Why Human Capital Management Really Needs a Social Model

I’ve spent my career building business applications.

I’ve created ERP, CRM, supply chain, and industry solutions at Oracle, SAP, Salesforce.com, and other market leading companies. I’ve seen the continual change that our industry has created — or eventually accepted. Social is the latest such change. And I believe it will have the greatest impact on business systems since our industry started.

Think about “Human Capital Management.” I cannot think of two more commonly used but wholly contradictory expressions than “Social Enterprise” and “Human Capital Management.”

HCM needs a social model

“Social Enterprise” engenders a feeling of happy people coming together to achieve a common goal. There is great collaboration and meaningful transparency, which leads to both trust and alignment. By contrast, “Human Capital Management” sounds like a process for turning people into livestock for the company slaughterhouse.

But if there is any area that desperately needs a social model, it is HCM. People-centric systems should promote connection, communication, and collaboration. That is the core of the social enterprise.

Consider performance management, which is one of the most important processes for every company. Performance management systems are universally hated. Why? Because they create work for every employee in the company, while serving only to meet HR-driven compliance processes. Somewhere along the way in building these systems, we focused the core design on the wrong problem. And it’s as true for the most recent cloud-based systems as it is for traditional on-premise applications.

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The keys to performance management systems

So what should performance management systems do? It’s hard to believe we need to even ask this question. But given the history of how these systems were developed and designed, the reality is that we need to fundamentally rethink their purpose.

  • They should promote a continual dialogue across an organization around what the top goals are, how they will be accomplished, and how people are doing as they work to complete them. This then becomes the basis for meaningful feedback and collaboration — the true essence of performance management.
  • To do this well, these systems have to be designed differently from the very beginning. They must be engaging, easy, and fun to use. If they are not, no one will use them. And without usage, there will be no information. Lack of meaningful information is the hallmark and curse of every legacy HR system.
  • The system should be highly collaborative. Goals, key results, and actions should be understood and agreed on by entire teams. In designing a framework for achieving organizational alignment we should embrace a “bottom up” model for setting team and individual goals. Every individual — not just the bosses — should be able to define their goals, and help determine the results that constitute success. People should be invited to participate in meeting these goals. Making this process collaborative — and allowing people to commit to them — creates and fosters a real dialogue across an organization.
  • Feedback should follow the same model. It should be open to everyone — and collaborative. It should support formal goal-driven feedback or simple ad hoc input on a person or topic. The result? Transparency, trust, and alignment.

A new social model for what has been traditionally known as HCM will drive broad engagement by users — while also creating useful, meaningful content for organizations. A social HCM system still supports the creation of formal reviews and metrics-based assessments. But these processes now benefit from the rich dialogue possible because of the social design model.

The result is a system that both meets the organization’s HCM objectives AND creates the dialogue necessary for a healthy team.