There’s software for just about everything. Companies today use an average of 37 different tools. Between applicant tracking systems, survey platforms, and other software, your HR team might account for some of that statistic.
Understandably, teams want to consolidate. Some are turning to their HR information system (HRIS) for more than just core HR, payroll, and benefits. But while certain functions lend themselves to being bundled this way, others don’t — performance management being one of them.
Two Sides of HR
Like developers, today’s HR departments care about the front and back-end experience. While engagement and people strategy have become focus areas, managing employee data, running payroll, and compliance reporting remain part of HR’s job description.
The latter is what your HRIS excels at. It makes sense to combine HR, payroll, and benefits administration. When employees enroll in health insurance, their elections need to feed into payroll accurately. Home addresses, legal names, and other employee information need to stay in sync. Your HRIS serves as the engine behind all of this — it’s your source of truth for all things back-end HR.
And performance management, employee engagement, and analytics? Those fall under front-end HR. It takes a different kind of tool to tackle those challenges.
Sara Nascimento leads people operations at Area 1 Security, a California-based computer security firm. She learned firsthand about the risk of stretching an HRIS past its comfort zone. The company’s first performance tool was part of an “all-in-one” HRIS the team selected because it had “performance management built-in, as well as other payroll features that we were looking for at the time,” she said.
When she tried to set up performance reviews in the HRIS, it became clear what the vendor was and wasn’t good at.
“My trigger moment was the administration,” said Nascimento. “I was very frustrated with the tool itself. It was hard to understand. I had to test it with one of my employees and work with them to see what was happening when I made changes to the review. It would go live before you could preview the flow yourself,” she said.
What’s more, Nascimento ran into issues with support. While the vendor was great at answering payroll questions, it didn’t have on-staff expertise to answer questions about its own performance module. And giving prescriptive guidance about reviews or engagement surveys? That was out of the question.
It was enough for Nascimento. “It got us through that first year, but there’s no way that I would go through with using the tool again,” she said. She switched to a separate solution shortly after.
Separating Compensation and Performance
Traditional annual reviews are often associated with raises or bonuses. So when it comes time to have those important conversations, it can be hard to keep employees focused on their development and career growth, not dollar signs.
HR professionals have taken pains to separate the two — though that can be challenging when you’re running payroll and annual reviews within the same system. That’s where the nuance and flexibility of a dedicated performance solution can help steer the conversation.
“Implementing a next-generation performance management system is a great way to decouple performance from compensation,” said Phil Strazzulla, head of an HR consulting firm. He believes that the key to keeping performance conversations focused is to move past one-off annual reviews. That means opting for ongoing or even real-time feedback — two approaches that HRIS vendors struggle with but specialized solutions excel at.
“Instead of annual reviews being at the same time as bonuses or raises, conversations are encouraged throughout the year,” he said. That sentiment seems to be growing in popularity, as data from the Society for Human Resources Management suggests a record number of employers are moving towards less traditional approaches to performance.
As the saying goes, you can’t eat soup with a knife. While HRIS vendors knock HR, payroll, and benefits administration out of the park, it takes a different breed of software to manage employee performance and engagement. That’s where we come in.
Lattice is a people management platform used by 1,500+ organizations to drive performance and engagement. What’s more, we integrate with your favorite HRIS so your people data stays in sync. To see our software in action, sign up for a demo today.