How to Align Employee Performance with Business Strategy

Article excerpt

Today more than ever, organizations Tiust differentiate themselves hrough intangible assets: talent, eadership, culture, and especially corporate strategy. Each year, leadership teams spend weeks and even months fine-tuning their business strategies to secure competitive advantages. At the end of this process, executives understand where their organization is heading, what actions they must execute, and how they will measure success.

However, there is often a disconnect between corporate leaders and employees when it comes time to implement the strategy. Employees frequently don t fully understand what role they play in supporting the strategy. And, since management will use employee performance metrics to define "success," it is vital they use the right metrics.

The good news is: leaders can use the strategic planning process to ensure that organizational strategy and measurement are translated to frontline employees.

For example, if we look at the call center of an organization that competes on service, management probably views the goal of each employee as "providing outstanding service," which clearly links back to the strategy. However, the company may use metrics like "attendance," or "availability to take calls," to evaluate performance. These metrics are valuable, but by themselves they don t link back to the organization's strategy.

As a result, employee incentive programs reward the wrong behavior and organizations don't fully understand which employees are truly successful in helping implement the business strategy.

DEVELOPING A PERFORMANCE MEASUREMENT PLAN

Recognizing high-performing employees requires more than simply looking at the numbers. You must identify metrics that match behavior with business strategy; interpret the meaning of widely different data points; continually reevaluate what success looks like; and communicate this information internally.

1. Identify the measurement criteria that are relevant to corporate strategyYou must ensure that the right performance metrics are used to evaluate business success and match those metrics to employee performance. By doing this, your organization can empower employees to excel in their own roles while positively affecting the organization's ability to execute its strategy.

Often, because employees are close to the customer, they can give useful feedback about what customers really value, help you identify metrics that truly evaluate performance, and tell you where there is disconnect between strategy and everyday reality.

By clearly matching business goals with employee behavior, you can clarify how each employee can be successful and then drive desired behavior with effective incentives.

2. Ensure that your measurement system accurately interprets employee performance-Start by finding correlations between performance metrics and the realities of your business. …