Employees are a company’s most valuable resource and their biggest expense. You must ensure your workforce is performing to expectations to achieve a profitable bottom line. Small and mid-sized organizations in particular focus on driving performance. With fewer resources available than larger firms, especially in terms of finances and physical infrastructure, small and mid-sized companies must optimize the resources they do have to effectively drive productivity. Research shows companies that link employee objectives to company strategy perform better on a company and individual level. Yet, HBR research indicates only 29% of employees understand their company’s strategy.
The Importance of Aligned Objectives
We’ll cover the following key topics below:
- The advantages of aligning goals on a short- and long-term basis
- Best practices for OKRs (Objectives and Key Results) or SMART goal setting
- How to leverage technology to accelerate your results
Making the Case for Aligned Objectives
Setting objectives impacts your organizational performance and results. Companies with clear, aligned objectives attain better financial outcomes. Weaker firms perform poorer because they lack correlation between employee efforts and company objectives. Employees at these organizations thus lack clarity in terms of what’s expected of them in their roles. This leads to lack of focus, and ultimately, lower productivity.
It’s therefore essential that you not only set clear objectives for employees, but ensure that these objectives are linked to both short- and long-term priorities. Only then will your teams have the clarity they need to excel.
3 Advantages of Setting Clear, Aligned Objectives
Teams that understand their objectives and how they support company goals become more focused and engaged. The visibility into how their contributions impact company achievement incites commitment among your employees. This commitment naturally encourages employees to become more effective in their roles. In turn, you wil achieve better business outcomes, including higher profitability.
To reap these benefits, your organization must:
- Set OKRs/SMART goals for departments and individuals to boost engagement
- Enhance visibility into how efforts support company goals at all levels
- Drive accountability by establishing clear links among aligned goals
- Set and re-clarify expectations through ongoing communication
Prompt, Effective Execution of Business Strategy
You will execute your company strategy more effectively when you connect employee objectives with company goals because alignment facilitates better resource allocation and eliminates redundancies. It also allows managers to become more effective in their roles because:
- Direct reports have a better understanding of what’s expected of them, including the responsibilities that each objective demands
- Aligned goals reduce inefficiencies and redundancies
- Teams become focused on the most important company priorities
Improved Employee Retention
Engaged employees are less likely to leave their companies. Gallup research shows that organizations with dissatisfied employees have higher rates of absences, lower productivity, and an employee turnover rate 51% greater than their competitors. Clear, aligned goals address these issues because they give employees a sense of ownership in the success of the company. Your employees are less likely to leave when they are invested in the success of your company. Also, setting and tracking clear objectives allows you to adopt an effective pay-for-performance strategy, which rewards your top performers fairly and thus drives retention.
How to Effectively Set Employee & Company Objectives
Effective objectives meet the needs of your company and its employees. At an organizational level, goals should support both short-term priorities and your long-term strategy. Employees, conversely, must have clearly-defined objectives to stay engaged.
To align goals in your company, executives must identify and communicate the company’s strategic objectives. Managers also need a platform through which they can achieve visibility into the objectives of other teams and departments. This eliminates repeated efforts and enable teams or groups of employees to share goals. Working towards the same objectives supports accountability and facilitates engagement. Shared business goals also allow managers of various departments to support each other’s interests.
After goals have been set on a company level, collaborate with your departments and direct reports to set objectives. Managers should consider each employee’s role when setting goals, and must clearly identify what’s expected for each goal and how it can be completed. To that end, Objectives and Key Results (OKRs) are a useful goal setting approach, as the Objective informs the “what,” and the Key Result informs the “how.” Additionally, all objectives should be set using the OKR criteria, (for example, your Key Results should use the SMART method: specific, measurable, aligned, relevant, and time-bound) explained below. This aligns employees and managers with an understanding of how the employee’s performance against the goal will be evaluated.
Use the SMART Criteria in Your KRs (Key Results) of Your OKRs
Use clear, precise language to write KRs. Consider:
- Who will be accountable for the achievement?
- What must be accomplished?
- Which requirements are involved?
Set metrics to help managers gauge progress against each objective. Sometimes, it will not be logical to incorporate a quantifier into an objective, in which case “complete” or “incomplete” should be used as metrics. However, in many cases, you can incorporate measurements such as “98% customer retention” or “20% win rate” to track progress on goals throughout the quarter.
Align all team, department, and individual OKRs with overall company goals, and aim for achievability. Setting some ambitious moonshots is acceptable – but if every objective seems impossible, your teams could become demotivated.
Clearly identify how objectives are relevant to employee’s roles as well as company priorities. In doing so, you will help employees stay invested in the success of their goals.
Indicate a time frame by which the objective must be completed. Many companies choose to use a quarterly time frame, as this gives the employee a 2-3 week grace period before achieving 10% of the objective each week.
How to Use Technology to Align Goals
Use a tool such as Atiim to set and track goal performance. Our 2-in-1 SaaS platform integrates enterprise goals management and ongoing performance management check-ins to keep you and your teams aligned. You can track goal progress and use the data you find to manage performance more effectively. By checking in with teams regularly, you will also clarify expectations and provide feedback to engage employees continuously and support sustained high performance.
Your goal setting software also gives employees visibility into their own performance, others’ performance, and how their objectives connect with top company goals. With a high level of visibility, teams stay focused on the most important company priorities to achieve results.
Why Implement Goals & Performance Management Technology?
Use goal setting software to effectively cascade and track the performance of business objectives. In doing so, you will:
Develop a powerful goal setting approach
Setting company objectives is challenging without an effective goal-setting process in place. With goals management software, features like goal hierarchy tools establish individual and departmental goals to align company priorities at all levels. Tools like range objectives allow you set maximum and minimum thresholds for a more agile approach to goal setting. You can also track goal progress with advanced reporting, dashboards, and notifications on at-risk goals.
Achieve company goals rapidly
When all teams’ efforts are contributing towards the same shared company goals, you will achieve goals more rapidly and ultimately execute your strategy with better success. Since employees understand expectations clearly, teams will save time by focusing on the objectives that support company goals. This is all a result of the visibility and accountability enforced through an effective goal setting system.
Improve company-wide collaboration
Interdepartmental collaboration improves with aligned goals, as everyone’s combined efforts support company priorities. Aligned goals naturally facilitate a performance-driven culture in which there is accountability for goal progress. When everyone is working towards the same priorities, shared goals become more attainable. Moreover, goals management software simplifies the cascading process to effectively set shared goals.
Link employee appraisals to goal performance
Employees need clear, ongoing feedback to perform well. Many managers perform employee evaluations based on their memories alone, leading to biased reviews and frustration among teams. Data-driven goals and performance management solutions, on the other hand, collect data on goal performance continuously and therefore give managers the tools they need to provide unbiased, accurate reviews.
Goals management software also lets you exchange performance-related feedback with direct reports on an ongoing basis to support more concise and effective reviews.
Use performance data to your advantage
Many companies with paper-based systems fail to effectively track the performance of employee objectives on an ongoing basis. This makes it difficult to identify standout performance, and it also reduces visibility into overall company performance. With goals software, managers can use data to:
- Monitor company goal performance
- Identify weaknesses, top performers, and emerging trends to make informed reward decisions
- Pinpoint issues such as competency gaps or areas needing improvement
- Track employee ratings
Develop & sustain an ongoing feedback loop
Data-driven management solutions give managers information to provide targeted, actionable feedback to improve team performance. You can then effectively coach employees on key competencies by providing praise and constructive feedback on recent performance. Employees will know exactly what they must do to improve performance and become more effective in their roles.
Improve your bottom line
Lastly, automated goals and performance management software yields significant profits for your company, helping you to drastically improve your bottom line through improved productivity, lower turnover, and optimized approaches to compensation. Here are just a few ways these tools improve your bottom line:
- Align employee objectives with company goals
- Improve employee engagement
- Drive accountability with better visibility into goal performance
- Create a more effective performance review process
Take a Strategic Approach to Compensation
- Reward your best performers appropriately
- Develop a strategic pay-for-performance approach to compensation
- Use meaningful, actionable feedback to engage employees
- Pinpoint teams’ development needs
- Adjust compensation fairly and equitably
Best Practices for Selecting an Automated Goals & Performance Management System
Each automated goals and performance management system is unique. While the right solution for your company ultimately depends on your specific needs, a solution with the following capabilities will provide the greatest benefits:
- Tools to align, track, and cascade objectives
- Automated reminders for goals and performance reviews
- Features like feedback loops to help managers become better coaches
- Convenient dashboards to show performance on individual and company levels
- Online paperless processes with mobile capabilities
Select a system that boasts easy implementation so that you can begin experiencing the benefits of your new solution as early as possible. Web-based solutions require less of a time and cost investment than packaged software. Finally, seek out a vendor with expertise in goals and performance management best practices to help you effectively implement their solution in your organization.
Align Your Teams With Your Company Strategy Through Atiim’s Goals and Performance Management Solutions
With Atiim’s innovative and groundbreaking SaaS platform, you can achieve both effective enterprise goals management and ongoing performance management through closed-loop feedback in one convenient system. Atiim’s solutions link your teams’ objectives with your overall company strategy so that everyone has a clear sense of direction.
Key Features of Attim’s Goals and Performance Management Solutions
- Clear Align & True Goal Hierarchy helps you set OKRs with KRs that follow SMART criteria to fully align everyone at the company, team, and individual level
- Pulse Check-Ins support continuous two-way feedback loops so managers and their teams achieve ongoing communication, alignment, and transparency
- Anonymous Surveys with features like Employee Satisfaction Indexes give managers clear insights on the status of their teams
- Powerful Reporting & Analytics provide real-time insights into company performance
Atiim is a web-based solution and therefore doesn’t require any intensive IT support. Instead, managers can simply log in to the platform using any device, including tablets and mobile phones. Atiim’s innovative solutions are therefore available at your managers’ fingertips to keep teams’ efforts aligned with company goals, support high performance, and ultimately, maximize company results.
Do you manage a company or teams (either as a CEO, a senior executive, a middle manager or even a front-line manager)? Do you set and track objectives? Does aligning employee performance to business goals matter, and are you responsible for driving results? If so, please check out a live demo of Atiim OKR & Goals Management Software and we’d love to hear what you think about it. Thank you!