October 10th, 2024 – By Rebecca Taylor, CCO and Co-founder of SkillCycle
Setting clear and achievable employee goals is foundational to driving productivity and motivation in any organization. However, leaders should also ensure employee performance goals are tied to broader company objectives for the greatest success.
Why does this connection matter? When team members’ goals are aligned with both organizational and individual needs, employee performance increases by up to 22%, according to Gartner.
Aligning objectives helps individuals and teams understand their contribution to a larger initiative or company goal. Making this connection encourages your entire team to work together to bring the organization’s long-term vision to life.
To better understand the importance of aligning company and employee goals, let’s explore:
Also called “cascading” goals, alignment in employee goal setting typically follows a standard process. Leadership should break down company-wide goals into smaller ones for managers and their team members, right?
It seems obvious, but it’s not always put into practice. Only 29% of HR leaders say their strategic planning process fully integrates with the organization’s planning process, according to Gartner. Creating alignment must start at the top to ensure everyone works toward the same outcomes.
The key is to strike a balance between efficiently sharing the company’s goals and dedicating time to get alignment and feedback from employees. In fact, involving employees in goal-setting conversations should be a regular occurrence. Doing so can help them connect to the organization’s larger vision and give them a higher purpose.
McKinsey research has shown that 70% of employees surveyed say their work defines their sense of purpose. That purpose is also the leading driver of their performance and productivity.
Timing is critical in employee goal setting, too. If you set company-wide goals at the beginning of the year, you should communicate new initiatives and goals effectively throughout the year. Employees must understand why specific goals are important and how their work contributes to these objectives at all times.
Individual employee goals can significantly enhance organizational success when aligned with the company’s broader objectives. This approach ensures everyone is focused on a shared target, making it clear how individual achievements contribute to the organization’s success.
Contribution comes in different forms. Examples of employee goals might include sales numbers, efficiency targets, or customer satisfaction scores. These metrics are often used by leadership to evaluate performance.
For example, in a sales environment aiming to increase revenue by a certain amount, employees’ specific quotas can directly link their performance to overall financial goals. Similarly, in product development, team members’ tasks should connect to bigger goals like boosting customer retention, so their efforts support company objectives.
However, a broader lens helps show that other examples of employee goals such as skill development, collaboration, or innovation can drive significant impact as well. Tools that help organizations assess and reward progress toward these goals can be highly valuable.
Ideally, aligning your employees’ goals to your company’s long-term objectives will result in achieving these larger organizational goals. Success may simply look like goal achievement.
However, there are other signs, such as fostering a strong culture of transparency and development. When a company is on track with both, there’s a natural path to performance.
Another measurement of success can be the growth of skills in each employee and across your entire workforce. Progress in these areas can help leaders tie investments in employee learning and skill-building opportunities to employee achievements and desired business outcomes.
Most employees welcome the opportunity to grow and develop in their roles and may even leave their jobs if they don’t get it. Yet, according to Gallup, only 32% of employees surveyed feel they have opportunities to learn and grow at work.
To measure the effectiveness of how your organization sets and works toward goals as a team, look instead to how often employees ask for help and if they’re comfortable raising concerns. It should be a common occurrence for your managers and employees to have conversations around identifying roadblocks and resources needed.
Let’s dig into the idea of alignment a bit more. Your aim should be to effectively translate high-level organizational goals into measurable, achievable individual objectives.
Here are three key steps to create more goal alignment in your company.
The first key factor is clear communication. Employees need to fully understand what the company is aiming to achieve and how their individual roles contribute to those broader goals.
Setting performance goals as a team rather than through a top-down approach helps align individual efforts with the company’s strategy. This collaborative process fosters a sense of ownership and connection to the objectives, ensuring that employees feel invested in contributing to the company’s success.
The second critical factor is motivation and accountability, driven by a sense of buy-in and supported by appropriate rewards. Employees must feel incentivized to prioritize the organization’s goals over other personal or professional interests.
This alignment is strengthened when companies provide recognition and meaningful rewards — financial or not — tied directly to goal achievement. When employees know that their efforts will be rewarded, they are more likely to stay focused and committed to meeting overall strategic objectives.
A specific goal offered by leadership can still give employees plenty of leeway to define their ownership of that goal. However, it should always be grounded in moving the needle on larger objectives the company is working toward.
In the absence of clarity, individuals may create their own definition of success, and that may or may not ultimately be what the company needs.
For the most significant impact, your organizational goals should inform the goals set for employees and connect to how you support, develop, and evaluate their performance regularly throughout the year. Shifting from annual performance reviews to a continual feedback cycle can help make sure goals are relevant and allow employees to gain the skills needed to meet them.
As a leader, you never want to be surprised by poor results that stem from employees lacking support in their work. Creating space for honest communication makes it easier for team members to ask for help or share their struggles with their managers. A culture that fosters open dialogue and welcomes employee input naturally creates higher employee engagement and commitment to goals.
A lack of communication is one of the most significant ways companies mismanage employee goal-setting. If your team members don’t understand why working toward a goal is meaningful, how can they be motivated to offer their best work?
In some companies, leadership hands down goals without any opportunity for dialogue and understanding. If that communication doesn’t happen, it’s the first chance for things to go awry.
A second goal-setting risk is overcomplicating what will be measured and how. Too many key performance indicators and metrics to manage, especially when stored in different systems, may simply create more administrative burdens. Goals should be easy to understand, remember, and measure along the way to achievement.
Instead of spending the bulk of your time pulling together data and integrating it into endless reporting, try prioritizing problem-solving, discussions, and engagement around progress toward goals. This approach strengthens connection and trust with your team, and will likely show results more quickly.
Last, leaders should be mindful of how quickly things change in the organization and adjust objectives along with these shifts. Employees shouldn’t sit down once a year to review progress toward goals that no longer relate to the company’s needs or current responsibilities.
If you cancel a project or move up a product launch, your leaders should discuss these changes with employees and adjust their goals as needed. That way, team members can apply feedback and adapt their daily work, and you can reduce or eliminate obstacles in real-time to aid progress.
Change isn’t just a reality for organizations. Industries, markets, and the entire global workforce have changed significantly in recent years. Job descriptions and responsibilities may need to shift to keep pace. Adjusting goals can help ensure your employees understand expectations and have the ability to adapt successfully.
Performance metrics can help align employee performance goals with organizational objectives, but only if they’re used properly. When metrics clearly connect to employees’ goals, they can serve as a guide, showing progress and areas for improvement.
However, if metrics are the only focus and overshadow the actual goals, they can hinder alignment. Remember that performance metrics reflect behaviors, not the underlying reasons behind them.
If the metrics aren’t moving in the right direction, the focus can become about blame rather than understanding what’s happening. That’s where things can go off track. Instead of just talking about the numbers, it’s crucial to have conversations around the goals and support employees in navigating challenges.
When performance metrics are seen as a way to encourage growth — like discussing what didn’t work and how to improve — everyone benefits. It creates a supportive environment where employees feel empowered rather than defensive, allowing for open dialogue about achieving success together.
Change is a constant, and organizations need to stay flexible with their goals to keep up. Committing to your objectives, but not being so tied to them that you can’t adjust when necessary, is essential.
Sometimes, goals set a few months ago may no longer align with the current market needs. An open leadership culture that embraces feedback and acknowledges when a goal isn’t working is crucial for making those adjustments.
For ongoing alignment, leadership teams should regularly evaluate whether their goals still reflect the organization’s direction. This means keeping an eye on customer feedback, market trends, and buyer behavior. By focusing on key metrics that indicate how well you’re moving toward your objectives, you can more easily identify when a pivot is needed.
Ultimately, aligning all individual goals around a shared overarching goal creates a clear pathway. If something isn’t working, you can dig into where the breakdown is happening — whether it’s in product development, sales, or marketing — and make the necessary adjustments to stay on track.
Are your company and employee goals in alignment? We can help you get clear on the path to success across your organization. Book a demo to learn more.
SkillCycle formerly known as GoCoach featured in Forbes
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