Tying Performance Management to Company Goals

Tying Performance Management to Company Goals

Great Leaders know how to create a culture for teams to succeed. One aspect of that culture is learning how to effectively use data to enhance overall performance. Over the course of my past several blogs I have been stressing the importance of living and breathing data, using information to document impact, drive internal and external system change, and inspire donors.

David Ostberg, Director of People Science and Performance at Culture Amp, discusses goal setting in a recent article. He stresses the importance of clarity in goal setting and I could not agree more. He states “Clarity is the foundation of effective goal setting and it enables leaders to tie goals to employee performance. It’s necessary to be specific about the long and short-term objectives you expect your teams to achieve.”

In my experience the more specific the goals, the better the organization’s overall performance. As such it is critical to be specific about the following:

• What is the specific goal and how is it tied to organizational goals?

• What are the team member’s specific and delineated responsibilities to achieve the goals?

• Who else outside the team will contribute to success? How have they been engaged?

• What are the measurements of success company-wide and individually?

• How frequently will reporting occur? What is the framework for reporting? Is it understood? Are the reports structured so that they are easily understood? We are using green-yellow-red at The Fedcap Group to indicate goal achievement. One glance provides a great deal of information and drilling down into the reports tells a more granular story.

• How will we recognize progress and celebrate wins?

• What are the milestone dates we need to hit along the way?

When goals are clearly stated, and mechanisms for measurement are defined and commonly understood, it becomes much easier to assess employee performance by tailoring day-to-day work expectations to the goals. This process, called cascading goals, ensures that employees understand exactly what the organization is focused on and how their work contributes to the achievement of goals.

Aligning and managing company, team and individual goals achieves several critical things:

• Everyone understands where the company is headed and their role in its overall success.

• There is a greater willingness to hold one another accountable – as success and individual performance are interwoven.

• There is a transparency in the efforts and in the outcomes that levels the playing field.

• It makes it easier for leaders to assess strong performers and those who need additional support to succeed. It also makes it clear where there may be talent gaps in the team.

• It provides opportunities for authentic celebration.

Performance reviews that are aligned to company goals set the state for professional and personal development of all members of the organization. Everyone can see how they contribute to the whole and they can play an active role in ensuring that employees identify new knowledge, skills, and abilities to pursue and the learning resources needed to reach specific goals tied to organizational needs.

I welcome your thoughts!

The Performance Management Imperative

The Performance Management Imperative

Historically company performance review was an annual affair…review the numbers and, based on what you learned, chart the course for the next year. Sometimes the course had been corrected based on the numbers, but often not. Reputation often drove business success—as much, if not, more than performance.

As we know this is no longer an effective approach to leadership. The market changes too fast and companies need to both predict and respond to marketplace trends and rapidly course correct as indicated. We need to perform (at least) at the level required in the contract. More likely than not, if we are to stay competitive, we need to exceed contractual expectations.

According to a recent survey reported in NonprofitHR, “87 percent of global organizations said they had transformed their performance management approach in the last 18 months or intended to change it in the near future.” Organizations are moving to an emphasis on continuous, rigorous review of data, leveraging accessible and efficient financial and
programmatic platforms.

Today effective company leaders must be able to cite precise performance goals (financial and programmatic) and their status toward meeting targets by the day, month, quarter and year.

“Go deep with business performance monitoring…” advises Optimas Financial and Accounting Solutions. “It can be the difference between success or failure in this highly competitive marketplace”. Optimas cites benchmarking, a technique of comparing our business performance against competitors as a good way to gain insight into performance. Companies can use benchmarking to compare their performance to similar organizations working in the same sector, and within their own organizations by comparing performance with industry standards.

Rigorous performance management is essential to ensuring sustainability, relevance and impact—key pillars of the work of The Fedcap Group. Each year performance management becomes increasingly important and is the focus of our Corporate Weeks, Brown Bag Lunches and Leadership Academy. We are working hard to activate additional features of our financial, HR, fund-raising and business development software platforms—becoming increasingly data informed.

For monitoring financial performance, we have selected key measures such as revenue, cash, margin, A/R, % of budget expended, pipeline, billing, and contract maximization—developing both agency-wide and company specific dashboards. These dashboards focus our leaders on the right financial metrics—the metrics that we believe matter.

It is imperative to build the same kind of deep dive key performance indicators (metrics that
matter) in the areas of contract/regulatory compliance, program outcomes (to include our 5 Bold Goals I have discussed in past blogs), fund raising and new business development.

Critical to the long-term efficacy of building a data driven organization is our approach to employee performance. According to Sara Pollock in HR Daily Advisor the strategies for driving employee performance must include tightly linking company and programmatic goals to individual performance measurement. I believe that employees need to see the direct link between what they do every day and the overarching goals of the company. Tying their performance to organizational goals and outcomes means that they have a stake in the impact, they see how their role contributes to making a long-term impact. I plan to discuss this more in upcoming blogs.

As always, I welcome your thoughts.