In a recent review by IBEC of it’s members, the cost of running a Human Resources Department was found to average out at 2.05% of payroll costs. If HR is to add value to an organisation, there needs to be a positive, pro-active approach to HR strategies and practices – Irish companies are stating that their no. 1 people management priority for 2013 is performance management, reflecting the challenges employers face in the achievement of business goals.

In her book called ‘Corporate Confidential’, Helen Shapiro (a former HR Manager) alleges that some HR departments are doing more harm than good. One example is the continued use of ‘stack ranking’ devised by Jack Welch back in 1980s where employee performance is ‘forced’ into a ranking where only a fixed quota can get good rankings and others are forced into poor rankings. With the fast moving pace of business and the real need to engage fairly and honestly with employees, this seems to be an outdated method of giving performance management feedback to employees who want to be treated with transparency. Performance management systems need to be simple, practical, easy to implement and fair – HR needs to be championing this process both within the major multinationals and in the SMEs.

We are now moving to a new style of HR that embraces diversity, potential and opportunity for employees, and provides a performance management system that can be trusted and utilised to drive engagement and emotional attachment to the company. Companies need to look at their HR department and ask for innovation and business alignment, moving away from some of the ‘old’ HR practices developed in the 1980s/1990s.

Voltedge works with clients to develop customised solutions to aid them in introducing or changing performance management systems that suit their business, and is embracing the need for systems that can drive results through positive reinforcement and engagement.