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ST. PAUL, Minn. - June 26, 2006 - 76 Percent of HR Leaders Surveyed View Talent Management Important to Their Jobs; However, Two-thirds of Respondents Do Not Currently Use a Performance Management Tool
Performance management functionality ranks as the highest priority for HR system enhancements, according to a survey of 318 human resources professionals sponsored by Lawson Software. Performance Management, which includes talent management, ranked ahead of payroll, time and attendance, benefits administration, online recruiting and regulatory compliance.
Lawson announced the results at the 58th Annual Society of Human Resources Management (SHRM) conference in Washington, D.C.
The survey, conducted by Whitney Worldwide Inc., also showed that nearly seven of 10 respondents currently do not use any performance management product. Furthermore, 44 percent of the respondents from companies with more than 5,000 employees said they have a "poor" performance management system, and 30 percent don't have any system. However, 42 percent of respondents view talent management among the most critical aspects of their job.
In fact, according to research firm Gartner, Inc., Employee Performance Management (EPM) is one of the fastest-growing segments of the human capital management (HCM) software market. Studies have shown that business performance improves when there are strong EPM practices, and EPM software is an important enabler of these practices. ("MarketScope for Employee Performance Management Software, 2005," Aug. 30, 2005, James Holincheck).
However, more than one-third of the HR leaders surveyed said that while their human resources department was concerned about talent management, their organization was not concerned.
"Many organizations are increasingly challenged to hire, develop and retain quality employees, but often lack a foundational system to measure and manage employee performance," said Larry Dunivan, vice president, Human Capital Management, Lawson Software. "Organizations are just beginning to realize the value of performance management tools. These systems help managers move away from transactional review processes, and provide leaders with more objective and actionable employee data to align employee performance with organizational results. These systems can help drive compensation, succession management, training and development and more."
"Clients want the efficiency of a solid technology platform, but they need more," said R.J. Heckman, vice president of talent management products for Personnel Decisions International (PDI). "The marketplace is demanding a direct linkage between human capital management and organizational results. This is absolutely the next step in the evolution of our industry."
The survey also showed that the performance management vendor market is fragmented. Of the 30 percent of companies with a performance management provider, 32 percent have an in-house solution. Only one vendor was used by more than 10 percent of respondents.
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