How to Set and Cascade Objectives in Your Performance Management Process

March 26, 2013 - 6 minute read - Posted by

In my previous blog, I talked about integrating your core values into your performance management process. Another area of performance management is to determine your employees’ objectives/goals as a measure of performance in your organization. In this blog, I will discuss two goal alignment models – people-centric and organization-centric, why organization-centric model is considered as the best practice, and how to align your employees’ objectives to those of the organization.

Traditionally, people-centric alignment model was the most commonly used objective setting method. It follows a top-down model where the objectives are first created by the founder/CEO, and then supervisors will link their objectives to the CEO’s goals. Subsequently, the process repeats cascades down to the entire organizational structure until each individual contributes to the objectives of their managers. An article by an Enterprise Productivity Magazine, explains that adopting a people-centric alignment model takes too long as each level of the organization cannot develop their objectives until the higher level develops theirs. Another key disadvantage with this approach is that employees are restricted to the objectives of their managers. We talked about evolving performance management process towards being more employee-driven in the previous blog, and unfortunately, people-centric model takes away the empowerment of employees to create their own objectives and have autonomy.

On the other hand, an organization-centric alignment focuses on setting the objectives for the company first, and then these objectives are broken down across the organizational hierarchy and teams. The end result is employees creating objectives that are linked to the overall organizational objectives. The main advantage of this approach is outlined in this article from Knowledge Infusion, a consulting authority on Human Capital Management technology; any individual across the organization regardless of their departments can contribute to a single organization’s objective. Organization-centric approach encourages a more transparent “line of sight” where your employees have a greater visibility on how they are contributing to your organization’s success. Employees want to know that they are participating into achieving your organization’s objectives. It enhances their identity to the company and creates a tighter cohesion organization-wide.

Knowledge Infusion outlines key steps to help HR leaders and managers implement the alignment of your employees’ goals with those of your organization. I have added more details to each of the steps.

    1. Identify your company’s strategy and then develop the objectives that will help you achieve your overall strategy.  Educate your business leaders on why you believe those objectives are important because they are the people who are responsible to communicate your vision to your entire organization. You can benefit from making your goals public to your organization.
    2. Build cascading organizational objectives by mapping them across the organizational structure and teams. You want to clearly identify the objectives for each team and how they relate to the overall strategy of your company.
    3. Cascade goals in performance management system by clearly outlining the responsibilities of each business unit and teams. You want to make sure that teams have the competencies and resources required to achieve their goals. Employees in each team can link their behaviours to the goals.
    4. Build aligned employee goal plans using the SMART model. It is a very important step to coach your employees on setting their objectives as it is a great opportunity for you to identify any gap in competencies; then you can provide support in the form of coaching or more in-depth training in order to set your employees up for success. Make this step visible to the whole organization as you want to fully demonstrate how individual goals are contributing to the overall organization’s objectives.
    5. Communicate progress by updating your organization on how well each objective is doing. Encourage your managers to take a proactive role in helping your employees achieve their goals. If one employee is struggling, you can help identify the root causes and even re-align the goals along with the employee. One thing to keep in mind is that objectives are constantly changing, and you should not wait for an annual audit to re-align your objectives.
    6. Tie your employees’ success at achieving their individual goal with recognition. You want to positively reinforce their behaviours but more importantly, show appreciation for their contribution.

By aligning your employees’ objectives to your company’s objectives, you are empowering your employees to take ownership of the business as they are held accountable for their individual objectives. By creating a clear “line of sight” for your employees, they are more likely to be connected to your organizations and more engaged as they can see how their contributions relate to the bigger picture vision.

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