Human Capital & Careers

Managing Your ”Greatest Asset”

Talent-management software can add consistency to compensation programs and light a fire under ''laggards'' in your workforce.
Lisa YoonMarch 22, 2006

“People are our greatest asset.” That truism is too warm and fuzzy for Paul Murray, chief financial officer of Proxicom, a developer and manager of Internet-based software. The consultants who make up the majority of Proxicom’s workforce are what Murray calls “billable resources” — and they’re not billing hours, he notes, if they’re “wasting time on administrative tasks.”

Take performance reviews, which hadn’t been conducted in the three years before Murray joined the Reston, Virginia-based company in 2004. The first efforts to resume them lacked any discernable system or organization — “tons of Word documents floating around” is how Murray remembers it.

Last October, Proxicom turned to a Web-based solution of its own: talent management technology from SuccessFactors. The San Mateo, California-based company is one of a growing number — others include Halogen Software, Authoria, Taleo, and Recruitmax — that are introducing sophisticated talent-management software that’s much more user-friendly than in years past. Indeed, technology consultancy Yankee Group expects the market for such products to grow by 20 percent this year alone.

The SuccessFactors product is based on a suite of seven modules. The performance-management module, for instance, automates reviews (no more Word documents) and offers a “writing assistant” to help managers and employees choose appropriate language. The goal-management module allows companies to choose goals at, say, the divisional level, then cascade them into goals for departments and individuals. Other modules deal with succession planning, compensation, 360 reviews, employee surveys, and reporting and analytics. The modules are interconnected; the compensation module, for instance, can help implement a pay-for-performance program.

For managers and executives, information is presented in dashboard form — an especially valuable feature for geographically diverse companies like Proxicom, which has 70 consultants in eight offices and another 100 or so consultants scattered across the country. Murray also observes that this approach can help light a fire beneath underperformers who might be coasting on the company’s overall success. “We had a great year in 2005, with 21 percent revenue growth,” he says, adding that he expects SuccessFactors to help Proxicom “do a better job of managing the laggards in 2006.”

And as for rank-and-file employees, the technology gets appropriate information about goals and performance “into the hands of the people who make the difference,” says Brian Reilly, chief financial officer of Allied Building Products Corp. “And those people are not the CFOs of the world, sitting in an office at headquarters.”

At the East Rutherford, New Jersey-based wholesale distributor of roofing and siding products, SuccessFactors has been especially helpful with compensation. “There was tremendous inconsistency in the way we paid people,” says Reilly. Employees hired from outside, he notes, were often paid differently than workers in the same role who had been promoted internally — a disparity that seemed more arbitrary than performance-based.

SuccessFactors’s compensation, goal, and performance modules helped Allied set pay levels based on results — still within a range for individuals holding the same position, but a narrower range that seemed much more reasonable. That’s led to happier workers and much less “churn,” says Reilly, who observes that employees do compare paychecks “even if they’re not supposed to.” Retention of new recruits has doubled in the year and a half that Allied Building has been using SuccessFactors, he adds.