The Importance of Aligning Individual Performance with Company Goals
Joe Kolinger, CTO OfficeWork Software
Having great workers is not enough; their performance needs to be connected to the company’s goals.
Fundamental to business success is the clarity and viability of the business’ goals. For example a business has goals for profitability, production, growth, market share and customer service.
Contrast two iconic companies, Sears and Nordstrom’s. Clearly, customer service is a key differentiator. Nordstrom management does a vastly better job of selecting personnel and then training and empowering them to engage its customer service mission. They demonstrate the importance of aligning individual workers with the corporate mission.
Like Sears, most organizations that I work with pay a lot of attention to the individual employee’s performance evaluation, but very little to the relationship between individual performance and organizational results. That’s why you will see a business full of “star performers” which is, itself, mediocre, despite all the “stars.” It’s as if they pay for effort and not accomplishment.
It’s management’s job to ensure that the workforce is engaged to accomplish the corporate goals. Quality, skilled workers must be hired, but beyond this they need goals that clearly support the business’ goals. Properly understood, individual performance is only valuable in as much as it contributes to company goals. This is management’s ‘alignment’ task: ensuring individual performers are focused on those deliverables that take the company to its desired destination. This is a difficult job, because naturally everyone drifts into their own particular bias.
The diagram below shows how internal and external support systems should be designed and focused to engender individual and team performance that fully supports whatever the organization’s goals are.
This is another way of viewing ‘tactics’ in support of ‘strategy’.
Individual Performance Must Support Company Goals
Let’s explore this context diagram as it illustrates the interactions between organizational, team and individual dynamics.
1. Individual Performance – 71% of the people hired are an expensive mistake. Considering that this 71% of US workers are ‘disengaged’ or ‘actively disengaged’ (Gallup study, March 2013) the task of picking the right people has proven management to be mostly wrong. Furthermore, your ‘stars’ can’t necessarily make up for the many wrong hires. The financial, performance and morale cost to the organization can be staggering. From my experience the companies I have worked with have learned that it takes discipline and commitment to create a process to hire the right people. Resulting in an employee who is far more teachable and productive in the context of the company’s goals. When it comes to the performance of individuals, it’s accomplishment not effort that matters.
71% of employees are disengaged
2. Team Performance – Teams are essential and they need to know how they fit into the overall goals of the corporation. This requires management nurturing, training and ongoing investment. Individuals must learn to play in teams, and teams must learn to play well together. The better the teams work together the more individual employees will be engaged and the goals of the company met.
3. Business Goals – It all starts here. The organization exists for the sake of the business mission. Hence the objectives must be articulated in a way that everyone can ultimately understand and embrace. Design of the organization, selection of personnel, process, technology and systems are all implemented for the sake of fulfilling – in some way – the business’ mission, goals and objectives.
4. Support Systems, whether internal (IT, HR, Finance, etc.) or external (outsourced talent and systems) exist for supporting the people who address the business’ goals. Support systems that do not conform to this focus should be evaluated for change.
In summary, your employees’ performance must always align with the business’ goals. No matter how ‘excellent’ the workers, their contributions must be realized in the context of these bigger goals. Alignment is an ongoing process and discipline as new challenges – pretty much every day – demand re-focus on what matters most to your company’s success.
