The economic world remains in a state of flux as we watch and wait for a resolution to the debt crisis. And, after using our veto, the UK is very much a spectator in this process. The uncertainty surrounding the Euro and a flat economy suggests a tough year ahead. But I was buoyed to see that HR professionals appear in bullish mood where 2012 plans and budgets are concerned.

We polled 70 mid-to-senior level HR professionals to gauge expectations for their 2012 budgets in light of the struggling economy. Half of the respondents said budgets would remain the same or increase next year. A further third of those polled (31%) expect a small reduction of their HR budget – by up to 10%.

Put into context, this looks very positive. It suggests that executives are recognising the business value of identifying, developing and engaging talent and aren’t keen to cut back on investment in this area.

It’d be foolhardy to make bold predictions about 2012 while so much uncertainty remains – particularly as the success of the UK’s economy’s is so closely aligned to the rest of Europe. But these figures are at least cause for quiet optimism.

It was worrying, but not altogether surprising to learn that as many as 6/10 major companies don’t have adequate talent planning. Survey findings in People Management revealed this lack of a “systematic or strategic approach” to recruiting, developing and retaining talent to meet future business needs.

Ignorance is surely no excuse in this case. The ‘war for talent’ has been very well documented. It is firmly entrenched on the corporate agenda for big businesses. And with the shortages of skilled workers becoming more acute, now is the time for action. More major companies must now consider a longer term approach to talent planning. Too many still appear to be short-sighted in their approach. This is backed up by the survey findings. Results show that talent programmes focus primarily on experienced executives – only 35% of companies systematically develop younger talent.

As the shortage of skilled workers and business leaders deepens, a more forward-thinking approach is needed. Having established some valid criteria to define and identify talent introducing an automated performance and talent management solution will help to identify the next generation leaders within the organisation.

The economic picture again seems to be dominated by doom and gloom. Let’s leave talk of the Euro zone debt crisis and possible double-dip recession to one side though. I am interested in what effect another round of economic belt-tightening may have on HR practitioners? Will companies, for example, stop investing employees if the economic situation worsens?

A recent CIPD study suggests this may not be the case. Seven in 10 employers report that spending on coaching has either increased or stayed the same since the last recession. And this comes during a period where budgets for HR have remained very tight. So what conclusions can we draw?

It is encouraging that learning and development is being prioritised by business leaders. Nobody can be sure what the immediate future holds for the economy. But what is sure is that companies, by investing in employees, can help better prepare themselves.

Of course this doesn’t mean blindly spending on endless learning and development initiatives. Companies should identify their talent and prioritise developing top performers. Set in place plans to nuture, develop, engage and retain them. By doing so, they can build from within.

According to studies, the UK still lags behind the US in the effectiveness of performance management processes. This is something we must address. But how?

Evaluating performance management processes in use is the most obvious starting point. ETS research featuring 400,000 UK workers shows that a third of employees are dissatisfied with the performance management process. Line managers are similarly frustrated too.

Adopting an automated performance management system can really help simplify the process. It can give clarity on appraisals – showing how individual goals support wider corporate objectives. The appraisal process can be enhanced by cascading goals, identifying career plans and showing the relationship between pay and performance. And all parties stand to benefit.

Even if an automated performance management process isn’t right for your organisation. Just reviewing existing performance appraisal processes can be a useful exercise.

ETS benchmark data shows that dissatisfaction with appraisals among UK workers is decreasing. This suggests UK companies are taking action to improve performance management processes. Businesses must continue to do so to ensure they retain top performers and drive performance growth.

One of the biggest challenges facing companies in the next decade is the shortage of talented workers. Post-recession, the so-called‘war for talent’ is well and truly on. Companies are battling both to retain their best talent and are also struggling to fill skilled vacancies. A CIPD study found that managerial, professional and technical posts were proving the toughest to fill.

Employers must act now to address this situation. Clearly there’s no quick-fix solution. There is likely to be a number of fundamental issues behind the skills shortage. But there are a number of actions companies can take to best prepare themselves:

Other steps companies are taking to counter the problem include taking on more intern workers and even sponsoring students through university. But the above list of suggestions must be the starting point for companies, the minimum requirement. These steps are pre-requisites for medium and large companies to remain competitive.

Despite being a well established tool in the corporate world, questions persist about 360-degree feedback. Should it form part of performance appraisals or be used purely as an employee development tool? Or can it be both, and more? What is its best use?

It seems the 360's versatility may be both its strength and its weakness. And to further confuse matters, we're seeing new trends of how 360s are used. It’s clear that the 360 has evolved from being simply a development tool.

a href="http://www.etsplc.com/360-degree-feedback-review.aspx"> ETS research of 100 senior HR practitioners from blue-chip companies revealed 25% use 360s as part of the appraisal process. Further insights show companies we work with use 360s to:

In truth there's no single answer to the question about the best use of 360s. It will differ by company and careful consideration needs to be made to critical broader organisational issues such as the maturity of the feedback culture. But it can certainly add value for companies if used in the right ways.

Companies implementing 360-degree feedback programmes must be transparent with employees about its purpose and what are results to be used for. Don't link 360s to pay-related decisions immediately; you must first embed the process for 12-18 months. And ensure you have senior management buy-in otherwise adoption elsewhere may be low.

360-degree programmes are versatile and insightful and are increasingly being used to inform broader people strategies. For example results can inform decisions around workforce planning and targeted training and development initiatives. Just pinpoint what its best uses are for your company, ensure clear communication with users and implement a programme that fits your unique organisational needs.

More and more organisations are experiencing the business benefits from automating their performance management system, according to a recent white paper by ETS. This original HR insight paper makes a robust business case for automating performance and talent management process. This paper will be of interest to HR professionals who are currently implementing such as system as well as those who have yet to implement such as system.

Automatic for the people: why automating performance and talent management is an organisational imperative. A bespoke approach to online performance management allows HR professionals to match needs and goals of an organisation, thus creating a competitive advantage.

Some of the topics that are covered in this document include:

To summarise, this paper argues how an effective automated performance management solution provides organisations with the tools to get the most from fundamental business functions.

A new original insight report by ETS looks at how HR professionals typically replicate 'best practice' processes, based on accepted industry thinking when tasked with implementing a new HR solution.

What's wrong with that? While traditionally, this approach has been effective for HR professionals, I argue that so-called 'best practice' may not be the best suited solution for organisations.

This paper shows a different approach: HR professionals can be more successful if they shape and deploy bespoke HR practices and technology that are the 'best fit' for their organisation.

In short, this paper outlines a practical overview of why and how HR departments should create distinctive and more successful initiatives.

It’s rare to hear something that challenges the fundamentals of our work as business psychologists. A talk I attended at the Division of Occupational Psychology Conference did just that.

Let me take individual development planning as the example. How effective are we at driving forward business performance improvements? Is this the right approach?

Well, it’s commonly accepted that context and environment influence behaviour. What’s less clear is exactly how this happens.

The conference highlighted research by behavioural genetics which suggests that genetics have the far bigger impact. This makes me question whether our ‘developmental’ approach can ever drive sustained behavioural change. I ask myself - should we be trying to change individuals to fit roles or adapt roles to reflect common behavioural preferences and human trends?

How realistic is it for people to become more ‘planned and organised’ and ‘flexible’? Why don’t we define roles around individual’s strengths?

I don’t have complete answers to these questions. But, by continuing to question our own theories and methods, we’ll be sure to drive performance more effectively.

Performance management: post-recession review is an in-depth analysis of private sector employees’ views based on the ETS Employee Benchmark Database. The data is enriched with insights from ETS Business Psychologists.

The report focuses on three industries – Leisure, Professional Services and Manufacturing - that have undergone significant changes during and after the global economic downturn.

The review found that employees’ views are changing in the post-recession era: