How M.U.D. Improved Performance Appraisals With SuccessFactors

by:
on September 28, 2015

An infamous Gallup poll tells us that more than two-thirds of U.S. workers were “not engaged” or “actively disengaged” in their jobs in 2014. Odds are, you’ve seen similar results in your own workplace.

But what can you do about it?

In a new five part Software Advice Q&A series, we talk to human resources (HR) software buyers who have not only experienced organization and efficiency benefits from their purchase, but have seen improved employee engagement, as well.

For this first installment, we speak with Raied Stanley, vice president of business systems at Metropolitan Utilities District (M.U.D.) in Omaha, Nebraska. For an organization constantly trying to stay on top of the latest technologies, its performance appraisal process was decidedly stuck in the Dark Ages.

But after implementing SuccessFactors, Stanley and his team now have been able to improve performance appraisals —and have more productive employees as a result.

Employees can now go in every day to SuccessFactors and tell me if they met a milestone, or if they met a goal or why they’re lagging. It has just made the entire process—from HR to the managers, up to our senior level and back down—seamless.

Raied Stanley, Vice President of Business Systems, M.U.D.

Q: What type of company is M.U.D.?

It’s a public utility. We’re located in Omaha, Nebraska and we serve about 267,000 customers and we have about 500,000 meters. We do gas and water, and we also bill and collect sewer and trash for seven different cities around Omaha. Right now we have about 920 employees.

Q: What are your primary responsibilities as vice president of business systems?

I’m in charge of all the software systems that run at the district. My responsibility is making sure that those are up and running and that we’re meeting customer needs, internally and externally. The entire portfolio management of the [enterprise resource planning] ERP system is another one. We use SAP for our ERP, so I establish and manage all of the relationships with them, along with our other vendors.

I [also] assess the project risk. We have what we call an “ITAC” that I lead, which is the Information Technology Approval Committee, and every project that is IT-related goes through the ITAC. We assess the project risk, we associate it with a return on investment and that’s how we implement our projects here.

Q: Let’s dive in to your performance review process. What did it look like before SuccessFactors?

Well… [laughs]

Or maybe it didn’t exist!

No, it actually did exist. The problem was it was heavily paper-based. Managers and directors were essentially copying the same [Microsoft] Word document from last year, changing a few words and giving it to the employee.

You don’t even know what their strengths and weaknesses are. It was essentially just five things you had to do in the year 2012, for example. If they met those five things, they would meet with their manager and get their progression increase. If they didn’t meet their goals, they would still get their progression increase.

It was very manual; very time-consuming. There was no real thought or energy put into it, so the results of those were very weak.

Q: Would you say that performance reviews were pretty one-sided? That managers would give feedback to employees and that was it?

Yeah, even if that actually did occur. I do believe that a lot of managers just wrote the performance appraisal on a [Microsoft] Word document and gave it to the employee without actually meeting with them. If the employee felt that’s all they needed and that they were good to go, they would all sign it, and off they went. Then you would hope to God that the piece of paper made it into the HR file. There was really no feedback between the manager and the employee before implementing SuccessFactors.

Annual performance reviews in SuccessFactors
 

 

Q: What was the employee sentiment about performance reviews pre-SuccessFactors?

The employee sentiment at the time was that if they got a performance appraisal, they were lucky to get one. There was no accountability. There were employees [who] hadn’t had a performance appraisal for five to 10 years, some of them.

The feedback has always been that … doing performance appraisals was a waste of time with the way we were doing it. To be honest with you, that’s a pretty accurate statement, because really nothing came out of it. It was just a piece of paper that people signed and off it went. There was no communication back-and-forth.

Primarily a manager would just say, “Hey, you know what? You completed this, that can be one of your goals.” It was kind of a joke, to a certain extent. We were doing a disservice to the employee.

Q: Did you see performance issues with employees as a result?

Oh, of course. Performance suffered, because organizational goals weren’t integrated. Quality and quantity [of performance appraisals] suffered doing it in a paper-based way. Timeliness of projects suffered, and safety, to a certain extent, wasn’t addressed.

Q: Can you cite any specific examples?

I wish I could, but you just knew that the process was broken. The only thing we could quantify: Out of 900 employees [who] were supposed to get a performance appraisal, only about 70 percent got one. Thirty percent were missing a part of the process, and 30 percent is a lot. And those 70 percent [who] did get a performance appraisal, there was really no substance to it.

Q: Was there a “straw that broke the camel’s back” that led to the decision to look at SuccessFactors to improve performance appraisals?

Yeah. The district was going to do pay-for-performance, an idea that grew out of the senior management saying: … “You can’t just give everybody a 5 percent increase across the board.” What we had to come up with was a mechanism, a technology, that would keep track of goals and performance, and tie that back into their compensation.

Q: When did M.U.D. start looking for a new performance review system?

It was back in 2013. Initially, HR had a capital budget item to build some sort of system in-house. We pushed back in the ITAC, and we said, “we’re not approving this.” We said, “we either need to look at an SAP solution, or we need to look at a party that can fully integrate with [the SAP ERP system we have].”

I know SAP has tools within the core HCM module, but they didn’t meet the needs of what we were looking for. But right around that time, SAP had purchased SuccessFactors. Locally here in Omaha, there are a number of companies that use SuccessFactors, and had it integrated to SAP even before SAP purchased it. It became an extension of SAP, which we were very happy with.

So we decided, through our research and through our vendor evaluation, that SuccessFactors was the number-one player, and we decided to move on with them from that point.

Q: What drew you to decide on SuccessFactors? Were there any must-have features that SuccessFactors filled?

It was a cloud-based solution, [so we could] go to market quick with it and make sure our costs were low enough to implement without a lot of hardware.

It allowed us to develop and align goals. That’s the number-one thing. The workflow [in SuccessFactors] was also very important to us. We made sure that there was feedback, meaning an employee would get their appraisal and put comments in for each goal—why they met the goal, why it was only 50 percent completed etc. We also [chose SuccessFactors] from an analytics and reporting standpoint, so we could make sure that every employee got a performance appraisal. If they didn’t, we could ping their manager to make sure they expedite[d] the process.

It was that full-circle that we didn’t have before; the 360-view of each performance appraisal for each employee.

Goal alignment in SuccessFactors
 

 

Q: What was the timeline between deciding you needed a new system, deciding on SuccessFactors and implementation?

It was literally about four months. We decided in early March of 2013, and we were live with [SuccessFactors Performance & Goals] four months later. We also implemented [SuccessFactors Recruiting] at the same time.

Q: What does your process for employee performance reviews look like now with SuccessFactors?

Now they’re obviously much better. Our goals come down from the president to the different levels; we then push them down to the employees and we create their specific goals within the system. Then employees can keep track of those goals until the time of their performance appraisal.

As the performance appraisal is linked to those goals, we keep track of: “OK, you completed this goal; you didn’t complete this goal. Why?” And if you completed the goal, what were the end results? What did we save, what did we do etc. … All the goals are linked to the performance, and the performance has that complete workflow, and we get a lot better communication.

If we have an employee [who’s] not meeting those goals, we actually put that in the performance appraisal, and then we do another performance appraisal six months later [instead of] a year later. We review if that employee is having some issues, so we can make sure that the employee is meeting expectations.

Q: What have been some administrative benefits as a result of the switch?

One of the things you cannot quantify is the time-savings. I’m not sure how many hours collectively at the district we’ve saved, versus writing a bunch of Word documents and trying to make copies, find them, send them etc. That has all gone away now, so everything is electronic. There’s no paper, which makes the interview process seamless.

So, [there are] a number of advantages that we couldn’t really calculate, but I know it has to be in the thousands of hours. Me, having 59 people report to me, [it] saved me at least two weeks’ worth of my time trying to do performance appraisals one by one for 59 people. It was a comedy of errors before. So if you take that across the district, across all of the directors, managers and vice presidents, it’s probably in the thousands of hours.

It has just made the entire process—from HR to the managers up to our senior level and back down—seamless. The beauty of SuccessFactors is everything I’m doing, everyone else can see. Any goal that pertains to me, I can see where it is. People just have more visibility, they can communicate better now. The overall product has been very positive for the district.

Q: You talked about how, before SuccessFactors, maybe only 70 percent of workers were getting the appraisal that they needed. What does that number look like now?

Last year was the first time for our 102-year-old company that we had a performance appraisal for each and every employee in the district. It’s the first time in our history that we have 100 percent participation and feedback between the manager and the employee, which we’ve never had before.

Q: What positive effects with performance, retention or engagement from your employees have you seen since implementing SuccessFactors?

One of the goals we have [in SuccessFactors] is to reduce help desk tickets, and we’ve reduced that by almost 18 percent. Another one is called “timeliness”—where we have to decrease the time a system is down—which we’ve [improved] by 7 to 10 percent here collectively in IT.

The feedback has been nothing but positive on the performance part of it. Now employees actually get to meet with their manager; they actually get to review their goals; they get to actually talk about why they didn’t meet their goals.

That’s an important factor. They can go in every day in SuccessFactors and tell me if they met a milestone, or if they met a goal or why they’re lagging. Sometimes it’s beyond their control, so they want to make sure they put that in. Before, you couldn’t do that, so that communication has been very positive—and the employees actually have responded very well to it.

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