How to Align Performance Management with Key Business Objectives

I’m on record with my opinion that we shouldn’t throw the baby out with the bathwater when it comes to performance reviews.

The annual performance appraisal process as commonly implemented is certainly broken. People need more detailed feedback and recognition more often than once a year.

The annual review does serve a purpose as a more formal, annual wrap-up of all the ongoing, informal feedback and recognition that has occurred throughout the year – recognition that ideally has been given by peers and colleagues, not just managers.

This is about far more than individual performance assessment or even motivation. Getting this right has major impact on the bottom line.

3 critical performance management questions

An Industry Week article asked if performance metrics boost performance, revealing concerning results on alignment between business objectives and performance metrics:

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Survey takers provided some additional evidence about why they may not be making greater use of performance metrics — and possibly achieving better results. It’s an alignment issue. Specifically, their business objectives and key performance metrics are not well aligned across their company, from the corporate level all the way down to individual plants and even to production lines. … Fewer than one in 10 respondents (9 percent) said their objectives and key performance metrics were ‘very well aligned,’ although that percentage grew to 37 percent when those who replied ‘well aligned’ were added to the mix.”

What does this mean? Essentially, if your employees are meeting/exceeding the individual performance metrics you set for them, but those metrics aren’t aligned with your business objectives – then your employees have been wasting their time and effort on work that doesn’t matter to the big picture.

Here are three (3) critical questions to get the most out of your performance management systems:

  1. Are your performance metrics aligned with your business objectives?
  2. Are you measuring performance results on a far more frequent basis than the annual review (to ensure employees remain in alignment with rapidly changing business goals)?
  3. Are you encouraging feedback from peers and colleagues (as well as managers) to get a truly complete picture of employee performance?

You can find more from Derek Irvine on his Recognize This! blog.

Derek Irvine is senior vice president of client strategy and consulting at Workhuman, where he leads the company’s consulting and analytics divisions. His writing is regularly featured across major HR publications, including HR Magazine, Human Resource Executive, HR Zone, and Workspan.