5 Things High-Performing
HR Teams Do Differently
It hasn’t been an easy couple of years for HR. Between the sudden rise of remote and hybrid work, the Great Resignation, and now an economy in turmoil, organizations have had a lot to contend with.
With so many challenges, it’s almost a given that some teams will fall short. But with people strategy playing a central role in today’s workplace, meeting HR goals is more critical than ever. So what might we learn from the highest-performing HR teams?
The 2023 State of People Strategy Report offers insights into the programs and strategies global HR leaders are focusing on today. Based on survey responses from over 800 HR professionals from around the world, it also highlights what HR’s top achievers — those meeting or exceeding their goals — are focusing on.
5 Things High-Performing HR Teams Do Differently
1. High performers invest in pay transparency and equity
No matter how much HR teams and employees want pay transparency, organizations still have an underlying fear of implementing it. At least that’s what our 2023 State of People Strategy Report suggests.
More than half of all respondents said they are investing in pay transparency measures, with 20% putting in what they call “considerable” effort. Yet overall, compensation transparency among employees is still relatively low: Only 9% know the pay band above theirs. On HR’s part, this seems to be due largely to fear and uncertainty. With compensation equity still a work in progress (85% of respondents acknowledge they need to do more here), there may be disparities that organizations don’t want to bring to light.
But HR high performers are the exception, with 37% investing more in compensation transparency — compared to 24% of low performers. And that’s probably because they’re already performing well on pay equity (88% vs. 37%). In other words, they’re confident about their pay practices and have little to hide.
2. High performers are addressing unconscious bias
The highest performers don’t just prioritize transparency, though — they also embrace diversity, equity, inclusion, and belonging (DEIB). And to help ensure it, they’re investing effort and resources into reducing unconscious bias across the board so that everyone has a chance of success.
Unconscious bias is a problem for HR teams everywhere — impeding diversity and making it harder for some employees to get hired or grow in their roles. It’s also something that concerns employees. Our compensation survey showed that 51% of U.S. and U.K. employees believe bias influences pay decisions.
The good news? Most HR leaders today understand the importance of addressing this key issue. Our 2023 State of People Strategy survey shows that 61% are putting in more effort to reduce bias in their performance reviews. But more than half say they still have considerable room for improvement.
The high performers, though, aren’t just putting in the work — they’re covering their bases. Fifty-seven percent have implemented programs for reducing bias in reviews, compared to 20% of low performers. But they haven’t stopped there: 40% of high performers (versus 21% of low performers) have implemented software to reduce bias. Compared to more subjective manager training, software offers objectivity that goes a long way in reducing bias — making it a good place to start if that’s one of your HR goals.
3. High performers link compensation to performance
Our survey responses show us that HR leaders overwhelmingly (83%) recognize the importance of linking pay to performance. In a hybrid or remote workforce, where managers don’t have the same physical face-to-face contact with their employees, it’s especially critical.
That doesn’t mean everyone’s doing as much as they can to implement pay-for-performance programs, though. Or, for that matter, achieving the same results.
Where the high performers stand out is in how much they’re investing in establishing this link. Forty-six percent of HR teams that are meeting or exceeding their goals are investing more into pay-for-performance programs, compared to 22% of low-performing HR teams.
And that investment is paying off: High performers are simply more able to link performance and pay as well. Sixty-four percent of high performers, compared to just 27% of low performers, say they’re able to make that link. One of the reasons for that? They have more data to guide them.
4. High performers are data-driven
One of the biggest differentiators that sets high performers apart is how they make their decisions on all of the above. That is, none of the decisions they make are accidental. Rather, they let data drive them. And they don’t leverage just one type of data, either.
The 2023 State of People Strategy Report shows us that high performers invest more in HR and analytics as a whole (50% vs. 18% of low performers) and are more likely to have executive boards that pay attention to HR data (36% vs. 19%). And while for most organizations’ managers remain the primary source for ongoing feedback outside of formal reviews, high-performing HR teams dig deeper.
High performers are more likely to use feedback from a manager’s manager in reviews (42% vs. 18%). But they’re also more likely to use mostly quantitative data in reviews (52% vs. 25%) — again, making the effort to remove potential bias from the decision-making process. They’re also constantly putting that data to work.
5. High performers are continually improving
By running more reviews, investing more in HR and analytics, and collecting more data as a whole, high performers are able to make better decisions regarding their HR programming. In doing so, they can leverage feedback, learn more about what employees care about, and continually get better at what they do.
In other words, they can use that data to constantly improve on the programs they’re offering, creating a positive feedback loop that allows them to measure their efforts and then make investments in programming that will keep building on what they’ve done. And that’s how they continue to meet and exceed their goals.
So what does that mean for the teams that aren’t currently meeting their goals? By looking at the high-performer data, we can start to see what investments have the greatest impact. As we’ve seen in previous Lattice surveys, pay transparency, pay for performance, and bias reduction are all programs employees care about. Not surprisingly, then, investments in these areas can positively impact engagement and retention as well. The data high performers draw on shows them that.
With the right data at your fingertips and a process of continual improvement in place, it can guide you the same way.