Ultimate

Guide
to

PERFORMANCE

Annual Reviews Are So Last Year

Aligning employee performance with the organizations goals is a common aspiration. To that end, organizations apply a range
of techniques to assess employees contributions and establish plans to develop talent. For most companies, the traditional
annual performance review is still the central event for assessment and setting development goals. Its an age-old tradition,
but its time may be up. Many organizations find diminishing value in this once-a-year approach. Why?

Organizations need agility

to quickly apply their
talent where needed to
stay competitive and seize
opportunities

>

Emerging talent,
especially Millennials, want
to work in collaborative
environments where
transparency and ongoing
performance feedback
are the norm

>

Managers need timely

information to improve
business results

To meet these requirements, companies today are re-thinking performance

management. Theyre approaching it as a strategic business process in which
employees are regularly evaluated, coached, and motivated to excel.
This guide will put you on the path toward highly effective performance
management with information on:
Essential

components of performance management

How

to measure ROI and lead the business value discussion

Tips

to improve existing programs

Ways

companies have transformed their performance management

and achieved real business value

Top 5 Essentials of
Performance Management
Successful performance management includes these essentials:

1.

A well-rounded plan tied to business goals

2.

Knowing your starting point

3.

Connect performance and learning

4.

Effective technology

5.

Actionable Data

Ultimate Guide to Performance

>

Employees want timely

feedback and coaching to
enable career growth

FAST FACT:
Employees and managers
today want real-time,
feedback-based solutions,
coaching, development, and
more agile approaches to
goal management.

Essential #1: A Well-Rounded Plan

Tied to Business Goals
Each organization has its own approach and requirements for
strategic planning. But regardless of the planning template,
your plan will be most effective if it addresses these five
dimensions of successful performance management:
Identifying

talent/skill gaps and improvement

opportunities all targeting business goals

Creating

a performance culture

Motivating

employees

Improving

collaboration and socializing employee

development throughout the company

Identifying

who your next leaders will be and preparing

for executive succession planning

Essential #2: Know

Your Starting Point
A highly effective performance management program zeros
in on identifying and growing critical skills. To pinpoint whats
needed, a talent audit is a great place to start. By using the
4-step process outlined below, you can bring visibility to
talent strengths and risks:
1.

Set objectives based on business needs and current

bench strength (tip: no more than 3)

2.

Formally assess your organizations talent and create a

gap analysis

3.

Hold talent review meetings with each business group

discuss strengths, needs, and career paths (tip: use a
checklist)

4.

Take action with specific plans, frequent communication,

and follow-up

To learn more about the full audit process, check out

SilkRoads ebook: 4 Steps to Strengthen Your Talent Pipeline
available at SilkRoad.com.

SilkRoad.com

Essential #3: Connect

Performance and Learning
Managers often face an age-old challenge the disconnect between performance
appraisal and the learning process. The appraisal reveals the employees abilities or
skills deficit. Training is requested and completed, but performance doesnt really
change or is never calibrated to the new skill level achieved.
How can HR bridge this disconnect and improve employee performance? Try
these techniques that talent-driven companies like Google use to make employee
development more effective:
Separate the Conversations even a positive appraisal can get emotional and
distract the development conversation. Uncoupling the appraisal and development
discussions can make them equally meaningful.
Segment Employees seasoned, steady employees dont need the same
development approach as rapidly rising stars. By segmenting employees into
groups, you can use the appropriate development approach for each.
Introduce a Learning Toolkit managers often dont know all the learning
techniques available to make formal training more effective. Educating (and
reminding) managers about the toolkit of available training options can make
their jobs easier, and help them become more effective leaders.

Essential #4: Effective Technology

We used to do these rankings manually or with
spreadsheets and data points pulled from disparate
systems. Now technology makes it possible to simplify
this process with one source of information. New research
shows that this information should be shared with people
and that individuals should get direct feedback more often
on their performance.

A new breed of performance management technology

includes features that facilitate the regular process
of performance analysis, assessment, coaching, and
communications to generate bottom-line business results
for the company and give employees the career growth
and development they crave.

Essential #5: Actionable Data

The topic of HR metrics, especially around performance
information, can raise a good deal of well-founded angst.
Gathering metrics across the organization challenges even
the best HR teams. To provide metrics that matter
actionable data that leads to better results the right
technology goes a long way. Standardized reports and the
ability to link data to other systems can help. But before you

Ultimate Guide to Performance

start, think about what questions you and your executive

teams want answered around performance questions.
Uncover
Set

the real business questions being asked

realistic expectations

Demonstrate

the need for effective tools to measure ROI

Measurable ROI
Effective performance management provides business value in several ways cost savings, bottom line results,
plus a range of intangible benefits.

Calculate the Cost Savings:

You can easily demonstrate the potential cost savings available from an employee performance management (EPM)
automation solution:

Hours saved
per employee

Average
employee cost
per hour

Amount saved
with an EPM

Example: An organization has 1,000 employees and saves a total 2 hours per employee. If the average labor cost is
$20/hour, the company is saving $40,000 per year with the EPM.

Better Development,
Better Bottom Line
Research from Bersin by Delloitte
shows that, of all the practices to
consider in performance management,
development planning is among the
most important. They found that
integrating learning & development
with performance management makes
an organization:
3x

more likely to report good

employee results

55x

more likely to report strong

overall talent management results

100x

more likely to report strong

business results

ROI from Intangibles

Aside from the financial and productivity
results that can be expected from
performance management technology,
its important to also consider some less
tangible benefits they provide, such as:
Access

to key information

Increased

legal compliance

360-degree

feedback across the

organization

Review

cycles can be aligned

however your organization sees fit

Visibility

to performance and goals

increases accountability across the
board

Motivation

and engagement will be

positively affected

Business

strategy and goals are

aligned with individual goals and
performance

You

can realize a true pay-forperformance culture

Succession

planning is easier and

more efficient

Collaboration

and socialization
across employees and managers
is increased

Incorporating

training plans to
help employees reach goals will
increase retention

For tips on getting the business value/

ROI discussion started with company
leaders, see Appendix I.

Career

paths are clear to individuals

and the business

SilkRoad.com

Improving Performance Management

Dont Think Outside the Box Make the Box Better
Generally people find it very difficult to adopt a radical new point of view. If you
want to take your organizations performance management to the next level, you
may get more support and cooperation if you focus first on incremental changes
using technology or other techniques to improve the current process, rather than
throwing everything out and starting over.

FAST FACTS:

3 Keys for a High Performance Culture for Employees

Research shows that companies with the highest employee engagement scores
deliver operating margins 170% above organizations with low engagement
rankings. If you want to boost engagement, recent SilkRoad research can show
you where to focus your efforts. The research shows that 3 key issues impact
engagement and motivation of top performing employees.
What Employees Really Want trust in management (56%) ranked
highest for fostering engagement
Generational Differences few organizations (10%) differentiate
engagement by generations, which is key to attracting new talent, especially
Millennials
Roadblocks and Buy-In nearly half (46%) of organizations lack explicit
programs for employee engagement and struggle with executive buy-in for
formal programs
SilkRoads ebook: Creating a High-Performance Work Environment offers
a deeper look at this important issue with benchmarks, practical ideas, and
more download from SilkRoad.com.

Ultimate Guide to Performance

56%
10%

46%

ranked trust in
management highest for
fostering engagement
of organizations differentiate
engagement by generations,
which is key to attracting new
talent, especially Millennials
of organizations lack explicit
programs for employee
engagement and struggle
with executive buy-in for
formal programs

Managers Checklist for Linking Motivation to Performance

MYou improve performance by working with what motivates your employees to do their best and

eliminating obstacles that keep your employees from experiencing higher levels of job satisfaction.
MBe specific with your employees about whats meant by performance. They need to know whats

expected of them, whats considered unacceptable, and what it might take for them to reach the
standards of performance that you and your employees set together.
MYour expectations affect the behavior of your employees. If you expect better performance and trust

employees to deliver, youre likely to get it.

MCreate an environment that encourages and supports higher levels of performance. Be specific in setting

your objectives, try to stimulate and challenge your employees, provide the resources they need, and
show how much you appreciate and respect them.
MCheck out SimpleTruths.com for affordable books and videos that build teams and motivate employees

to greater success and fulfillment.

MShare the rewards of success but remember that the best motivation is intrinsic.
MEmployees who find satisfaction in doing their jobs will usually try to perform better.

SilkRoad.com

Case Studies
These organizations took performance management to the next level
and improved business results:

Kearney & Company

Virginia-based Kearney & Company is ranked Best Place to Work by
multiple business publications. Maintaining that competitive hiring edge
while growing from 100 to more than 450 employees hasnt been easy.
One challenge: Establishing a consistent and organized performance
management process. With SilkRoad Performance, the company gained:
A

more consistent and meaningful performance review process six

month, yearly, and post-engagement performance reviews

Better

goal tracking employees can easily monitor their own progress

Stronger

employee engagement with mobile features that improve

performance management connections between supervisors and the
many employees who work off-site at client locations

and

much more

SilkRoad Performance supports Kearney & Companys culture of excellence,

fostering professionalism in the workforce and exceeding the expectations
of managers and employees alike.

Ultimate Guide to Performance

We are a professional
services firm in a competitive
market, and we must
hire the very best talent.
Our consistent, equitable
appraisal process through
SilkRoad Performance gives
candidates confidence
that Kearney is the right
choice for them.
Erin Ogburn, Director of Human Resources

San Diego County Regional Airport Authority

To help meet the goal of a productive and motivated workforce, the San
Diego County Regional Airport Authority sought an automated performance
management solution that would:
Decrease

managerial time spent preparing performance reviews, allowing

more time for planning and coaching

Supply

real-time employee performance data for analysis

Increase

the number of on-time performance reviews

The Airport Authority achieved those goals and more with SilkRoad Performance:
Cost

reduction over $34,000 saved

SilkRoad Performance
has reduced our
managerial cycle time for
appraisals by 50 percent.

Time

savings managers spend 50% less time

on appraisals

Analytics

real-time data now available to measure employee performance

On-time

performance reviews increased from

80% to 98%

SilkRoad Performance helped the Airport Authority re-engineer its performance

management workflow process to shorten appraisal cycle times, cut costs, and
improve productivity.
SilkRoad.com

Get the Most from Talent

To remain competitive, an organization today must get the best possible performance
from talent. Annual performance reviews are no longer the answer. Smart organizations
view ongoing performance management as an essential for driving business success.
By providing leadership to institute effective performance management, you can help
your organization:

10

Improve agility and competitiveness

Strengthen employee development, productivity, and retention

Improve succession planning

and more

Ultimate Guide to Performance

APPENDIX
Cost per Hire National Averages
HR can demonstrate its business-results focus by taking the lead in
a performance management ROI discussion. Here are three areas
where you can start that ROI discussion.
1) 
Time savings and focus This is the easiest place to start.
If the organization has adopted performance management
technology, value can be calculated based on time saved. But
theres another facet to the time-saved discussion, and its
important. Point out how managers and employees saved time
can be shifted to specific key projects that provide competitive
differentiation or other strategic benefits.
2) Turnover It can cost twice an employees salary for a
replacement. Using your organizations turnover data, you
can show how even small turnover reductions can deliver
measurable savings.
3) 
Productivity While the focus often is on improving worker
productivity, performance management also provides
techniques and tools to make managers more productive
driving better business results through improved
communications, coaching, and data analytics.
Learn more about the ROI of an Employee Performance
Management Solution [NOTE: link to Calculating the ROI of an Employee
Performance Management Solution]

Performance Management Software Suite

Features Checklist
Every Performance Management software demo will be a little
different. Regardless of the path the salesperson or solution expert
takes, make sure the system you select makes you feel confident
about these critical areas of a performance management solution:

Appraisals
M Provides complete support for managing the performance
process, including appraisals, 360 degree feedback,
compensation, goal management, competencies and
development planning.
M The system is proactive, giving administrators the ability
to automate the launch of the appraisal process and notify
employees based on trigger dates we set.
M Employees can see their historical performance information at
review time (previous appraisal results, development activities,
journal entries, etc.)
M Its easy to create multiple different appraisal forms
in the system.

Assessments
M The system supports the use of 360 degree, multi-rater,
self/manager and peer assessments. An unlimited number
of assessments can be created.
M A robust library of competencies is available, in addition to the
ability to import our own competencies.

Other Functionality
M The solution supports individual development planning,
which can be self-created or auto-created at the end of the
assessment period.
M Succession planning functionality is available including talent
search support (advanced search and 9-box), reporting and
holistic views of all potential candidates.
M Compensation allocation such as merit increases, bonus, and
equity pools, is supported.

Administration
M The system can allow the addition of custom attributes and
report on them.
M Easy to use from both the administrative and employee
perspective, and we feel confident we can manage the system
on our own.
M Robust functionality exists for what we need now, but theres
still plenty of room for growth with this vendor.
M Powerful reporting is available through standard reports,
including the ability to export reports to Excel or PDF.

Technology
M The vendor answered all questions with regard to the Softwareas-a-Service [SaaS] cloud-based software model and described
the benefits to my organization.
M I feel confident that this vendor will keep me ahead of my
competitors by keeping its eye on talent management trends
related to a mobile and social workforce, and by providing a
solution that reduces costs, saves time and resources, and
develops a more engaged workforce.
M All performance management functionality (appraisals,
assessments, compensation, succession planning, goal
management, etc.) is offered in one solution, without modules
and regardless of the size of our company.

Its easy to create different appraisal workflow processes for

different groups.

Goals
M The solution allows employees to add goals or accept goals set
by their manager. Goals can be easily modified when necessary.
The system also allows for goals to be weighed.
M Department level goals can be cascaded to selected team
members.
M The system enforces the creation and management of
S.M.A.R.T. goals.

SilkRoad.com

11

Clear Rewards, High Stakes

The rewards of effective recruiting are clear.
It brings top talent into your organization to
drive business success.
At the same time, the stakes are high.
Current data shows that companies can
spend $4,000 on average to recruit a new
hire (see Appendix I). If an employee jumps
ship, the turnover and total replacement
costs have been estimated to run as high
as 150 times annual salary for specialized
senior level positions.
As the economy improves, competition
for the best candidates will continue to
increase. But with the right recruiting
strategies and tools, you can:

Attract more top-choice

candidates
When competing for quality candidates,
an attractive career opportunity is only
part of the picture. A cohesive, efficient
recruiting process helps create a positive
first impression to engage top talent and
differentiate the organization.

Improve fit
These days, find qualified candidates may
be easy, but finding people who truly fit
can be a lot tougher. With the right mix of
strategy, tools, and processes, youll more
consistently acquire best-fit talent.

Reduce time-to-hire
Each step in the recruiting process takes
time. Data from your organizations
applicant tracking system (ATS) can help
you identify process bottlenecks and
reduce the time-to-hire.

Work more effectively as

an HR team
Effective sharing of information and
communications within the HR team
and with hiring managers can result in
better candidate/job matching, process
streamlining, and reporting that clarifies
the HRs contributions to business success.
Automation can have a big impact in all
these areas.

MEAN REPLACEMENT COSTS (PER RECRUIT)

Blue Collar

Professional

All Workers

SilkRoad is a leading global provider of cloud-based, end-to-end talent management solutions that enable customers to find, attract, develop, and retain the best talent. The
award-winning SilkRoad Life Suite includes Talent Acquisition, Talent Development, and HRMS solutions that are delivered through a tablet-friendly Talent Portal. The suite is
0 platform to rapidly2000
4000and business performance.
6000
8000
easy to deploy and use a single
boost employee engagement
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