BPM Meets Employee Performance

Business performance management tools help companies bridge the gap between corporate strategy and human capital management.

Companies that have achieved some success with business performance management (BPM) systems sometimes find themselves eyeing an ambitious goal: tying employee performance directly to overall corporate strategy. This is the ultimate BPM challenge because it requires a degree of integration between financial and HR systems that few organizations have achieved.

Distilling employee data from multiple sources into a single version of the truth has long been a headache for HR directors and finance executives seeking to better understand workforce performance. "You might have an HR system within your ERP [enterprise resource planning] system which is a basic employee services package, plus a compensation tool which is a niche application, along with other systems focusing on different aspects of employee data," says Mark Smith, CEO and senior vice president of research with Ventana Research in San Mateo, Calif. "All of this becomes cumbersome -- particularly for large companies -- to manage. The CFO has to get more involved with these people-oriented [systems] and realize that financial performance and workforce performance must both come together."

BPM tools that offer HR functionality can help CFOs bring some order to the morass of data. But they cannot by themselves align individual employees' performance with corporate objectives, says Jonathan Wu, senior principal with professional services firm Knightsbridge Solutions LLC in Oakland, Calif. "PeopleSoft, for instance, has an enterprise performance management product with a series of modules that includes HR analytics and metrics for HR, and you can pull information out of that transaction system," he notes. "But when it comes to linking your company's strategies to individual performance and knowing how to set tactics for that purpose, there's a disconnect. It's a challenge for any company to manage, monitor and tie individual performance to strategies."

But it's a challenge that can be met. A select group of innovative organizations have achieved success by combining BPM software with a departmental or enterprisewide scorecard.