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Is a Skills Analysis Missing From Your Performance Reviews?

Skills-based analytics help organizations understand the realities of employee performance. Learn how to use it during performance reviews.

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Is your team made up of people that will lead your organization to success? As organizations prepare for their annual performance reviews, managers are taking a closer look at their workforce. However, in most cases, these reviews only scratch the surface of what’s happening internally. 

As a result, many businesses aren’t developing their employees and promoting from within. That can lead to having positions left unfilled and employees who lack direction and a plan for their career that will keep them engaged. 

According to the Bureau of Labor and Statistics, “For most of the JOLTS (Job Openings and Labor Turnover survey) history, the number of hires (measured throughout the month) has exceeded the number of job openings (measured only on the last business day of the month). Since January 2015, however, this relationship has reversed with job openings outnumbering hires in all months–meaning that companies need a new strategy to fill key roles.

Today, it’s more important than ever to leverage your talent pool to fuel growth in your organization. This was a challenge in the past, but with skills analysis and talent analytics, businesses can bridge the talent gap.

Why skills have been hard to measure

Skill levels have historically been hard to measure because many of them are subjective. For example, there’s no objective way to measure critical thinking or leadership. To combat this, most organizations provide behavioral indicators for what the skill looks like at each level. However, this is still subject to interpretation.  

“As organizations prepare for their annual performance reviews, managers are taking a closer look at their workforce. However, in most cases, these reviews only scratch the surface of what’s happening internally.”

The second challenge is capturing the measurement. HR tends to rely on qualitative sources like surveys and interviews but this often isn’t effective. Getting someone to sit down, read through skill descriptions, and make judgments doesn’t lead to accurate results.  

People simply don’t take the time to do this carefully. 

Even in cases where people do take the time, these observations are unreliable. Individuals will often over or under-assess themselves and others. In fact, A 2015 global talent management survey by Willis Towers Watson shows that less than half of employers think that their employee evaluation systems are effective

This leads to organizations relying on their feelings about a person’s performance and skills to make business decisions. The truth is that your organization can’t afford to rely on the ‘feeling’ that people are doing well in their roles. You have to consider real data points to get a look at how business is doing, but those data points haven’t always been accessible.

So, the question becomes, how do you bring skills into the conversation and have effective performance reviews?

Skills analysis during performance reviews

Annual performance reviews are common and while they can be helpful, they aren’t frequent enough. Managers struggle to allot enough time to do them well and that can have an impact on your workforce. According to Gallup, only 29% of employees strongly agree that the performance reviews they receive are fair, and 26% strongly agree that they are accurate. 

“Skills-based analytics can help organizations understand the realities of employee performance.”

This issue is likely related to distance bias: The more recent an event is, the greater value is assigned to it. This can lead managers to place more value on recent events instead of looking at employees’ performance as a whole.

An annual performance review is a good time to assess whether your team is made up of the right skills to drive good business outcomes but it doesn’t tell the whole story. It’s best to evaluate skills more frequently to get an accurate view of your workforce. This allows you to stop problems in their tracks and identify ways to leverage your internal talent pool.

How to use skills analysis and talent analytics to bridge the gap

Skills-based analytics can help organizations understand the realities of employee performance. This data allows leadership to:

  • Look beyond the skills that employees are currently using in their current job and see who can move into new roles. 

  • See where there are gaps, or which skills are leaving the organization. With this knowledge, you can streamline hiring, look for very specific skill sets, and focus on training, including stretch projects.

Without analytics, organizations will continue to have a skills gap because they won’t be able to plan the right training. L&D can only measure what’s in their learning system–but business impact goes beyond what’s captured in the LMS. 

It comes from training programs that are tied to organizational goals and knowing whether that training impacts the bottom line.  

People analytics is the key to knowing where your employees are now and where your organization needs to go to achieve your desired business outcomes. This data provides information you need to map out training and career growth. Having complete visibility and data on your people is what will allow you to create the ultimate talent pool inside your organization. 

Making skills analysis simple

With the right people analytics and data, you can analyze employee skillsets and fine-tune your learning programs for optimal employee engagement and overall business success. Skills analysis and talent analytics can answer your best practice performance and development questions. Then, you can quickly translate skills data into better business outcomes.

Free guide: How to Shift Your Organization From Jobs-based To Skills-based (6 steps)

On the Outsmart blog, we write about workforce-related topics like what makes a good manager, how to reduce employee turnover, and reskilling employees. We also report on trending topics like ESG and EU CSRD requirements and preparing for a recession, and advise on HR best practices how to create a strategic compensation strategymetrics every CHRO should track, and connecting people data to business data. But if you really want to know the bread and butter of Visier, read our post about the benefits of people analytics.

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