People Analytics: the Power to Understand How People Work

  • 13/11/2020
  • 1 min reading time
People Analytics
Photo: Avitus Group

GNMI students that follow the People Management course attended Luminita Patras’ talk about People Analytics method and its application to performance appraisal.

Luminita Patras has a PhD in HR Psychology and works as a researcher, lecturer and People Analytics consultant. In her conference, she shed light on the benefits of using People Analytics in HR processes, especially in the performance appraisals, and how it could help organizations to improve the management of their company.

In the first place, Patras explained that one of the biggest challenges that companies are facing is the huge amount of data and the problems related to its management. Moreover, usually, data comes from different sources and has to be unified. Data-driven methods like People Analytics allow to organize and structure a large quantity of data and standardize the information formats.

Until now, the performance appraisal was perceived as a very static process. It usually took place only once a year and evaluated the outcomes without any feedback or without giving the employees the possibility to know where the performance ratings were coming.

However, People Analytics is more focused on the whole process than on the outcomes. By presenting objective numbers, tools like People Analytics allow to consider the performance appraisal as a clearer, more transparent method and to avoid biased evaluations. This kind of analysis can transform performance appraisal into an ongoing, dynamic process. It also provides more information and feedback and allows changing the way employees do their job.

Later on, she spoke about the methodology used by People Analytics. The most important thing is to understand what are the companies’ needs and the goals they want to achieve. Once the company has established its objectives, they have to be turned into measurable indicators. Patras described the three types of analysis used in People Analytics methodology: descriptive, predictive and prescriptive.

The descriptive analysis determines the diagnosis of the organization’s different processes, for example, in the performance appraisal. The predictive one tries to explain the meaning of the results and which are the factors that increase or decrease the performance of the business employees. Finally, the prescriptive analysis points to applying new formulas to improve the company’s results.

To make clear how People Analytics works, Luminita Patras exposed a real-case published in a McKinsey&Company study of a global restaurant chain that applied People Analytics in its performance appraisal. The restaurant business defined the targeted outcomes (customer satisfaction scores by shift, revenue growth by store, and speed of service by shift). The company established three areas to apply the methodology: selection and onboarding, management strategy and job performance. For each field, different factors that affect the company revenues were measured. The results shown by People Analytics allowed the global restaurant chain to understand how its performance appraisal -as well as their incomes- could increase.

At the end of the conference, Luminita Patras outlined some of the challenges that People Analytics will face in the future. She mentioned the complex task to find out how to translate business goals into measurable items, the difficulty in the access and treatment of sensitive data, and the barrier that represents data compliance to show a complete evolution of the processes that take place within a company.

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