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How To Motivate and

Retain Key Employees
Consistent and Objective Results for
Performance Reviews, Succession,
and Compensation Management

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SUCCESSFACTORS CALIBRATION

SuccessFactors
Calibration
How To Motivate and Retain Key Employees

Consistent and Objective Results for Performance Reviews,

Succession, and Compensation Management
The ability to make objective performance, pay, and promotion decisions is a requirement to motivate and
retain key employees. Inconsistent or subjective ratings by managers can erode employee loyalty and
negatively impact the companys bottom line. Many companies have taken steps to eliminate this
inconsistency by calibrating performance ratings, compensation, and succession decisions across the
enterprise. But they still struggle because their current processes and tools are ineffective, complex, and
time-consuming.
This paper will briefly review the challenges that enterprises face when trying to calibrate employee
performance review data, and discuss the potential impacts to the business if these processes are not done
well. The SuccessFactors Calibration solution will then be introduced, describing the benefits it can provide to
employees, managers, and HR representatives. The paper will conclude with a discussion of how Calibration
can add objectivity and functionality to the SuccessFactors Performance Review, Compensation Management,
and Succession Management modules.
What Happens When Managers Dont Rate Objectively
When performance reviews are not objectively applied across a company, it negatively impacts both individuals
and the organization. By not accurately identifying the highest performers, companies face the risk of rewarding
and promoting the wrong people. They may end up placing their average (or even lowest) performers on top of
the org chart.
Subjective ratings often lead to a perception of unfairness and dissatisfaction with the performance review
process. When the least productive workers are over-compensated, top performers feel under-appreciated and
may leave for greener pastures. When these high-performing employees leave, businesses are no longer able
to execute on their strategic objectives and the costs to replace these highly skilled individuals if they can be
found at all can be substantial.
The negative impact of uncalibrated data goes far beyond the perceived employee perceptions of unfair or
inconstant treatment. With subjective ratings, companies end up distributing bonuses and pay raises to people
who dont deserve them. This results in a significant waste of money and a major hit to the companys bottom
line ultimately lowering the companys return on its performance management initiatives.

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Shortcomings of Current Approaches to Calibration

Companies know that if their ratings are inconsistent, the results will negatively affect all of their talent
decisions. To achieve consistency, these companies have turned to a variety of different tools to calibrate the
ratings process and establish a level playing field across teams.
Many companies today are still attempting to calibrate their employee data manually. Performance reviews are
often completed using a talent management system. Employee information is then extracted out of these
systems into spreadsheets, and sent back to the managers. HR then conducts calibration meetings to review
the data with managers and discuss how they rated their employees.
After the calibration sessions, HR makes adjustments to any ratings that might be incorrect hoping to
establish a level of consistency across all employees and make ratings an objective process. But with
inadequate or poorly integrated tools, HR teams and managers are simply unable to make the right decisions
during these calibration sessions.
HR needs the ability to calibrate all employee performance data easily, accurately, and automatically. To do this,
they must gather all of the employee data into one place in a consistent format that is conducive for comparing
employees objectively, identify which employees were rated incorrectly, and then make the resulting changes
easily. Also, current calibration processes are so complex that managers ultimately do not have the time to
focus on their employees and understand them better, since these time-consuming processes are diverting
their attention from the actual review sessions.
Improving Performance Management with Calibration
SuccessFactors Calibration provides a simple, automated, and streamlined way to identify the companys true
top performers, reward them fairly, and promote them to leadership positions. With the right talent in the proper
place, employees are more engaged and motivated, the best are retained, and the ones that are not on the top
are identified for development programs. With these capabilities, companies are well positioned to execute on
their strategic goals.
Making the right calibration decisions requires that managers consider everything about the employees that
they need to compare and calibrate. SuccessFactors Calibration tightly integrates with the entire
SuccessFactors Business Execution Suite to ensure that managers have easy one-click access to all necessary
information, including employee goals, ratings, competencies, compensation plans, and succession history in
one, centralized location.
SuccessFactors Calibration enables managers and HR to make sense of all of this data by presenting it in an
intuitive, graphical format so they can see exactly how employees compare with one another. Presentation
formats include bin views for ratings, 9-boxes for performance versus potential, performance versus comparatio (the formula commonly used by compensation professionals to assess the competitiveness of an
employees pay level), and much more.

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Success Factors Calibration provides a wide variety of benefits to todays enterprises:

Business Benefits. By accurately calibrating performance, compensation, and succession across all geographic locations managers can be objective in how employees are assessed, awarded pay raises, and
promoted to leadership positions. Calibration enables companies to identify, retain, and motivate their top
performers. It also helps identify employees that would benefit from additional training or development
opportunities, and protects the bottom line by reducing the risk of overcompensation.
HR Benefits. The SuccessFactors Calibration module streamlines the setup, administration, and management of all calibration processes, enabling HR to focus on more strategic activities.
Manager Benefits. SuccessFactors Calibration provides HR with the ability to coach managers on how to
rate more subjectively and effectively. With proper training, managers can have more meaningful, objective
dialogues with their employees without being burdened by the administrative complexity of the performance
review process.
Using Calibration to Enhance other SuccessFactors Performance Management Modules
Many companies have already achieved great results with their SuccessFactors Compensation Management,
Succession Management, and Performance Review modules. But without calibration, they might not be driving
these solutions to their full potential. The reality is that users of these systems are not always consistent in their
decision making processes. SuccessFactors Calibration provides an excellent opportunity to add the power of
objectivity across all of these well-received solutions.
The SuccessFactors Calibration module is an integrated part of the entire SuccessFactors Business Execution
suite there are no error-prone uploads and data feeds to integrate data across all of the companys
performance management solutions. With SuccessFactors tightly integrated set of performance management
solutions, all employee data is automatically available across the customers Calibration, Performance Review,
Compensation Management, and Succession Management modules. Also, changes made in Calibration are
securely written back to these other modules.
SuccessFactors Calibration adds significant value to the following Business Execution Suite modules:
SuccessFactors Performance Review. Performance ratings drive nearly every critical talent decision in the
company. Calibration can eliminate managers bias and make sure ratings are driven purely by employee
performance. The SuccessFactors Calibration module will ensure these decisions are objective, well-informed, and driven by data and not simple gut feel.
SuccessFactors Succession Management. Calibration enables enterprises to easily identify top performers.
Companies can fill their leadership positions with the best people across teams, without relying on subjective
judgment calls. It has been estimated that top performers are up to three times more productive than other
employees. Having those that are capable in management positions is a huge boost to the achievement of
the enterprises business goals.
SuccessFactors Compensation Management. Knowing who top employees are enables companies to
distribute compensation budgets correctly, which motivates and retains the best. Accurate compensation
management will also improve the companys bottom line.

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Figure 1. SuccessFactors Calibration empowers companies to measure performance accurately, compensate and promote the right individuals, and identify
training opportunities for employees needing further development.

Summary
SuccessFactors Calibration completely transforms calibration into a simple and effective process, bringing true
objectivity to performance, pay, and succession decisions. With SuccessFactors Calibration, HR can finally
support executives with the right and accurate data to make key people decisions regarding compensation,
promotion, and development. With the right talent in the right place companies will be well positioned to
execute on their strategic goals.

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SuccessFactors
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