This content is part of the Essential Guide: Making the shift to continuous performance management

Employee performance management software to loom in 2016

Analysts from Deloitte, Forrester and Nucleus Research predict performance management, social media and employee engagement will lead HCM software trends in the coming year.

Analysts are predicting that human capital management software in 2016 will be dominated by some major trends in...

performance management, recruiting, employee engagement and analytics.

In the coming year, more users will also shift core HCM functions to the cloud, and more will consider a unified suite that will include specialized processes, such as talent management, analysts said.

Social tools will also become more important in HCM, particularly for recruiting. Also, leaders in human resources will need to continue to use social sites, such as LinkedIn, Facebook and Twitter, to build a presence and improve brands, analysts said.

In separate interviews, Erica Volini, U.S. HR transformation leader at Deloitte Consulting; Paul Hamerman, vice president and a principal analyst at Forrester Research; and Brent Skinner, principal analyst with Nucleus Research, agreed that new types of employee performance management software will be a big trend in 2016.

"One process that is under a lot of pressure right now is employee performance management," Hamerman said. "What we see happening is more companies moving away from periodic performance reviews toward continuous performance management."

Accenture, Deloitte and General Electric are among the big companies that recently ended traditional employee performance management, which was historically done on paper, and generally involves annual or biannual setting of goals, scores on achievement and tying scores to compensation. Hamerman said the conventional methods are facing criticism because they look backward instead of forward.

Generally, new performance management systems will involve recurrent coaching by managers and more repeated measuring of progress on specific goals and business outcomes, he said.

Some users will consider new tools that provide for such continual discussions among managers and employees, and more frequent checks on progress, Hamerman said. The new software may be used in conjunction with traditional performance management, he added.

Software from BetterWorks, for example, provides viewing and progress on goals in real time, and can include a social option for workers to "cheer or nudge" co-workers toward their goals.

Hamerman also listed employee performance management software by vendors such as 7Geese, Zugata, Workboard and Shared Performance.

Predictive analytics, along with workforce analytics and planning, make up another significant trend for 2016, Hamerman said.

Anaplan, Workday and Visier are offering workforce planning software, which is aimed at allowing HR to be more strategic and maybe help grow the business, he said. Workforce planning can involve projecting labor needs and demand, analyzing costs to meet demand and understanding the availability of talent in certain markets -- all often in real time.

Core HR shifts to cloud

Hamerman said he expects a greater shift to the cloud for core HR functions, which basically include payroll, benefits, employee records and, sometimes, time and attendance. He said that only about 25% of core HR systems are now deployed in the cloud and that it will reach 50% during the next three years. By subscribing to core HR in the cloud, he said, users get the advantage of receiving regular updates from the vendor.

Hamerman said core HR in the cloud also provides a greater degree of employee engagement, an important catchphrase for 2016.

Deloitte's Volini said 2016 will be all about HR finding new ways for technology to engage employees, not just provide self-service for pay, benefits and other records.

"Engagement is the word for 2016," she said. "We're going to transition from a system of record to a system of engagement." Employees are engaged when they are passionate about their employer and are committed to helping the organization achieve its goals.

Increasingly, processes such as onboarding, recruiting, learning, employee performance management, succession planning and analytics will be partly judged by how well they engage employees, analysts said.

Onboarding, for instance, will increasingly begin with videos and materials from a prehire portal to get new workers excited and prepared to produce before they walk in the door, Volini said. ADP, for example, in October released new onboarding tools for big organizations that include video introductions and other features designed to boost employee engagement.

New or improved learning management systems from vendors, such as Oracle, SAP and Workday, for example, are viewed as critical partly because they are ways to build employee engagement and connect learning to performance management and career development. "There is a massive evolution in learning," she said.

Social to be prominent in 2016

Social media will be an ongoing theme in 2016, including in recruiting, Volini said.

"That is what recruiting technology is going to be about in the future," she said. "It is not going to be about applicant tracking. It is going to be about sourcing candidates, maintaining that candidate pool [and] leveraging your internal network to find new talent by tapping into their social networks like LinkedIn."

Social will also help build closer collaboration at work. More companies, for example, may start using the new Facebook At Work, a business version of Facebook, that allows workers to connect, share ideas and organize events.

Nucleus' Skinner cited tools such as Cornerstone Connect, which enhances project management and teamwork, and SAP Jam, an application designed to expand collaboration.

Skinner said user interfaces at work will continue to mature, as well as look and feel like social media feeds, such as Facebook. He said Ceridian, Oracle and Ultimate Software are good examples of vendors embedding social media into interfaces, improving performance management. "Performance management can happen in real time, because employees and managers are seeing what each other are doing in the system in real time."

Skinner said 2016 could also bring stepped-up moves by vendors to offer full suites of human capital management software. He said the end-to-end suites could increasingly include talent management, which covers employee performance management software, learning, succession planning and recruiting to go along with core HR.

Specialists in talent management, such as Cornerstone OnDemand, could see stiffer competition. Some specialists in talent management could weather the competition by offering stronger core HR management systems, he said.

"Employers will be hard pressed ... not to consider these broader-suite vendors for all of their HCM needs," said a research note from Nucleus.

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