By Joy S. Ruhmann for Business Leader magazine, February 2007
Most business professionals are familiar with the acronym SMART: Specific, measurable, attainable, realistic and time-bound. In well-run organizations, they are individual annual goals designed to ensure that a company achieves its annual growth and income objectives. When everyone achieves their SMART goals, the company achieves its growth and income goals, creating a win-win situation for everyone.
Problems arise, though, when SMART goals are aligned with organizational goals but not governed by core values, which define expected standards of behavior for all employees. The situation worsens when individuals within an organization begin behaving in inappropriate ways in order to achieve their individual SMART goals, typically at the expense of their co-workers, customers or vendors. These inappropriate behaviors can have a negative impact on teamwork and relationships with customers and vendors—and ultimately the reputation of the company.
For example, have you ever been faced with an individual making a decision involving a customer sale or service opportunity where in order to achieve the numbers, he committed to something that he knew could not be delivered on time? How would that fit within your organization’s values? When this occurs, individuals are achieving their SMART goals at the expense of the organization.
Having clearly defined core values and holding each individual accountable to these values becomes the key to achieving SMART goals without impacting the integrity of an organization. Unfortunately, this piece often is missing from the performance-feedback process. Traditionally, performance feedback occurs once per year in the form of an annual performance appraisal, often dreaded by the manager charged with preparing the appraisal and the employee being reviewed. At their best, these annual appraisals are rear-ward focused, addressing only what’s been accomplished recently rather than throughout the performance period. They often don’t include an employee‘s behavior as defined by the organization’s core values.
With a fully integrated performance-management process, managers can proactively monitor, evaluate and reward individual performance and behavior that’s in line with an organization’s core values.
A fully integrated performance-management process begins with a clearly defined organizational strategy that includes a statement of the organization’s mission, vision and core values. The old adage remains the same: If you don’t know where you’re going, how can you possibly get there? The good news is that many organizations already have clearly defined strategic plans. The bad news is that it often is where they stop short.
After articulating the strategic direction of the company, many key managers return to the daily tactical activities of the organization and lose sight of the overall plan. The management team might take time to review the plan with key employees and might discuss the plan from time to time, but no real action is taken to ensure that the activities of all employees are aligned with the initiatives laid out in the plan.
With an effective performance-management process, managers can leverage the power of a company’s strategic plan by clearly aligning individual goals and objectives with corporate initiatives, ensuring that the daily activities of all employees are in support of the goals and values laid out in the plan. During the alignment process, if a manager discovers that an individual’s goals or responsibilities don’t support the plan, he or she can change the focus or plan.
Fully integrated performance management also must include a frequent, easy-to-use process for providing feedback on employee performance. Quarterly feedback meetings provide more opportunity for ensuring that tactical adjustments can be made before things fall off track. They also eliminate the need for an annual review. An effective performance-management process also must include a review of how each employee is living up to the core values of the organization.
Simply put, core values are the baseline through which employers and employees should measure all activities.
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