With the pandemic and all the turnover that’s [been] happening, companies [are being] forced to reckon with the fact that [they] can no longer afford to have HR teams be an afterthought if [they] want to continue to drive profitability,” Donahue said.
Here’s why People analytics are so valuable, and how the right data can transform HR teams from playing a supporting role to becoming a strategic partner to executive leadership in managing one of a company’s most important assets — its people.
The Power of People Analytics
People management strategies can drive employee engagement and performance, addressing the unique needs of each employee. Surveys give individual workers a chance to share their concerns, performance reviews set benchmarks so employees can see how they’ve grown so far and where they can improve, and weekly reports keep employees apprised on the progress of team projects so they can track the timing of their own responsibilities.
But insights into large-scale participation rates and progress reports can affect positive change across an entire organization by ensuring that People management programs are on track, regardless of team or department, and bolstering the adoption of different performance management tools company-wide.
Julie Thorne, People and Culture Manager at NorthOne, a financial services company, said data gives her a better understanding of the overall employee experience. “We want to make sure that our employees are being coached and [given] feedback, because how are they going to learn and do their best work or continuously grow with us if they’re not?” she said.
The right data can enable organizations to improve their People programs. It can help:
1. Hold managers accountable.
Managers matter. A 2021 survey from background-check platform GoodHire found that 82% of US workers would potentially quit their job because of a bad one. Having access to data on its People programs enables companies to compare and contrast how well teams and departments are doing, tie any trends to specific leaders or managers, and take action to address any shortcomings.
Sometimes managers just haven’t bought into a program or need some extra coaching to get on board, noted Donahue. “If it’s only one team that’s not participating [in an engagement survey] or one manager not doing [one-on-ones], it makes me wonder: Is the process viewed as not worthwhile? [Does the manager] not get the value in it? Or is it that we didn’t communicate the value well?” she said.
Organizations can even use People program metrics to hold managers accountable in their own performance reviews, requiring them to personally meet specific participation rates for engagement survey responses among their team members or the number of one-on-ones they conduct with direct reports, for example. “Tying those things together can be [incredibly] valuable,” Donahue said.
2. Uncover culture issues.
Sometimes data can reveal bigger-picture issues and uncover that not many managers and workers are complying with corporate expectations. That’s a signal, cautioned Donahue, that “you [have] a [bigger] culture issue.”
Not effectively communicating the value of weekly updates or one-on-ones could be one reason employees aren’t complying, said Donahue. Another reason: Employers have put extremely high expectations around performance management strategies, and they are viewed as too difficult to do, she said.
“A lot of people see one-on-ones as very labor intensive, without understanding why they’re doing them and how to do them well,” Donahue continued. Performance management software can provide the structure to get them done, and data analytics can quickly uncover waning interest, which should trigger questions about why, and what can be done to improve participation.
3. Reexamine People programs.
People programs may have been launched with the best of intentions, but perhaps the initial direction was unclear or the results are lackluster. Data analytics can shed light on whether initiatives are still effective.
“Many companies are not examining their initial goals and intentions for People program initiatives juxtaposed against the outcomes data they get about the program,” Renderos noted. “It’s critical to do this and, more importantly, make tough decisions accordingly.”
For example, if a consulting firm was hired to bolster engagement in surveys or weekly updates but hasn’t delivered, key metrics can reveal problems, signaling that it’s time to make a change, said Renderos. “Many companies will carry on with a suboptimal program because it’s hard to uproot a program that has already been integrated,” she said.
Data can provide the reason to let the consulting contract lapse so you can build a better, more effective People program.
4. Tout successes.
The right People performance data also allows organizations to recognize and celebrate business successes — like the department with the highest survey participation rate or the manager who is going above and beyond to send weekly updates to their team, for instance.
Companies should acknowledge high-performing managers and how their strong participation rates in one-on-ones, for example, correlate to high retention rates and employee engagement on their team, Donahue said.
From a business perspective, continued Donahue, there’s value when you have a team that’s bought in like that. “You can showcase that to other leaders who maybe aren’t as bought-in to say, ‘This could be you too if you just leaned into this process a little bit more,’” she recommended.
Finding the Right People Data
1. Adoption Metrics
Adoption metrics measure the percentage of people who are taking action on required tasks and can provide a top-level view into the health of a company’s People programs. This data might be available without a tech solution, but it’s often distributed across siloed spreadsheets that make it difficult to measure employee performance in real time, noted Donahue. And, as the saying goes, she said, “If you can’t measure it, you can’t improve it.”
With the right technology, though, organizations can track how actively employees report progress over a period of time, while also looking at month-over-month and year-over-year trends on any number of performance management tools to refine their People programs.
Employers send out engagement, pulse, and Employee Net Promoter Score (eNPS) surveys to gauge worker motivation and morale levels. Companies may already be tracking participation rates and scores, but HR tech platforms can make it easy to analyze the data on a more granular level. By using dynamic dashboards to compare things like participation or completion rates across departments and teams, organizations can reveal specific problem areas and enact targeted solutions to optimize the employee experience.
3. Weekly Updates
Written weekly updates from managers to their direct reports and other stakeholders are a valuable tool that can serve as a jumping off point for conversations about projects and tasks. This practice not only helps managers fine-tune their management skills – with the right HR tools, weekly updates can also help People teams track overall employee sentiment and reveal signs of waning engagement levels across the organization.
One-on-ones offer an impactful way for managers to regularly connect face-to-face with their direct reports to address roadblocks, build trust, discuss opportunities for development, and share real-time feedback to ensure projects stay on track. But, like any workplace initiative, one-on-ones can fall off over time as managers and employees get caught up in daily work and these check-ins wind up being rescheduled or canceled altogether. Data analytics can reveal who is holding one-on-ones at the recommended cadence, and who can improve.
5. OKRs, Goals, KPIs
While companies have long required workers to set goals and make progress on OKRs and key performance indicators (KPIs), businesses don’t always follow up to determine, across the organization, what percentage of employees are actually progressing and how many are at risk of falling behind.
No movement on goals or growth, of course, could indicate any number of issues, Burr pointed out. “It could be the goals aren’t aligned with the culture,” he said. Or, he suggested, perhaps the goals are too aspirational or unrealistic. People analytics tools can track progress sharing and participation rates to help Human Resources leaders determine which departments and teams might need help driving progress (or just an extra nudge to maintain transparency).
6. Growth Areas
During the Great Resignation, workers made it clear that they expect to have opportunities to grow and develop at work. According to the University of Phoenix’s 2022 Career Optimism Index, 68% of respondents said they would be more likely to stay at the same company throughout their career if it offered additional upskilling opportunities, and 65% said the same for re-skilling. Analytics tools like HR Dashboards log and track growth goals, which helps organizations and managers stay accountable for providing employees with opportunities to build on their skills and competencies.
People Success is More than Numbers
Of course, metrics won’t tell you everything about the success or failure of your People programs. Workers may not be filling out pulse surveys for any number of reasons — perhaps the survey link didn’t work, they were in the middle of a time-consuming project, or they just don’t see the point.
To understand why results are mixed or programs are flailing, you need to combine quantitative data with qualitative information gathered through conversations with teams, managers, and employees. Data analytics, Donahue said, “opens the door for you to ask those difficult questions to understand the real reasons why something is or isn’t happening.” But it’s just the beginning of the conversation, not the end.
Across organizations and industries, employee engagement and retention are now top priorities, triggered by historic levels of attrition, the widespread shift to remote work, and the desire of workers, especially younger ones, to want a sense of belonging and meaning from their work.
This all makes People program analytics a critical tool for HR teams as they seek the best ways to keep workers on the job, while simultaneously demonstrating to leadership that the work they do matters to the company and its bottom line. The return on investment in HR tech comes when Human Resources leaders use the data to optimize the company’s engagement strategies and, in turn, cultivate a happier workforce.
“When people feel supported, they will always go the extra mile,” Thorne said. “They will want to do their best work because they will feel personally committed to the success of the team.”
Ready to bring your People programs to life? Download Lattice’s eBook People Program Models for six strategies to help your employees do their best work.