Have you ever heard of People Analytics? It’s the practice of applying advanced analytics and large amounts of data to human resource management – independently of the company’s size. Just five years ago, only a few leading firms (such as Google) adopted the methodology. Today, it is increasingly prevalent in the corporate world. That’s because People Analytics is proving to be an extremely effective way of managing a company’s talent management operations – conducting performance assessments, for example. And it is about just that, the process of using data to evaluate the performance of your employees, that we will talk about now.
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What is People Analytics?
It is the process of collecting, organizing and analyzing data on employee behavior (that can be used in in performance assessments). The intent is to contribute to decision-making in a company – anticipating trends and improving strategies.
In other words, People Analytics is nothing more than the recognition that employees are a company’s most valuable asset. Therefore, it is necessary to develop metrics to understand what makes them engaged, productive and happy in the workplace. To learn more about it, be sure to read this article on how People Analytics can transform the work environment.
The emblematic case of a restaurant chain
So you can understand data’s potential for performance evaluation, we will bring you an innovative case study – particularly considering the comprehensive way in which the tool was used. After all, according to this article by the management consulting firm McKinsey, up to now, People Analytics has mostly been used with a focus on skilled talent and individual HR processes (which is justified by the nature of companies who pioneered its use).
Changing this paradigm, the company in question (whose name was kept confidential) analyzed data from employees at the front line of customer service. The objective was to improve the performance of the business on a macro level, while also focusing on improving the performance of services and, of course, increasing customer satisfaction. The objective was duly fulfilled, leading to a 5% increase in sales.
Knowing how they obtained these results is critical to understanding People Analytics’ potential in the execution of in performance assessments.
The challenge: decrease turnover
Before adopting People Analytics, the company’s managers had tried all the traditional strategies to improve customer satisfaction. But they faced an enormous challenge: a high rate of annual turnover. The chain faced problems with having to replace employees on a constant basis, as they operated their business through franchises and directly managed units.
Executives believed that lowering this rate would be a critical factor in enhancing the customer experience – and thus increasing revenue. Here is the step-by-step of how they implemented this process:
1 – Define what matters in performance assessments
Establishing expected results in advance is an indispensable step in People Analytics. In the case of that restaurant chain, a rigorous exploration of the data and an in-depth discussion among executives was needed to establish three primary metrics: revenue per unit, average customer satisfaction and average service agility (the latter two measured by shift).
The exercise led to the recognition of some favorable performance assesstments metrics, and others seen as detrimental to the company’s goals.
2 – Fill in the gaps in data
As they collected data on their workforce, managers found some gaps which we listed below, along with initiatives taken to fill them:
Selection and onboarding: there was little information on the employees’ personality traits. Some leaders felt – correctly – that understanding these characteristics would help explain different behaviors and performances, influencing customer service. Thus, with the help of a specialist in psychometrics, the company created a series of online games, which allowed them to draw a detailed picture of the personalities and cognitive skills of their employees.
Second, there were gaps in information regarding day-to-day management. Measuring the quality of management is never simple, and the company was not accustomed to conducting research. So, to fill in this gap, the company used a tool called the Organizational Health Index (OHI). Created by McKinsey, the solution features 37 management practices that can improve the organizational health and performance of a business.
The third gap was related to employee behavior and interactions. To solve that gap, the company installed sensors to monitor the intensity of the physical interactions between colleagues. These sensors capture employee movement through the restaurants, the tone of the conversations, and how much time they spend talking versus the time they spend listening to colleagues and customers.
3 – Take the personal characteristics of each employee into account
In retail or any other segment, some personality traits can have a more significant impact on desired results. Through People Analytics, the restaurant chain was able to identify four “archetypes” among its frontline employees:
One group, considered potential leaders, had several characteristics in common with store managers;
Another group, “socializers,” was friendly and had high emotional intelligence;
And the third and fourth groups were “executors” who, to a lesser or greater extent, focused on performing tasks.
But my company is much smaller than a restaurant chain!
That’s no problem at all. More than just a system, People Analytics is a talent management philosophy and can be used by organizations of any size – whether it’s a restaurant chain or a startup.
The goal is to use data to improve your ability to evaluate your team’s performance, to make your decision-making process more efficient. A management tool like Runrun.it can be of immense help in this process.
Use Runrun.it to gather data regarding every activity performed in your company and provide performance reports so that you can evaluate the productivity of each employee. Sign up for a free trial of this innovative work management tool at: http://runrun.it