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Unit 8: HR in Operations

8.5.1 Fully Integrated Performance System Notes

Following are the key characteristics of Fully Integrated Performance System:
Role-based Access to the Right Information: Role-based access to information is the ability to
customize the information employees are able to see based on their functional role in the
organization. For example, the sales associates on the floor in a store may be able to view their
own sales results versus objective, whereas the store manager has the ability to access the sales
performance for all sales associates in the store.
In most retail operations today, the managers across various functional areas and within various
levels of the operation have a limited view of the information actually available within the
organization. This often makes it difficult for them to access critical information that might help
them improve their job performance. For example, it is common – in many retail organizations
today – for store managers not to have access to real-time sales information.
IBM conducted six retailer-specific workshops to gain an understanding of the business capabilities
a store management team would want from new technology. The store management teams in
different organizations consistently identified “access to information” as the number one
challenge inhibiting stores from carrying out their objectives of maximizing sales and controlling
variable expenses. With an integrated performance management system, retailers have increased
role-based access to consistent information across functional business areas, so that
employees – including store managers – have the information they need to perform their job
effectively.
Ability to Link Metrics and Objectives through the Depth and Breadth of an Organization:
Cross-organizational integration is the toughest and most fundamental requirement of a
performance management system. Because managers scattered across departments and within
varying levels of an organization may be working from personalized scorecards, dashboards,
and reports, it is necessary to have a system in place that can integrate all of this to ensure all
departmental and regional objectives are in synch with the overall corporate objectives. By
enabling managers to see the breadth and totality of company operations, and by allowing the
linkage of top-level business metrics down through to the employees in the stores, and to site-
specific operations, an integrated performance management system can help retailers accomplish
this monumental task.

Example: By choosing “receivables less than 30 days” as a KPI for an accounts receivable
clerk, a retail manager is ensuring the clerk’s objectives fit with the corporate objective of
increasing profitability. By selecting “mis-picks” in store distribution routines as a KPI for a
distribution associate, the manager is ensuring the distribution clerk is working towards the
corporate goals of maximizing efficiency and increasing customer satisfaction, both of which
also serve to maximize profitability.
Timely, Actionable Metrics: Performance management does not equate to a post mortem of the
previous month’s performance. The metrics must be delivered in a timely fashion, and in a way
that makes it simple for managers to act upon them in near real time. Giving a store manager
overtime reporting after the close of the period does not allow him/her to make changes to
improve operational performance in that period, although staffing and scheduling processes
may be revisited to improve performance in subsequent periods. Overtime reporting that is
timely and actionable, such as reporting weekly, or a report showing associates with over 30
hours midweek, could allow the same manager to shift the current week schedule and avoid
overtime expense. Ensuring timeliness of information is the critical difference between
performance management and performance reporting. Finally, in addition to having access to
timely information, employees must also be provided with the processes for taking action,
initiated by the performance management and supporting systems.

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