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Talent Management

How to Set and Cascade Objectives in Your Performance Management Process

One Minute Takeaway

  • Measuring employee performances is easier when you set measurable goals
  • An organization-centric model helps promote mission alignment
  • We explain why the SMART model helps you choose better objectives

When performance review time rolls around (all too rarely, in many companies), you’re really looking to answer one question: is this employee a good fit for this company? To answer this, managers are often forced to rely on gut feeling. What they need is a way to measure performance. It’s a company’s job to provide this: by defining core values and implementing a goal-setting methodology, managers will have metrics by which to judge how employee performance aligns with overall company strategy.

Traditionally, companies have had goal-setting models best described as people-centric. We love employee-oriented performance management, but when it comes to objectives, organization-centric models are the way to go. Confused? We’ll explain.

Battle of the Alignment Models

In a people-oriented model, the people that count are at the very top of the company. That’s typically the CEO, whose goals set the tone for those below. Supervisors link their goals to the CEOs and the process cascades down through the entire organization, with each employee’s goals linked to their manager’s objectives.

The problem is, this simply takes too long. Every employee must wait for their supervisor to set their own goals, and in a big enough company that’s takes a lot of time. Worse, this model restricts employee objectives by limiting their autonomy and forcing them to align completely with their manager’s goals.

Organization-Centric Alignment

The organization-centric model allows for easier alignment in less time. Objectives are decided for the organization as a whole and cascade down to departments and then individual teams. Any individual across the organization, regardless of department, can contribute to an organization objective. This works well for a few different reasons. It’s simpler and less likely to result in planning-stage bottlenecks. But it’s also great for engagement. Employees have more “line of sight” into how they contribute to the company as a whole. When employees understand how much difference their day-to-day effort makes, they’ll go from strength to strength. When your whole workforce feels the same, you can expect tighter cohesion and a supercharged company culture.

How to Implement Goal Alignment

Choosing the right alignment model is just the start of a structured talent development program. Here’s what to do next:

  1. First, identify your company strategy
    Everything starts with overall strategy—all other objectives will follow this. Educate your business leaders and managers on why you believe objectives are important. They are the ones who’ll be communicating your vision to the entire organization.

  2. Build cascading objectives
    Map out how objectives will cascade across the organizational structure. You want to clearly identify the objectives for each team, and how they relate to overall strategy.

  3. Integrate these goals into your performance management system
    This is how you ensure accountability. Clearly outline the responsibilities of each business unit and team and make sure they have the competencies and resources required to achieve their goals. Employees’ actions and behavior should be judged according to these objectives.

  4. Use the SMART model
    It’s important to coach employees on how to set objectives. If they are uncertain, offer coaching. Goals should always be Specific, Measurable, Achievable, Relevant and Time-Bound.

  5. Communicate progress
    Update your organization regularly on how well each objective is doing. Encourage managers to take a proactive role helping employees achieve their goals. If one employee is struggling, you can help identify the root causes and even re-align goals.

  6. Tie goals with recognition
    When employees meet their goals, they should be rewarded and recognized. It’s about positive reinforcement but more importantly it shows appreciation for their contribution.

How Paycor Helps

Paycor builds HR solutions for leaders. With Paycor, you can modernize every aspect of people management, from the way you recruit, onboard and develop your team, to the way you pay and retain them. See how Paycor can help the leaders of your organization solve the problems of today and tomorrow.