How HR supports a winning performance improvement plan

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Continuous performance improvement is about increasing productivity and efficiency in existing processes—doing things faster, better, and with less labor where possible.

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Strategy and C-suite leaders are seeking to optimize today’s ways of working while navigating the rapid pace of social, technological, and consumer changes. The human resources (HR) function is no exception.

One of the most effective tactics: implement processes to empower human capital leaders to make continuous improvements that eliminate redundancies, reduce costs, and increase margins. This focus on the human capital function should be part of a larger transformation to become a culture of Continuous Performance Improvement (CPI) across the organization. With a culture of CPI, everyone in the organization focuses on increasing productivity and efficiency in existing processes—even if those processes already represent improvement over prior approaches.

To be sure, there is no single method for driving CPI amid disruption. KPMG recommends that Strategy and other C-suite leaders apply a wide lens and a balanced approach. The best way to optimize results isn’t a focus solely on costs or solely on growth. Instead, balance both goals.

Talent is crucial to establishing and maintaining a competitive advantage. Organizations that attract, engage, develop, and retain top talent through modern and meaningful experiences tend to drive the most productivity increases, efficiency gains, and, ultimately, cost savings from lower turnover. This in turn optimizes and maximizes the potential of their workforce and helps chart an effective path for future growth.

Failing to optimize a workforce through human capital programs—developing succession plans and specialist career pathways, for example—can result in negative cost impacts and long-term repercussions.

To avoid that fate, forward-looking companies are going all in on addressing employee experience. Indeed, in a recent KPMG survey of 300 chief HR officers (CHROs), 61 percent said they need to alter their employee value proposition (EVP) in response to the external labor market. The respondents told us that some of the most important parts of the EVP when attracting, developing, and retaining talent are culture (50 percent), company values and purpose (47 percent), fair pay (34 percent), and offering flexible working (33 percent).

At the same time, leaders are actively exploring the potential value of generative AI. Workforce transformation—through immediate worker role augmentation—is at the center of that exploration. The HR function is key to advancing in the journey, which starts with addressing four workforce considerations:

Identifying capabilities, roles, and enablers
Addressing risk and compliance
Activating role augmentation
Capturing value

Getting to an optimized state means more services and more digital capabilities underpinning it all. HR organizations need to deliver that experience in a highly cost effective and positive way that inspires people to continuously seek ways to improve how they work and adapt to change.

KPMG recommends a CPI approach, grounded in data and metrics, which can help improve EVP. It also better enables employees to focus on value-added activities—including the shift to GenAI-enabled work. For example, payroll processing cycle times could be shortened by modernizing the organization’s timekeeping solutions, which then frees up managers to focus on operational outcomes.

When employees call in for HR help versus leveraging a self-service option, a tangible impact to their experience is the time required to get a response and handle follow-ups, as well as the quality of the resolution. A CPI-minded organization conducts continuous reviews of whether the right systems, shared services, offshoring, or outsourcing model is in place to derive cost efficiencies while improving response and cycle times for its key services to the business.

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