PLEASE VISIT OUR SPONSORS

Performance Management

Published March 2009

Link Individual Performance to Organizational Goals

 

  Christopher Lee and Sean Conrad

Organizations that focus on harnessing individual potential are likely to be more competitive than their peers. Goal management can help organizations manage employee performance in a strategic, effective way.

The economy and the changing nature of work itself have given the importance of goal setting new life. Goals can help an organization and its employees focus on the most important and pressing priorities. The challenge is to ensure each employee is aware of and fully appreciates what must be done each day, and at specific intervals, for the organization to meet its goals. Developing a goal management process can focus employees and resources on producing better outcomes.

Creating Linkages

The best way to ensure individual employees' efforts have maximum impact on the bottom line is to link them to organizational goals. Such connections should be made deliberately, and the process can be designed in a way that virtually guarantees business success.

Using its mission as a starting point, a business defines a statement of intent or a vision. A strategy to achieve this vision follows. Business plans are then developed to execute the strategy, and different departments drive their operations according to their areas' functions. Once a department establishes its goals, the activities necessary to complete associated responsibilities are assigned to individual team members. These individuals are then free to establish their goals within the context of the organization's strategic objectives. The collective efforts of individuals and departments creates organizational success.

The linking process starts at the top and moves down the organizational structure to the individual. Individual goals and activities are then reported back up the organizational structure. The reporting structure gives executives a method to track and monitor the execution of business plans. In this model, everyone's efforts are harnessed and directed toward the most important organizational outcomes. Individuals know the importance of their efforts and how their work fits in with the work of others and the larger organization. If individual goals are made in isolation, tremendous effort might be spent doing work that is not most important or most pressing. This is why organization-centric goals are indispensible.

The San Diego Zoo has been using goal management as part of its talent management strategy for several years. Employees' and managers' goals are linked to five overall organizational goals so the Zoological Society's employees can see a clear connection between objectives that have been set for them and the organization's overall objectives. The zoo has taken goal alignment even further, as employees also understand how their achievements will translate into potentially greater compensation in its pay-for-performance compensation model.

Contemporary Goal Management

Traditional goal setting involves individuals seeking managerial approval for their self-defined goals as a part of their performance review. The goals were often activity-oriented, describing what the individual would attempt to do in the coming year. Traditional goal setting also emphasizes self-improvement and professional development activities, such as gaining new skills or attending conferences and workshops.