Performance Management: Can our company's vision and values be reflected in our performance management system?

Yes. A top-down performance goal process is an effective way to tie individual performance to the vision and values of the organization, connecting each employee’s daily activities with the organizational objectives. The organization then measures employee performance based on these objectives. This process results in company, team and individual goals for each employee that directly align their efforts with the corporate objectives and values.

To demonstrate how this would work in practice, general steps are outlined below.

First, the executive team communicates overall strategic objectives and defines the organization’s shared value objectives. The executive team also establishes companywide performance goals based on these strategic objectives and value statements.

For example, if an organization’s vision or value statement includes achieving high performance or employee development, then a companywide goal may require employees to obtain some form of professional development (PD). Each employee could be required to work with his or her supervisor to develop an individualized PD goal. PD could be attending a job-related seminar, participating in a webcast, cross-training in a different department, or working toward a certification, undergraduate or graduate degree. To emphasize the importance of achieving this goal, the organization may consider having all supervisors and managers responsible for their own PD goals and for facilitating the achievement of their staff’s PD (i.e., providing the appropriate tools, time and budget).

Next, the chief executive officer works with each direct report to develop group and individual goals for the executive team members, aligning the goals with the set strategic objectives and value statements. Then the executive team members meet with their staff members in the same manner to develop team and individual goals at their staff’s level. This process continues for each level of the organization.

For example, a strategic objective for an organization may include expanding into one or more foreign countries. Each division of the organization may have a different role in meeting this objective. Sales and marketing clearly have integral roles in the completion of this task, and so will many other departments. Finance may need to become familiar with the exchange rates of the local currency and how these rates integrate into the organization’s accounting system. Several employees within finance need to coordinate efforts to complete this task. Shipping may need to look into proper shipping procedures for each new country. IT may need to find new technology to help support international communications/sales/needs. Human resources may need to look into international assignment relocation or international recruiting, compensation and benefits.

As department goals are set, individual employee performance goals tie back to the originating objective.

How this approach may affect a compensation specialist offers an example. The CEO establishes the foreign market objective, the chief human resource officer determines overall HR objectives, the compensation director develops comp team objectives, and the compensation specialist is assigned specific performance expectations based on his or her area of expertise. The compensation specialist may be tasked with researching international salary data for one or more foreign countries. This employee is not able to tie a performance goal back to the overall organizational goal of a foreign market objective and to establish why his or her daily work is so important to the organization.

Through this goal development process, each division, function and position reviews each value statement and strategic objective to determine where its function is affected. Some strategic objectives may not touch every department or employee, but trying to establish a direct connection between employee and most strategic objectives can allow employees to take ownership of their roles as strategic players within organizations.