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People Hate Performance Reviews…Until Now

One in four employees dreads performance reviews. Read how Kawasaki Motors Corp., U.S.A. broke that stat and triggered a culture change throughout the entire company.

"One in four employees dreads their performance review more than anything else in their working lives," notes Drake Bennett's article in Bloomberg Businessweek. He argues that feedback is often cluelessly delivered, poorly timed, and driven by the giver's own insecurities or ambition.

Not surprising, Claire Suddath explains in her article that only 5% of employees are satisfied with their company's review process. Even worse, a 2010 Sibson Consulting study found that a whopping 58% of HR managers dislike their own review systems. Studies date all the way back to the 1930s when Harvard Business School professor, Elton May, tracked the behavior of workers in a Western Electric factory. He found that a positive social structure in the workplace directly relates to increased happiness and productivity (Bloomberg Businessweek).

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The proof of this study lies in a recent corporate culture change at Kawasaki Motors Corp., U.S.A. (KMC). KMC takes credit for some of the coolest and most intense motorcycles and recreational vehicles on the market, including Ninja sports bikes, Vulcan cruisers, and JET SKI watercrafts. One would only assume that the corporate culture at the KMC office would be of similar energy and intensity, but that wasn't always the case. Prior to 2006, KMC performed paper-based, manual reviews, and whether you're the manager or the employee, paper-based reviews are time consuming, difficult, and nerve wracking. Miscommunicated expectations, inaccurate measurement of employee goal achievement, and subjective standards are a recipe for biased ratings, unfair rewards, and unhappy employees. Tom Porter, Director of Human Resources and Administration at KMC, explains, "Our rating scales, completion rates, and results differed greatly from one department to the next. That meant we couldn't accurately measure employees' performance on established goals or determine their personal and career development needs."

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However, by shifting its talent management process to a single cloud-based platform and mobile application from SuccessFactors, an SAP company, KMC completely changed its culture. Porter notes, "It [SuccessFactors] introduced accountability and has been greatly beneficial. It's simple, and that's the beauty of the cloud." KMC began by implementing SuccessFactors Performance & Goals, and after quickly reaping the benefits, it chose to implement several additional SuccessFactors solution modules. "We began by transforming performance reviews into an electronic process," Porter explains. "We ended up sparking a cultural change towards greater consistency and discipline in all our talent management activities."

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In addition, with SuccessFactors solutions, KMC doesn't waste time on upgrades, as this is done automatically through cloud management. When KMC wants to tweak or redesign a process, custom development is a just few simple clicks away - not hours wasted on complex coding. With more efficient processes in place, KMC has the freedom to focus its time on the important stuff--its people and their development. HR staff now monitors progress at all stages of performance review, goal setting, and compensation planning. And goals are easily unified and compared across all departments to provide leaders insight into organizational improvement.

The proof of value is in the people. Watch this short video to hear why one employee notes, "I started here at Kawasaki because of the motorcycles, and I stayed here because of the people."

At Kawasaki the evidence is clear that by empowering employees through the use of SuccessFactors solutions, company culture and productivity improves. "We wouldn't be a leader in our market today if we hadn't used SuccessFactors to align our employees with corporate objectives," Porter concludes. So now I'll ask: Do you lose sleep leading up to your performance review? Could your company use a corporate culture revamp? Or is your company already seeing value of running talent management in the cloud?

Share your answers with me on Twitter @CMDonato, LinkedIn, Google +, and in a comment below.

This article originally appeared on SCN in SAP Business Trends.