Implementing a new performance management system is a big undertaking - influencing employee productivity, engagement and retention.
An often overlooked aspect is the actual decision-making process. We have identified two different approaches.
- Solution-driven buying
- Problem-led buying.
While each approach has its merits, we see more than 90% of HR teams defaulting to a solution-driven approach (the way most vendors would like them to buy). However, there is another option and we'll unpack the two paths so HR teams can make a more conscious decision on which method to use.
Solution-Driven Buying
Starting Point:
This approach begins with searching for performance management HR tech solutions. The emphasis is on finding the best existing solutions that meet general industry standards and practices.
A Typical Journey:
- Search Performance Management HR Tech:
Explore the market for performance management software - online research, asking peers, reading reviews, and identifying popular solutions. In this step, consider if a successful solution in one context will translate to success in your context.
- Engage with Vendor Content Marketing:
Materials provided by vendors include blogs, case studies, research papers, testimonials - they provide good learning, but worth noting they are designed to highlight the preferred approach and unique features of each vendor.
- First Level Filter to 10 Vendors:
Conduct a detailed examination of around ten vendors. Look at their reputations, customer feedback, case studies, and comparison reports.
- Shortlist 5 for Demos:
Narrow down your list to five vendors that resonate most. Schedule product demonstrations to see the software in action and ask specific questions about its capabilities.
- Get Pitch-Slapped, Demo-Dazzled, and Vendorsplained: (humour stolen from LinkedIn threads of HR peeps discussing the buying process)
Experience the vendors’ presentations. Each will showcase their product’s features and attempt to persuade you with impressive demos!
- Solution Selection:
After reviewing demos and pitches, compare the solutions based on their features, benefits, pricing, and fit for your needs. Select the solution that stands out as the most promising.
- Roll Out Vendor Process to Employees:
Implement the chosen vendor’s system and process across your organization.
- Employee Adoption:
Focus on encouraging your employees to adopt the new system. This may involve employees changing their current process to match the new software process.
The Result:
The solution-driven approach is focused on finding an innovative and feature-rich solution. However, there is a risk that the chosen software may not fully align with your organisation’s current capability and unique needs, leading to lower employee adoption and potentially reduced business impact.
Problem-Led Buying
Starting Point:
This approach begins with an understanding of the specific problems and challenges within your current performance management process. The aim is to find a solution that directly addresses these issues.
A Typical Journey:
- Ask Employees What Is Broken:
Start by engaging with your employees to identify pain points in the current system. Conduct surveys, focus groups, or one-on-one interviews to gather detailed feedback.
- Research Similar Organisations and Ask Peers for Inspiration:
Look at how similar organisations handle performance management. Gather insights, examples and learnings that can inform, but not dictate your approach.
- Co-Design with Employees a Process That Works for Your Context:
Collaborate with your employees to design a performance management process tailored to your organisation’s needs. Identify design principles such as 'user experience' or 'simplicity' that employees would like to see in their performance management HR tech solution.
- Ask Vendors to Demonstrate How Their Platform Will Enable Your Process:
When approaching vendors, ask them to show how their solution can support the custom designed process.
- Solution Selection:
Choose a solution based on its ability to solve your specific problem.
- Roll Out Your Process to Employees:
Implement the process designed with your employees and supported by the chosen technology.
- Employee Adoption:
Encourage employees to embrace the new system, knowing it’s built with their input.
The Result:
The problem-led approach ensures the solution is customised to address your specific needs. By involving employees from the beginning, you increase the likelihood of successful adoption and increased business impact.
Which Way is Best?
We believe a solution-driven approach might quickly bring in the latest technology but it may not fit perfectly with your unique needs. Josh Bersin is an advocate of "falling in love with the problem" and believes HR's job literally depends on it. In this 20 min podcast, Josh shares his view and cites an example of performance management tech selection gone wrong.
We believe the problem-led approach - involving employees, tailoring to your unique culture and creating an impact on specific business problems not only makes sense from a results perspective but also from a more human perspective.
So, which path will you choose for your HR tech journey?
Other Resources
The concept of being problem-led vs solution-driven is part of a bigger shift in the modern HR mindset, with people like Luke O'Mahoney leading the PX as a Product movement. You might enjoy a podcast he recorded on this topic with Katja Vincetić.