TMCnet Feature
February 03, 2020

How Performance Development Plans Align Employee Goals with Company Goals

A major challenge for every business owner and team leader is how to help your team develop the necessary skills to help your business achieve its goals. How do you balance an employee’s need for personal growth with the higher priority need for the business to achieve its strategy?

Employee development is a joint effort between employers and employees to ensure there are opportunities for individuals to learn new skills, refine existing skills, and build knowledge and experience. This leads to more engaged staff, which not only boosts morale and engagement, it also helps retain organizational expertise, and align employee and company goals. Employee developments plans are a core element of performance management training, and the link between the individual level of planning, and the organizational level plans/

Keeping everyone focused on the same goals is especially important for high growth companies as it is impossible for a company to scale and grow without having everyone moving in the same direction towards their overall goals. And, as an individual, it's difficult to accomplish anything significant or develop as a leader if your personal goals are not fully aligned with the company's higher-level goals.

The Golden Thread is a framework for aligning personal metrics with organisational objectives, and individual goals throughout the business. Ideally, everyone on a team should be able to trace the path from their individual goals all the way up to the broader company goals. This is what is known in the industry as the “golden thread”. Every employee becomes not only aware of the organization’s strategy, but also aware of how they can create value in the organization, and they are incentivized to achieve this.

The goal of the golden thread is to align performance management with business strategy so that everyone coordinates their own goals with those of the company. The reality is that if your employees are meeting their own performance metrics, but those metrics aren’t aligned with your business strategy then your staff have been wasting their effort on goals that don’t matter to the big picture. Managers and business owners should consider using performance development plans as a basis for implementing this golden thread.

The first step on the path to alignment is cascading goals throughout the organization. Cascading goals means reinterpreting the business objectives so that they are applicable and relevant for each staff member. The next step is to understand the personal growth goals for individual employees. Performance development plans are particularly important for ambitious employees who know the exact next role in the organization for which they are aiming. They need to fully understand exactly what competencies and performance levels are required in order to be effective in that role. The performance plan should demonstrate a clear path for them to achieve this goal.

Aligning performance development plans in this way not only increases the employee motivation, but it also helps them to better understand their place in the company, and how their contribution helps them and the company succeed together.

Annual appraisals are an excellent way to help identify performance and competency gaps. Goals are typically created by identifying gaps in competencies or behaviors, so the annual appraisal is an advantageous time to identify competency or skills gaps indicating opportunities for development. It is essential to use the appraisal meeting as a jumping off point for development only and to keep it completely separate from any compensation related discussions. These discussions should be entirely separate from assessment, promotion or pay discussions.

For companies that are undergoing significant change, you will need to allow for an additional level of flexibility in your development plans. Each time a staff member’s role changes or when there is significant change in their responsibilities you will need to jointly revisit the performance plan to make sure it is still relevant.

Misalignment of individual and organizational goals is a serious obstacle to a company achieving its strategic objectives. There is no point in staff working hard to achieve or exceed their goals if those goals do not progress the company towards achieving the strategy in the first place. Performance development plans are a highly effective method of ensuring that the “golden thread” of alignment keeps all ships moving in the same direction.

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