People analytics is a new reality. If you are genuinely ROI centric, then people performance also needs to be measured and improved through analytics. The human capital cost to the company and their cost of complexities are much too high to discount analytics. Return on human capital is a must have initiative for organizations in the coming future.
People analytics starts with some interesting insights. Performance, consist of some very sophisticated intertwined variables. Performance is an outcome of business-constants, skills, competencies, and probability. It is important to discuss each below:
Business constants: Each brand has its inherent capability & capital that it has built over years that provides spontaneous business velocity. Performance of individuals must take this factor in cognizance.
Skills and Competencies: These are innate to one’s personality type and traits. The question is whether these behavioral facets are the correct process drivers. Unfortunately, our assessments of these behavioral drivers are much too subjective in competency frameworks.
Probability: Business is a game of chance too. Sometimes there are near misses and close wins. Best of professionals also suffer because of the game of chance. Worst may perform because of sheer luck.
It is also a reality at times that perceived performers in an organization are the ones who show inconsistent and erratic peaks in performance and get remembered and rewarded for it. But this is a not the way idea of consistency and sustenance works.
People analytics broadly takes all the above three into account and measures the correct signal, which is the input behavior and noise, which could be the error in performance. The best part of people analytics is that the right drivers are identified through predictive analytics and prescriptive analytics with descriptive analytics being its base. These correct process drivers then become a measure of performance as they hold the promise of dealing with the resultant of probability to a large extent. Dashboards are later built to measure this signal of correct process drivers, which ensures and measures the signal correctly.
The ultimate reality is performance will ultimately regress to the mean. But this regression line can alter by controlling the noise. Too much energy of the organization is lost in this world of process noise.
In my journey of people analytics, I have worked on creating correct process drivers for teams and individuals and then build dashboards. It has helped organizations improve reliability factor of performance.
The world is moving towards people analytics, are you? Return on salaries will be the new paradigm of people management.