Employee Productivity Curve

Transcription

1 Shifting the Employee Productivity Curve to Increase Engagement and Mission Impact

2 Contents The impact of employee productivity on mission and funding... 3 What is the employee productivity curve?... 4 Five talent management practices designed to shift the productivity curve... 5 Find better hires, faster...6 Facilitate more effective onboarding, sooner...7 Drive engagement with ongoing development, frequent feedback, and aligned goals...8 Identify, challenge, and develop high performers...9 Identify and manage the disengaged Success stories Organizations that have shifted the productivity curve through talent management Recruiting: Project HOPE Onboarding: KIPP: Houston Public Schools Ongoing Development: American Bankers Association Leadership Development: Teach For America Talent Visibility: Save the Children Shifting the Productivity Curve Toward a Future of Success... 14

3 The impact of employee productivity on mission and funding Fulfilling your mission and achieving financial stability in today s economic climate is increasingly difficult. Nonprofit organizations must navigate multiple challenges, including increased need for services, more competition for donor funding, and more government regulations. Yet amid these challenges, nonprofit organizations can still thrive - by improving employee and volunteer productivity. Improving productivity means nonprofits can do more in the community or across the globe while using less effort and fewer resources. In practical terms, this means development teams can connect more efficiently with donors, field workers can work more effectively with more constituents, and leaders can focus on what they do best solving big picture problems instead of being mired in day-today operations. The common denominator in these scenarios? The human factor. Productivity is heavily reliant on the sustained, targeted efforts of employees - positive and consistent actions taken by hundreds, or hundreds of thousands, of workers. Increasing the productivity of each employee can radically transform a nonprofit organization s income, donor share, and longevity in any community. Yet while it s often assumed that employee productivity can be improved simply by focusing on performance, driving sustainable productivity actually starts before an employee s first day on the job. Successful nonprofits know the secret to consistent productivity lies in shifting the employee productivity curve, not at the middle of the employee lifecycle, but at the very beginning of - and throughout - the entire lifecycle. 3

4 What is the employee productivity curve? Get employers back on an upward track sooner by identifying and developing hi-po s for the next role First day Recruit Shift up by hiring better people, faster Train Shift up with a smart onboarding program Produce Shift up by providing training, clear goals, feedback, etc. Advance Identify disengaged employees and help them out the door sooner The employee productivity curve, as illustrated in Figure 1, charts the effectiveness of employees over time. It s a given that employees become more productive as they progress through learning their job and increase their comfort level with responsibilities. The productivity curve typically plateaus after all competencies are learned, unless the employee decides to train and perform a new role or take on additional responsibilities. Nonprofits that commit to moving the productivity curve leftward at each phase - implementing productivity measures earlier in and more consistently throughout the employee lifecycle - can see dramatic increases in productivity during an employee s tenure. What practical measures can nonprofits take to shift the curve? Employing smart talent management practices that help each employee - from new hires to seasoned performers - learn, perform, and engage at higher levels. These talent management practices include the ability to hire better, more committed people, faster onboard new hires sooner increase engagement with development, feedback, and goal setting identify, develop, and manage high performers identify and manage poor performers earlier Read on to discover how a continued commitment to managing your employees with Cornerstone s suite of tools can help you shift the productivity curve even further to the left, which will result in a more engaged staff and faster mission fulfillment. 4

5 Five talent management practices designed to shift the productivity curve

6 Find better hires, faster The wrong hire can be devastating: 69% of those surveyed by CareerBuilder said that bad hires not only affected morale and brought about legal issues, but also reduced productivity. 1 The ability to quickly hire the right people also mitigates the loss of productivity associated with vacancies. While corporate entities can lose up to $5,000 per day, as revenue collection, production, or sales come to a halt, nonprofits lose more than just money. For a nonprofit organization, lowered productivity doesn t just result in financial difficulties but fewer services delivered to those in need. How can nonprofit organizations use strategic recruiting - shortening time to hire while sourcing better candidates - to improve productivity? Enable employee referrals. High potential, high performing employees know others just like them - quality employees who are a good fit for your existing workplace culture. Research shows that referral hires outperform hires from other sources by 3% to 15%. 2 In another study, 88% of employers surveyed thought employee referrals generated a higher quality of new hires than other sources. 3 For nonprofit and social change organizations, these numbers could even be higher, as referrals share not just the same skills and drive but the same passion for the mission. Nonprofits also have the advantage of sourcing from board member and volunteer recommendations, those who are familiar with the nonprofit s cause and can easily identify those in their social networks who would be a good fit. The key to making referrals work? Using a well-designed referral process that makes it easy for all stakeholders to connect their personal network to recruiters and hiring managers. Give recruiters better tools. With the right tools, recruiters can spend less time finding candidates and more time making the right match. Configurable career sites that target and attract qualified hires, easy-to-use tracking systems, and ways to gather feedback from other employees about candidate performance, shorten the time-to-hire and ensure smarter evaluations of candidates. These tools also help increase the size of the candidate pool, thereby improving the likelihood of finding those who align with both the nonprofit s skill needs and mission. Support hiring managers with 360 degree feedback capability. Recruiting and hiring is a collaborative process; ensure hiring managers have access to feedback about candidates from other stakeholders. Give executives, managers, and employees even board members and volunteers an organized, easy way to rate and review candidates, from interview performance to observed skills and behavioral assessments. Find better matched candidates by hiring based on competencies. New hires must not only be the right cultural and mission match; they must also be a skills match. The Aberdeen Group discovered that 91% of Best-in-Class organizations use assessments in recruiting; 4 building a competency framework is key to ensuring this evaluation process is transparent and successful. Using competencies to determine suitability ensures new hires have the skills necessary to be successful in their job. Allow recruiters and managers to establish competencies specific to each position - based on existing top performers - and then evaluate those competencies in candidates. 6

7 Facilitate more effective onboarding, sooner Onboarding has a tremendous impact on new hire success: according to the Aberdeen Group, organizations that facilitate an onboarding process see significant changes in new hire behavior, including 54% greater productivity. 5 In SHRM s Onboarding Employees: Maximizing Success, more than half of surveyed organizations connected effective onboarding with reduced time to productivity (60%). 6 For nonprofits, less ramp-up time translates to the ability to provide better continuity of services, crucial for projects that cater to in-need populations or time-sensitive missions, such as disaster recovery. How can nonprofit organizations use smart onboarding strategies to decrease ramp time? Streamline orientation and form completion. Automating part of the onboarding process allows new hires to complete time-consuming orientation tasks before their first day. When rote tasks are finished earlier, new employees can spend their first day on the job connecting with their team and making a meaningful contribution to productivity - instead of filling out paperwork. Create community before day one. Start onboarding earlier by providing access to a social collaboration site where new hires can engage and connect with colleagues. A collaboration tool also gives new hires access to key information about the organization and the resources and connections they need to be successful. Start goal setting early. Help new hires set clear goals from day one. Align employee goals with both departmental and organizational goals so that employees know from the start what they are supposed to work on, how it fits into the nonprofit s mission, and that what they do directly impacts the organization s ability to affect change. Minimize the impact of the learning curve. The learning curve is costly; the Mellon Financial Corporation discovered that organizations can expect to lose between 1% and 2.5% of total revenues due to lost productivity related to getting new hires up to speed and trained. 7 For nonprofits, these figures can be even more devastating, as a slow learning curve results not in a shortfall of revenue but a loss in the capability to deliver services. Providing development opportunities early, ideally on-demand and accessible on the new hire s schedule, not only decreases ramp time but also improves new hire engagement and confidence. 7

8 Drive engagement with ongoing development, frequent feedback, and aligned goals How can nonprofit organizations keep the productivity curve shifting higher once new hires are on the job? By nurturing engagement. According to Gallup s employee engagement assessment, organizations in the top-quartile of employee engagement scores had 21% higher productivity than those in the bottom quartile. 8 While nonprofit engagement scores are usually higher than the median employees bring internal passion and motivation to their jobs the risk of burnout is also higher. Overworked, stressed nonprofit employees even those who care deeply about the organization s mission are at tremendous risk for disengagement and an associated loss in productivity. How can nonprofit organizations drive engagement-based productivity? Offer ongoing learning opportunities. Organizations that provide regular training see higher productivity; in a study by the National Center on the Educational Quality of the Workforce (EQW), a mere 10% increase in workforce training resulted in an 8.6% gain in productivity. 9 Research by the American Society for Training and Development (ASTD) shows that organizations considered leading edge also spend twice as much per employee on training as average organizations. 10 In the nonprofit arena, learning and development opportunities address productivity by helping compassion-fatigued employees learn new people or time management skills, stimulating excitement over new opportunities, and, if learning is provided in a collaborative format, allowing stressed colleagues to support and learn from each other. Provide ongoing, actionable feedback. The annual performance review is dead - or should be. Instead, ongoing feedback allows nonprofits to address key performance issues at the time they occur while simultaneously improving performance and productivity through learning assignments. More frequent feedback also correlates with higher engagement; 43% of highly engaged employees received feedback at least once a week, compared to only 18% of employees with low engagement. 11 In a social change organization where achieving organization-wide goals may be an uphill battle ongoing feedback is critical to keeping workers motivated, focused on the mission, and reminded that their contribution matters. Feedback is also more useful and motivating if it is specific and related to the employee s current strengths and how to maximamize them. In a study of 530 work units, Gallup found that employees who received strengthsbased feedback were 12.5% more productive than employees who received no feedback. 12 Assign goals that are aligned with both employee career plans and organizational objectives. Unclear performance expectations, according to a survey by Robert Half, are seen as a significant factor in failed hires (30% of respondents). 13 For busy nonprofits, the perception may be that there s little time to formalize expectations, yet the payoff for doing so is exponential. Clear, written employee goals that are aligned with organizational goals are key to ensuring employees are working on the right job, at the right time, and using the nonprofit s always limited resources to move forward in a streamlined and meaningful way. 8

9 Identify, challenge, and develop high performers Delivering training and improving performance are only part of the productivity equation. Organizations must also be concerned with keeping and developing top talent for their next role. Without succession planning - retaining, training, and promoting high performers - organizations face a dearth of leadership and people power, detrimental to future productivity. How can nonprofit organizations use succession planning to improve productivity today and ensure continued productivity tomorrow? Make talent visibility a priority. Identifying and managing high performers is crucial to developing a working talent pipeline. This means giving decision makers access to data for the entire employee lifecycle for each employee, from development records to performance improvement. The ability to identify high potentials deep within the nonprofit increases the organization s ability to ensure continuity of services even in the face of increasing Baby Boomer retirements and Millennial job hopping. Engage and develop high potentials with new opportunities. High potentials need opportunities to develop and use their skills. Sixty-three percent of employees surveyed by SHRM said using skills and abilities was the most important factor in job satisfaction. 14 Offering high potentials the opportunity to grow on the job keeps them engaged and productive. Yet it s not enough to ensure high potentials master their existing jobs. Development opportunities should also be used to prepare high potentials for their next roles, which is crucial to keeping the productivity curve on an upward trajectory. Apply succession planning practices beyond the executive level. Succession planning isn t just for executive directors; ongoing productivity and mission fulfillment relies on the continued efforts of the entire workforce. Every role in a nonprofit is critical to the organization s ability to run effectively, especially with limited funding. Creating a talent pipeline for all employees not only smooths transitions but helps every employee see an ongoing future with the organization. High-performing, highpotential talent needs to be challenged and provided opportunities to stay and grow. Without opportunities, these employees may be tempted to take their talents elsewhere. Compensate high performers for performance. A study by Kelly Services discovered that 40% of American workers not currently being paid for performance said their productivity would increase if their compensation were linked to performance and productivity markers. 15 But a pay-for-performance strategy isn t just for corporate entities. Establishing a pay-forperformance system enables nonprofits to compete more effectively for top talent. In addition, allowing employees to be more directly compensated for their actions may also be less costly in the long run. Research by the Center for American Progress showed that the cost of losing an executive can be up to 213% of the employee s salary and up to $10,000 for positions earning less than $50,000 annually. 16 The ability to retain executive directors longer than the current average 3-5 years not only saves money but improves the organization s consistency in the community and preserves its reputation with funders. 9

10 Identify and manage the disengaged In a 2011 study of 3,500 nonprofit workers in the New York and Washington metropolitan areas, 72% found their jobs either disappointing or only somewhat fulfilling. Twenty-five percent stated they were thinking of transitioning to employment in the for-profit world. 17 Unhappy, negative, and unproductive employees in the corporate arena cost the American economy alone $350 billion per year. 18 In nonprofits, these numbers translate to reduced program effectiveness and in turn reduced funding a devastating spiral, as donors are reluctant to give to organizations that can t demonstrate program results. Unhappy employees are also out in the community, sharing their opinions about the nonprofit, which can dissuade current and prospective donors. How can nonprofit organizations better manage disengaged employees? Identify the disengaged. Nonprofit organizations must be able to distinguish employees who are truly disengaged from those who simply need more guidance. This means ensuring decision makers have access to the big picture of talent. The ability to view performance and potential for all employees allows nonprofit organizations to quickly identify those who are taking the initiative on learning, leadership, and performance - and those who aren t. Make the performance evaluation process transparent. Employees need to know where they stand. A transparent performance evaluation process - one based on defined competencies, ongoing assessments, and actionable goals - ensures all employees know what is expected. When an employee doesn t perform up to expectations, managers have a clear mandate to either make corrective measures or let the employee go. Determine the cause of disengagement. Do disengaged employees need additional training, clearer goals, or better job direction? Or are they simply experiencing compassion fatigue and need an altered work schedule or a different assignment? Access to complete talent visibility will illuminate the reasons why employees may be failing. Collaborate with disengaged employees to build a development plan, create goals, follow up on progress, and recognize and reinforce improvements. Be prepared to let underperforming employees go. Employees who continually underperform despite corrective efforts should be encouraged to move on. With a comprehensive recruiting process and an ongoing succession plan in place, organizations aren t held hostage by the disengaged. This puts nonprofits in the powerful position of being able to keep their workforce productive, better reward and retain key performers, and improve morale and overall motivation. 10

11 Success stories 8

12 Organizations that have shifted the productivity curve through strategic talent management Organizations across industries experience similar productivity challenges from sourcing and hiring candidates ready to make a meaningful contribution to identifying, developing, and promoting top performers. Here are five organizations that succeeded in improving productivity by unifying smart talent management practices with Cornerstone OnDemand s talent management platform. Recruiting: Project HOPE Founded in 1958, Project HOPE is a nonprofit global health development organization. They operate in more than 30 countries, yet the organization struggled with outdated, manual talent management processes. According to Miriam Wardak, VP and chief HR officer at Project HOPE, Our old system was clunky. We work in disaster relief and have 24 to 72 hours to deploy teams to disaster zones, yet we were doing background checks by fax, and resumes had to be converted into PDFs and ed. Project HOPE receives thousands of applications, especially during global disasters like the Ebola outbreak and Nepal earthquake. Cornerstone Recruiting has allowed them to streamline the applicant review process through the integration of an online background check, electronic interview evaluations and automated s. We re doing the entire hire and offer process through Cornerstone, said Wardak. It s a huge time saver. Onboarding: KIPP: Houston Public Schools Founded in Houston in 1994, the Knowledge Is Power Program (KIPP) operates 125 free, open-enrollment public schools in 20 states and Washington, DC. Today KIPP Houston relies on Cornerstone OnDemand s talent management suite to engage, develop, and retain top educators and leaders. According to Chuck Fimble, KIPP Houston s Chief People Officer (CPO), We re very excited about using both modules (Learning and OnBoarding) from onboarding and development perspectives. This also helps us significantly with the compliance training we have to do each year. Cornerstone OnDemand gives KIPP access to tools that help keep employees engaged and connected. In education, our turnover rate as an industry is pretty poor, said Fimble. We struggle with that, as well, and one of the things that differentiates us from traditional organizations is we re committed to the development of our people. Developing the employee and working to retain them is our top mission. 12

13 Ongoing Development: American Bankers Association For over a century, American Bankers Association (ABA) has served as the leading voice of the nation s $13 trillion banking industry. The Cornerstone Extended Enterprise platform enables ABA to offer its online learning and development offerings on a unified solution to ABA member banks. The ABA is the delivery hub for ABA s flagship Frontline Compliance elearning library the premiere compliance program for client-facing personnel in retail banks. This program, provided at no cost to ABA members, brings unprecedented value to banking operations at a time of increased compliance training requirements. On the same platform, bankers can access an additional library of skill-building elearning courses specific to their role, as well as access the premiere library of AIB instructor-led courses which earn college credit and lead to prestigious industry certifications. These semester-long courses leverage the Cornerstone Connect solution to enable a social learning forum of integrated discussion groups, providing a leading edge online learning experience. Leadership Development: Teach For America Founded in 1990, Teach For America (TFA) recruits, trains and develops a diverse group of leaders and professionals to expand educational opportunity by teaching in low-income communities. Cornerstone partners with TFA to deliver supplemental content to more than 10,000 corps members each year. In addition to the continuous coaching and support that new teachers receive from the organization, Cornerstone provides ongoing development opportunities. According to Kris Gamache, Managing Director, Learning Systems at TFA, With Cornerstone, we are able to offer a suite of training and development for skill and knowledge building across a breadth of professional streams of work including staff as well as our teachers. The online format enables people to engage in the learning process on an individualized schedule, at their own pace, and doesn t require travel or convening. Our teachers and staff can configure their learning and development to take more effective and more meaningful actions in their work. Talent Visibility: Save the Children Save the Children is the leading independent organization creating lasting change in the lives of children in need in the United States and around the world. Today, Save the Children has been able to automate its talent processes and increase visibility into its workforce. Cornerstone s Performance and Learning Management platforms have led to many successes and have helped Save the Children in numerous ways. New employees are required to attend a one-day orientation and a one-hour seminar each month, as well as complete select online courses. Cornerstone Onboarding enabled Save the Children to bundle this into one centralized curriculum. As a result, employees can essentially drive their own new-hire training, and managers can better track which parts of the curriculum need to be completed. Additionally, Leadership development is no longer a manual process. A unified approach to talent management has accelerated development of the next generation of leaders for the organization. Gathering data about performance and potential enables Save the Children to conduct more accurate workforce planning. 13

14 Shifting the Productivity Curve Toward a Future of Success Planning for employees at all levels to increase learning and development opportunities, feel engaged, and build depth for the future may seem like a tall task, but the solution is actually very simple. By having a team that is continually improving and becoming more valuable, employee productivity curves across the nonprofit will shift to the left, allowing the organization to accomplish more in their communities, create financial stability, and ensure longevity. With a unified talent management (UTM) solution, nonprofit organizations can bring all phases of the employee lifecycle under one platform. From learning about the organization before an employee s first day to offering training courses and readying high performing employees for the next few years of their careers, UTM solutions help nonprofits find qualified employees, develop their hard and soft skill sets, and ensure organizations have the talent they need today and for the future. Research has shown that the more organizations invest in talent management products, the more they increase their return on investment (ROI) per employee and thus increase their ROI on donor funds. Processes will evolve and strategies may come and go, but the one constant is that increasing the productivity of employees will result in a nonprofit s ability to continue to affect change in their community and in the world. To learn more about Shifting the Employee Productivity Curve for your organization, visit us at csod.com/nonprofit Cornerstone OnDemand is a global talent management software provider that is pioneering solutions to help organizations realize the potential of a modern workforce. csod.com 2015 Cornerstone OnDemand moreinfo@csod.com CSOD Stay connected:

15 1 Mary Lorenz. What s the True Cost of a Bad Hire? The Hiring Site Blog. Career Builder. December 16, Accessed on November 18, 2014, at 2 Jennifer Taylor Arnold. Employee Referrals at a Keystroke: Your Employees Could Be Your Best Source of Job Candidates Especially If Your Computer System Efficiently Handles and Tracks Their Referrals. HR Magazine. March 12, Referral Madness: How Employee Referral Programs Turn Good Employees Into Great Recruiters and Grow your Bottom Line. Career Builder. Accessed on November 18, 2014, at careerbuildercommunications.com/pdf/referralbook.pdf. 4 Mollie Lombardi, Jayson Saba. Talent Assessment Strategies: A Decision Guide for Organizational Performance. Aberdeen Group. March Page 5. Accessed on November 11, 2014, at Aberdeen.pdf. 5 Megan Webb-Morgan. What Every Leader Should Know About Onboarding. The Mojo Company. December 14, Accessed on November 18, 2014, at 6 Talya N. Bauer, PhD. Onboarding New Employees: Maximizing Success. Society for Human Resource Management (SHRM). Page 6. Accessed on November 11, 2014, at documents/onboarding%20epg-%20final.pdf 7 Keith Rollag, Salvatore Parise, and Rob Cross. Getting New Hires Up to Speed Quickly. MIT Sloan Management Review. Massachusetts Institute of Technology. January 15, Accessed on November 11, 2014, at sloanreview.mit.edu/article/getting-new-hires-up-to-speed-quickly/. 8 Susan Sorenson. How Employee Engagement Drives Growth. Gallup Business Journal. Gallup. June 20, Accessed on November 18, 2014, at 9 Gregory P. Smith. Training and Development Leads to Higher Productivity and Retention. Business Know-How. Accessed on November 18, 2014, at 12 Jim Asplund and Nikki Blacksmith. The Secret of Higher Performance. Gallup Business Journal. May 3, Accessed on November 14, 2014, at 13 Robert Half Survey: Executives Say Poor Skills Fit Most Common Reason New Hires Don t Work Out. PR Newswire. September 29, Accessed on November 18, 2014, at Employee Job Satisfaction and Engagement: How Employees Are Dealing with Uncertainty. Society for Human Resource Management (SHRM). Page 4. Accessed on November 17, 2014, at legalissues/stateandlocalresources/stateandlocalstatutesandregulations/ documents/ %202012_jobsatisfaction_fnl_online.pdf. 16 Performance Pay Gaining Support Among US Employees, According to Global Survey by Kelly Services. Kelly Services. Accessed on November 18, 2014, at performance-pay-gaining-support-among-u-s-employe-nasdaqkelyb Heather Boushey, Sarah Jane Glynn. There Are Significant business Costs to Replacing Employees. Center for American Progress. November 16, Accessed on November 18, 2014, at org/issues/labor/report/2012/11/16/44464/there-are-significant-businesscosts-to-replacing-employees/. 18 Peter Bolton. Nonprofit Employers Don t Meet Workers Needs for Job Satisfaction, Surveys Find. The Chronicle of Philanthropy. October 24, Accessed at Their/ The High Cost of Disengaged Employees. Business Journal. Gallup. April 15, Accessed on November 18, 2014, at com/content/247/the-high-cost-of-disengaged-employees.aspx. 10 bid, Gregory P. Smith. Training and Development Leads to Higher Productivity and Retention. 11 Jeff Fermin. 10 Shocking Stats About Employee Engagement [Infographic] OfficeVibe. January 28, Accessed on November 18, 2014, at