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Insights

Setting and Aligning Performance Goals

Wednesday, April 1, 2020
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Performance goals can be tricky to get right. If business needs see a sudden shift during the year, goals set in January can be obsolete by July. And if goals are especially challenging, employees may resort to dishonesty to see them through.

For a look at how organizations approach goal-setting—and what practices are correlated with effectiveness—some findings from ATD’s Performance Management: Driving Organizational and Personal Growth research report are shared below. The new report, which is based on a survey of 534 talent development professionals, examines organizations’ performance management processes and offers recommendations for how talent development professionals can improve their performance management approach. The study defines performance management as the process of setting goals and expectations for employees, giving employees feedback on their performance, and addressing performance outcomes (such as rewarding strong performance or addressing poor performance).

The most common metric used to evaluate employees was performance goals, such as completing specific tasks, projects, or outcomes. Nearly all organizations (94 percent) used performance goals to evaluate employees.

Employees’ managers were most likely to have input in setting employees’ goals (94 percent), followed by the employee themselves (62 percent). At less than half of organizations, senior leadership (42 percent) and the HR function (20 percent) had input in setting employees’ goals. Just 8 percent of organizations gave talent development input in setting goals. However, top-performing organizations—those whose respondents reported high levels of effectiveness in all areas of the performance management process—were significantly more likely to give talent development input in setting goals.

Aligning employees’ goals to organizational goals was a common practice. At most organizations (59 percent), employees’ goals are aligned with the organizational strategy and goals to a high or very high extent. Nearly a third (31 percent) align these goals to a moderate extent, while 9 percent align them to a small extent or not at all. The report found that having high levels of alignment between employee goals and organizational goals was a practice significantly linked to top-performing organizations.

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Before aligning goals, however, it’s important to consider whether alignment makes sense for the role in question. “Full connectivity from the top of the organizational pyramid to the bottom is very tough to do,” says Wade Larson, chief human resources officer at Wagstaff. “I can see it working for managers, who should be aligned to lead their teams to those targets, but it doesn’t always make sense for lower-level employees to have all their goals align with corporate goals.” If employees’ goals do not align well with organizational goals, Larson recommends aligning their goals to departmental goals instead.

While performance goals were the most popular method used to evaluate employee performance, they weren’t the only method in use. More than three-quarters of organizations (79 percent) evaluated employees based on their demonstration of qualities or organizational values (such as teamwork, leadership, or learning). Most of the organizations evaluated employees based on their progress meeting professional development goals (such as gaining new skills, knowledge, or credentials) and their progress meeting stretch goals (defined as accomplishing tasks beyond an employee’s current knowledge or skills).

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Performance Management covers various topics, including feedback cultures, how job responsibilities are determined, how frequently managers and employees have performance conversations and performance evaluations, methods for addressing performance, performance management training, and barriers to effectiveness. The report includes interviews with subject matter experts about how TD professionals can improve their performance management approach.

The report, sponsored by Schoox, is available for purchase soon, and ATD members will be able to download the whitepaper for free.

To learn more about the report, join us for a free webcast (for members and nonmembers) on April 14 at 2 p.m. ET.

About the Author

Shauna Robinson is a former ATD research analyst. Her responsibilities included preparing surveys, analyzing data, and writing research reports.

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