Quantifying Employee Performance Management — It’s Tougher Than You Think
By Zach Thomas
As you may, or may not, know Forrester has one of the most rigorous Total Economic Impact (TEI) – or ROI methodologies out there. "The ROI Of Packaged Apps Instance Consolidation" and "The ROI Of Interactive Chat" are a couple of completed TEI reports (you need client access to view these reports) and below is a graphical representation from the second report, to give you a flavor.
So, I decided to create a TEI model for employee performance management. I thought it would be pretty straightforward and valuable to clients who are looking to better manage performance, identify top and bottom performers, implement pay-for-performance, etc. — especially in this economy.
Over the last couple of months we have been speaking with numerous software vendors, consultancies, and organizations about this very issue. Sure, it was easy to quantify efficiency-based cost savings like easier reporting, time savings for managers and employees, etc. But how about these? (And remember, you have to show verifiable, measurable dollar savings directly linked to employee performance management):
Increased employee engagement
Increased productivity due to competency alignment with job requirements
Reduced time to productivity in new roles/projects
Visibility into your bench strengths
Visibility into goal attainment
Competencies aligned with job requirements
These are just a few examples of the benefits that neither vendors, clients, nor consultancies could quantify to my satisfaction. Anyone have suggestions on how to quantify these?