News from the stock market is dominating the news. Companies are bracing themselves for difficult times. Among a number of suggestions provided by Reuters.com writer Deborah Cohen in the article Tips for small businesses on surviving a recession, one relates directly to human capital. In addition to advising businesses to “get rid of” poor performers, Cohen recommends organizations implement a pay for performance structure and share profits with all employees. Yet, in order to effectively link pay and performance, solid alignment must exist (or be created) between business goals and employee goals.

According to the results of a 2007 BPM Forum and SuccessFactors survey of over 726 HR and performance professionals, a lack of alignment is widespread. For example, only 29% of respondents indicated that their organization had the ability to “link talent performance to business value creation.” Approximately half of the responding organizations were not able to “measure talent performance and productivity in terms of business value creation,” while only 28.6% were confident in their ability to do so.

A recent posting by a Performance Think Tank group member identifies lack of alignment as a concern. Furthermore, this group member poses the following question “Is there any process/methodology which tracks this dissonance/alignment or lack of it and helps improving it?” My experience has been that the use of performance management technology can help build alignment. A majority of performance management software solutions make organizational goals visible and allow managers, department heads and individuals to link their goals to the appropriate strategic objectives. Some systems and organizations also identify competencies to link goals and employee abilities even more closely. Once goals are entered into the system, executives are able to access dashboards that provide an organization-wide view of progress and gaps.

The BPM and SuccessFactors survey concludes that “talent management and measurement and scorecarding is critical and on the rise.” The survey also shows that while the majority of smaller businesses (80%) do not use talent management scorecards, organizations that have adopted TM scorecards are reaping benefits such as “reduced turnover, improved goal alignment, and better engaged and performing employees.”

The key to linking goals to strategic business objectives successfully, suggest Jeff Weekley and Jeff Labrador of Kenexa, is to “identify which KPIs a job impacts and then measure the ways by which it is expected to do so.” I am sure many of you have heard stories of goal setting gone wrong, such as sales targets which have resulted in employees negatively impacting service expectations. Recently, for example, I was buying lunch at a local sandwich shop. I wanted to buy only the chicken strips that went into a sandwich instead of the whole meal. Although I understand that there are reasons why the server told me that I could not buy only the chicken strips, I walked away without making a purchase. This makes me wonder what the restaurant owner would have thought of that transaction. Not only is it important that we identify goals, we must also consider how we want to achieve them and if individual goals could have any unintended, unwanted results.

How do you suggest that organizations can improve goal alignment?


Works Cited:

BPM Forum and SuccessFactors (2007). Performance and Talent Management Trends Survey 2007. BPM Forum and SuccessFactors.

Cohen, Deborah L. (2008). Tips for small businesses on surviving a recession. Reuters.

Weekley, Jeff and Jeff Labrador (2007). Making Performance Management Relevant. Kenexa.