Citing a Conference Board report, an article on the World at Work website tackles the topic of whether or not risk assessment and organizational performance management should be more tightly integrated. 

Employee performance management has a role to play in this process. The more employees are engaged in a discussion about how their individual performance contributes to organizational performance; the clearer all members of an organization will be about potential risks—both internal and external.

In a Corporate Compliance Insights article, authors Beran, Polarinakis and Moore recommend that leaders take action by “Defining the business owner(s) for the risks. Linking the key controls in place to mitigate each risk. Identifying the monitoring processes in place to help ensure the key controls are operating as stated.” These responsibilities should then be reflected in the performance appraisal and performance review process.

The current business environment has put risk management at the forefront of everyone’s mind. CFO Magazine reports that many organizations are looking to improve their risk assessment processes, yet  also reports “some CFOs caution that formal enterprise risk management (ERM) programs won't succeed if they don't mesh well with a company's culture.” If risk avoidance is communicated and reinforced throughout the performance management process, then it is more likely to become part of the organizational culture.

The question becomes, how tightly is risk assessment and performance management integrated at your organization?


References:

Beran, Denny, John Polarinakis and Debra Moore. “Managing Corporate Risk Through Consistent, Effective Risk Assessment.” Corporate Compliance Insights [www.corporatecomplianceinsights.com]. April 29, 2009.

Plourd, Kate. “Rethinking Risk.” CFO Magazine [www.cfo.com]. January 1, 2009.

World at Work. Risk Assessment Data Significantly Contributes to Strategic Planning [www.worldatwork.org]. September 16, 2009.