Written by
John McVeigh

23 Nov 2015

Linking big data to performance management and reward how is it done?

23 Nov 2015 • by John McVeigh

To an alien, it could seem that these things are brand new concepts taking our world by storm. However that is not the case. For years, businesses, and in this context, human resources departments have been tasked with collecting, measuring and analysing data in order to track trends and anomalies relating to employee engagement, productivity and turnover; demonstrating the impact of each on the bottom-line.

The big buzz

So why is it now the subject of ‘big data’ seems to be front, right and centre of HR conversations? Parading itself as a new, game-changing approach; despite the idea behind big data first being described in the Oxford English Dictionary more than 70 years ago?

It comes down to a better understanding around the value technology can provide; combined with more reliable tools to help us analyse what’s happening in our businesses. Traditionally data analysis has been very vertical and inward looking; exploring only at the information we held within our departmental silos. However thanks to significant advancements in technology, we are now able to connect horizontally – with our employees, customers and suppliers – to access information which allows us to effectively link what we see, hear, feel to what the data is showing us. 

The ability to obtain really rich data about our people has meant we can now delve deeper than ever before; enabling leaders to take a far more strategic approach which can have a fundamental, and transformational, impact upon their organisation.

In short, we’ve been able to make our people processes not just an art, but also a science.

Human touch is dead: long live data?

When it comes to performance management, reward and recognition; data isn’t, and mustn’t be, the be all and end all. We can’t look at a spreadsheet and take action based solely on the information in front of us. These elements will always require the human touch – honest and transparent conversations between managers and employees.

Instead, data must be used in a way which allows us to evolve our approaches and improve our conversations. As Steve Rockey, Head of People for restaurant brand, Big Easy, quite simply put it in his LinkedIn blog post: “You can’t let the cart drive the horse.”

His argument was clear – while data and analysis satisfies CEOs and Finance Directors; it shouldn’t be used at the expense of really understanding what’s happening to start with. Data is to performance management and reward what sound is to images in a film. They go hand in hand.

This is why, despite many larger companies removing the performance review, we can’t just get rid of them. What we can do, however, is change the way we approach performance management, using data as a back-up, rather than the driving force.

In his Inc.com article, Dan Enthoven chief marketing officer for data intelligence provider, Enkata, says “As technology matures, [performance] reviews will evolve from drive-by evaluations and periodic check-ups to data-driven conversations about what’s really happening, and what specific changes will make people more effective. When this happens, performance gaps will narrow as more people improve their skills and perform at their potential.”

And in turn, productivity increases.

The same goes for reward. Access to real-time, reliable data enables us as leaders to not only identify great performance which warrants recognition; but allows us to watch and track the impact of that recognition and possible reward, on individuals’ ongoing performance. 

We can then measure the effect on areas such as loyalty, retention and engagement.

More than numbers

It’s vital to remember that people are more than mere numbers. They are complicated and emotional, and so data shouldn’t be used as a prescriptive strategy; creating a host of cloned managers and employees. A computer should never set the rules for people to adhere to. Instead it should enable us to think smarter, see our people as unique human beings and help us to tailor our approaches for different personalities.

As such businesses must find the perfect balance between data and real understanding. Moving away from the rigidity of big data and becoming more fluent in our understandings of what’s happening around us. 

Data is impersonal. In many ways it is the polar opposite of genuine recognition; which is personal, human and emotional.