Goal Setting & Alignment to Business Objectives

December 4, 2023
Goal Setting & Alignment to Business Objectives

We’ve compiled some of our extensive knowledge on performance management to create this informative guide to goals, goal setting, and aligning to business objectives. Read on to learn effective ways to support your employees career growth through proper goal creation and much more.

How to Effectively Set Goals With Your Direct Reports

As we ready ourselves for a new year, we know your employees have performance reviews, pay raises, and bonuses on their minds. Before you sit down with each of them, you’ll need to do two things. The first is to evaluate their performance over the past year, and the second is to consider a few priorities to focus on in the upcoming year. Both of those things depend upon concrete, measurable employee goals.

If you’ve already begun to set goals with your employees–perhaps at their last performance review–then you’ve got a good starting point. If not, it’s a good idea to begin this process before bonus season is upon us.

Why is goal-setting so important? It demonstrates to your staff that you prioritize their success. But more importantly, it gives each member of your team a clear set of priorities to focus on for the year. Your staff will know which tasks and projects are important to you and to their career growth so they can prioritize accordingly.

Moreover, if you’ve defined the metrics you’ll use to track progress after you set goals, each employee will go into their next performance review having a pretty good idea of where they stand. This removes a lot of uncertainty, which will boost team morale. It also allows you to set the bar high and create action items that will directly correlate to the success of your entire business.

So how do you work with your employees to set goals that will motivate the team, boost productivity and drive your business to success? Let’s dig in and look at some proven goal-setting strategies.

Getting Started with Goal-Setting

If you’re new to employee goal-setting, we recommend kicking things off at a team meeting. Let your entire staff know that you value each person’s contributions and that you want everyone’s input in order to accomplish the company’s goals in a way that advances everyone’s careers.

During this meeting, managers should reiterSo how do yate the company’s goals. What does your business aim to improve upon over the next year?

Next, have supervisors meeting individually with each employee to discuss their unique skills and the role they can plan in achieving company goals. And don’t forget to address your employees’ career objectives. Ask each team member, “What are your goals for this job?” Then strategize to help them set goals that will both advance their careers and achieve company-wide goals.

To accomplish this task, you will need to help your employees set three types of goals.

What Are the Three Types of Goals Your Employees Should Set?

Now it’s time to think about the upcoming year–and possibly beyond that. How will each employee contribute to your company’s goals, and how will their work advance their own careers? The answer lies in these three types of goals.

1. Time Goals

Time goals are usually referred to as short-term or long-term goals. Often, they are paired with short-term goals contributing to the accomplishment of a long-term goal. For example, you might have short-term goals of learning to swim, improving your running speed, and riding your bike daily. These would all contribute to the long-term goal of completing a triathlon.

2. Focus Goals

This will be the employee’s overarching goal for the year, and possibly beyond. It is usually a big but achievable goal, and all other goals should lead to it. For example, a focus goal for your social media manager might be to increase follower engagement on all social media channels by 10 percent. All other goals would flow from that, and the employee’s daily activities would focus heavily on boosting social engagement.

3. Topic Goals

These goals might be personal, professional, or financial. For example, your employees might want to complete a series of leadership training courses. Many employees will strive to earn a promotion or a pay raise. These are all topic goals.

SMART Goals

So far, we’ve discussed important aspects of the content of your employees’ goals. But the construction of these goals is equally important. The most widely accepted format to set goals that are useful and successful is the SMART goal plan. SMART is an acronym for:

Specific

All employee goals should be specific. This means that they clearly detail exactly what needs to happen, including the size, scope, and participants involved. It may help to also create incremental objectives, or milestones, to define progress toward the goal.

Measurable

What are the measurable goals and how do you pick them? For starters, measurable goals define objective units that you can count. This allows your employees to track their progress. For example, a salesperson for a health club may want to increase the number of memberships she sells by 10 percent.

Achievable

It’s a good thing to aim high. But if you aim so high that the goal is impossible to meet, then you’re setting yourself and your employees up for failure. A goal that will take a lot of hard work to achieve is great. Just be sure that it doesn’t also depend on luck, excessive hours or an unlikely set of circumstances.

Relevant

Remember when we said that you should start your goal-setting discussion by reiterating the company’s goals? That’s because each individual employee’s goals should either contribute to the mission of the organization or advance the employee’s personal goals.

Time-based

This one is simple. A time-based goal is one with a deadline. A stockbroker will increase his personal client base by 10 percent within three months. A physician will complete 50 CME credits within one year.

When applied to the entire list of employee goals, “time-based” can mean assigning priority levels to each goal so the employee knows which one she should complete first.

Employee goal-setting is an integral part of any manager’s job. Start today by planning your first goal-setting team meeting. Your staff will feel confident and energized knowing that their boss cares about their career success, and your business will benefit from a team of employees all working toward company-wide goals.

What Are Cascading Goals, and How Do They Improve Productivity?

Here’s how cascading goals can help align your employees’ work to your company’s overarching goals and ultimate success.

Cascading goal frameworks can boost employee productivity and engagement

You just announced a new set of long-range goals for making your small business more competitive, profitable, and mission oriented. Your executive team spent a year planning and finally communicating your organizational objectives to everyone in the company, only to find that the goals aren’t in sync with employees’ expectations. Ask what went wrong, and you’ll likely hear users of “cascading goal” systems blaming the problem on a failure to align your company’s goals with employees’ goals.

Setting cascading goals involves rolling out company-centered objectives from the executive suite to descending levels in the organization, while ensuring alignment with managers and employees’ goals. Although the cascading format is hierarchical, it takes a “we’re all in this together” approach to setting and meeting goals.

A variety of goal-setting models fall under the umbrella term “cascading goals.” These frameworks include V2MOMs (Vision, Values, Methods, Obstacles and Measurement), OKRs (Objectives and Key Results), BHAGs (Big Hairy Audacious Goals) and “The What’s and The How’s” model.” Each framework has its own set of criteria that small and medium-sized businesses can consider when adopting a company-wide goal-setting strategy.

Challenges of cascading goals

Although cascading goal frameworks can bring many benefits, executing them can be challenging. Data from The Economist Intelligence Unit (EIU) found that 61% of cascading strategies miss the mark, and that, on average, companies lose 40% of their strategic value because of implementation failures.

Shortfalls in carrying out cascading goals can derail the system’s core function — multilateral goal alignment. Employment experts like Liza Streiff, CEO of Knopman Marks Financial Training, a New York City-based firm, point to misaligned goals as a possible root cause of employee productivity and engagement problems.

Streiff told Workest that setting organizational goals is only effective when aligned with employees’ goals. “If you want to move your business in a certain direction, the entire organization must work in tandem,” Streiff commented. “When managers and/or leadership are not aligned, confusion can spread throughout an organization. A misalignment of goals can be unproductive, leaving both employees and managers frustrated.” She added that people naturally work towards their own objectives, which makes a company-wide strategy longer to execute.

A productivity boost

Goal achievement is a measure of performance, and when performance is tied to cascading goals, the result can be a boost in productivity. Cascading goal systems are more likely to raise productivity when the following management shifts occur.

Company goals link to employees’ goals

Employment experts generally agree that employees do their best work in environments that acknowledge and value everyone’s contribution. Companies can create positive work environments by using cascading goal systems that recognize and incorporate employees’ goals into organizational objectives.

A study by Mercer, an employee healthcare and investment consulting firm, shows that goal setting occurs mostly at the employee level. The firm found that 83% of global companies require individual goals, while just 56% require enterprise level goals. These results suggest that many managers and employees are setting individual or personal goals without a link to the company’s objectives. A cascading goal system could provide the missing link.

Reflektive, a performance management platform, recommends that all goal setting under the cascade system begin with the company’s overarching goal, which it defines as a reflection of the company’s mission. After that, all other goals — usually personal or developmental — can then connect to the overarching goal. According to Reflektive, goals that are misaligned with the overarching goals detract from a company’s mission, and that even goals that seem insignificant can increase employee satisfaction. This, in turn, can raise productivity.

Performance alignment replaces performance management

Traditional performance management strategies are losing their luster in the workplace. A growing number of companies are moving away from the often stressful, infrequent yearly meetings between managers and employees towards more collaborative monthly, even weekly, check ins.

A Deloitte study found that 58% of executives think performance management strategies don’t engage workers or bolster productivity, and thought leader Josh Bernsin estimates that 70% of global enterprises have shifted away from the performance management model.

Instead of performance management, companies can focus on performance alignment. A Zenefits report describes 5 essential qualities of performance alignment:

  • Is linked to a company’s goals and values.
  • Is adaptable and measurable.
  • Drives the intended action.
  • Is frequent and consistent.
  • Treats employees like adults.

Company goals include productivity improvements

Well-structured work environments encourage employees to find and implement ways to improve productivity, according to Deloitte. The professional services firm recommends that companies make productivity improvement an organizational goal and cascade that objective internally.

Employee engagement is intensified

Productivity is likely to increase when employees understand how their work contributes to the company’s overarching goals and ultimate success. According to a 2019 report, A Road Map to Success: Cascading Goals, cascading goals demonstrate that message by engaging employees in the goal-setting process.

The strategy for a meaningful cascading goal system

Having the right strategy is as much a part of an effective cascading goal system as aligning objectives. Employment experts generally agree that the first steps in adopting a cascading goal system include:

  • Establishing clear, strategic, and measurable executive-level goals.
  • Developing a process for rolling out the objectives.
  • Setting up a check-point system to ensure goals are linked throughout the company.
  • Establishing an incentive program tied to performance that fortifies the goals.

For Streiff, the strategy starts with a question: “What are the next 3 things we need to focus on this quarter or year to really move the needle?” Once her leadership team decides what to focus on, each member comes up with 3 ideas that align with the company’s objectives.

The leaders then go to their teams to make sure their goals ladder up to the company’s objectives. “This way, not only are the activities on track with the direction we’re driving the business in,” said Streiff, “but our team is also set up to win!”

How can trainers match employee career goals to organizational needs?

Employee training gives employees new skills for their own career development, while also serving the organization’s overall needs. Here are a few tips for designing a training program that benefits both your company’s and employees’ goals:

Set Clear Criteria

It’s important to set clear guidelines for what defines success, both for the individual employee as well as company-wide. Having the employee identify their specific career goals, alongside the overall goals of the organization, can help trainers integrate the two.

For example, if an employee’s goal is to have a high number of sales, and the organization’s goal is to increase revenue by 10%, trainers can clearly demonstrate how customer sales will directly increase the company’s bottom line. Combining the two aims can help motivate the employee because they’ll see that they work at a company that shares their goals.

Stick to the System

Trainers can optimize their team’s learning program by aligning it with their organization, including but not limited to:

  • lines of authority
  • values
  • policies
  • systems
  • other business practices

A comprehensive training program will enhance the likelihood that the employee gains knowledge and skills they can use in their current job as well as later in their career path with the organization.

Use a Variety of Channels

Use multiple channels to conduct training, such as:

  • classroom lectures
  • role-playing
  • e-learning
  • on-the-job practice

Variety in training helps meet an individual employee’s learning style, while giving them a look at different parts of the company, perhaps even identifying a future career path within the organization. This varied experience allows the employee to connect their training to specific career goals and also understand how their training fits in with the company’s needs.

Final tip for matching goals to organizational needs

Training doesn’t have to focus on only the organization’s or employee’s goals. By encouraging employees to identify their individual career goals, you’ll allow employees the opportunity to pursue their career path while also benefiting the company.

How to Align HR & Business Goals in 5 Steps

The ability to connect HR initiatives to larger business goals is the most critical skill for HR pros. Our 5 step guide show you how to make that happen.

What’s the most critical skill of an HR leader? Thorough knowledge of employee health benefits software? Strong culture ambassador? Superior conflict resolution skills? According to recent research, it’s the ability to connect HR initiatives to the strategic initiatives of the business. But how do you do align business goals with HR goals? We’ve outlined a five step process to help you cultivate the most in-demand HR skill and drive success for your business:

Step 1: Define success

In order to have a place at the decision-making table, HR must understand the business’s broad strategic goals and direction. If these aren’t clear to all parties involved, not only is it an obstacle for the business, but it’ll be difficult for HR to align and support those objectives. Consider asking key business stakeholders like your CFO, CEO, and other members of your C-suite some of the following questions:

  • “What are the organization’s key business KPI?”
  • “How can HR play a role in helping to drive those KPI?
  • “What’s the best way for HR to support the C-suite?”

The responses to those questions should arise clear directives for HR, such as:

  • Reduce cost
  • Increase productivity
  • Go green

Step 2: Align & set your HR goals

Once you’ve clearly defined success in your organization, it’s time to articulate the goals of HR. If this is your first time doing this, you might need to make an educated guess about what’ll be successful, and test that hypothesis to find out if you’re right. For example:

  • Reduce costs.
    • Decrease turnover/increase retention
    • Reduce vendor and/or labor costs
  • Increase productivity.
    • Evaluate the efficacy of your onboarding process
    • Automate admin work with software tools
  • Go green.
    • Organize volunteer opportunities
    • Go paperless and conserve

These HR hypotheses could be great ways to align with the specific business objectives of your C-suite. However, they remain abstract and nebulous—how exactly are you going to decrease turnover? Now is the time to test out some specific actions.

Step 3: Formulate specific actions to hit those goals

“We’re going to increase retention!” is a statement, not a plan of action. Without any strategy or way to measure it won’t give you true alignment (and it won’t prove what you’re doing is really working, either). Instead, create specific, targeted actions that actualize your objectives. For example:

  • Decrease turnover/increase retention
  • Create and distribute employee satisfaction surveys to take the temperature of your employees. Include questions like:
    • What’s the most difficult part of your job?
    • How can the company improve?
    • Rate your satisfaction with your compensation.

Use the data from this survey to implement specific retention-reducing tactics. For instance, if very few are satisfied with their compensation, you could talk to your C-suite about this pain point. If many people are saying that the culture needs to be improved, you could begin a culture club to address the issue.

Evaluate the efficacy of your onboarding process.

Also, include and inform new hires of structured milestones for the first few months to track and ensure onboarding is moving quickly and efficiently.

Step 4: Get everyone to buy in

In order to achieve true alignment, you need to get everyone at the table more than once. Once you’ve created your HR game plan complete with specific actions, that you return to your business leaders, get them involved and make sure they feel your plan truly aligns.

Step 5: Measure

Whether this is your first or fifteenth time aligning your HR goals with your business, it’s of the utmost importance to measure your progress. If you want to definitively demonstrate the ways in which your HR is supporting your business, you need to have the data to back it up. While this may seem obvious, only 25% of organizations have relevant HR data available to necessary stakeholders.

Here’s some examples of the type of measurement that can be helpful to stakeholders:

  • Employee satisfaction surveys. Conduct employee satisfaction surveys at set intervals (e.g., every quarter or year). Compare the surveys to previous ones in order to see if any progress was made and where.
  • Digitize onboarding paperwork. Compare time and cost for onboarding before and after digitizing to see where savings have been made.

Aligning HR goals and business goals doesn’t need to be an overwhelming task if you break it down into steps, set clear goals, and measure along the way. So, why aren’t more HR departments taking these steps?

According to Aberdeen, nearly half of organizations feel that HR is bogged down with administrative tasks. The reality is if HR professionals are too busy filling out paperwork, or answering benefits questions, they’ll never have the time to do the crucial tasks necessary for true alignment. Having one tool that decreases all of this repetitive work is an efficient and smart way to free your HR owner to focus on more strategic tasks. Without HR fully at the table, your company is missing out on perspectives and strategies that are necessary for success.

So, ready to take action?

Are you where you need to be to realize these steps? Our quiz can help you determine the places where you can boost your efficiency and improve the alignment between your HR initiatives and business goals.

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