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How to Align and Achieve Employee Goals with a Balanced Scorecard

February 17, 2024 thehrobserver-hrobserver-employeegoals

Why is it important to align employee goals with your organisational strategy? What are the strategies, and how do you implement them?

Here’s a summary of what you need to know:

If you want your organisation to be more successful, you need to ensure that not only are your employees engaged and productive, but that the work they are doing consistently supports the achievement of the strategic goals of the organisation.

Human Resources professionals have long worked to connect employee goals with organisational goals. Alignment fosters a sense of purpose and engagement among employees, as they can see how their efforts directly contribute to the company’s success. Also, a systematic approach to improving alignment enables better resource allocation, talent management, and employee performance management. Overall, strategic alignment of employee goals is a cornerstone for organisational success, promoting a unified and purpose-driven workforce.

What are the strategies for creating alignment?

Strategy 1 – Use a Structured Approach: All these desired outcomes are more easily achieved using a formal approach to strategy management like the balanced scorecard. The balanced scorecard framework provides a structured way to measure and monitor performance across multiple dimensions, such as financial, customer, internal processes, and organisational capacity. 

Strategy 2 – Foster Employee Engagement: Studies have shown that higher employee performance leads to higher organisational performance. It is known that engaged employees are passionate, committed, and invested in their organisation’s success. Employee engagement is directly related to job satisfaction and morale. Employees who are more engaged are more productive and perform better. Therefore, employee engagement is one of the most important factors in the success of an organisation.

Strategy 3 – Engage Your Leadership Team: Employees don’t know what their organisation wants to achieve without communication from leadership. They also tend to resist employee performance management unless they know their boss is engaged in the process. That is why leaders and managers must communicate expectations and motivate employees to meet and, more importantly, exceed those expectations.

Steps for Aligning Employee Goals Using a Balanced Scorecard

The first step in achieving strategic alignment is to define the vision and strategy of the organisation. This may seem like a straightforward task, but many organisations find it difficult to articulate.

Organisations that use a balanced scorecard framework then break down that vision and strategy into strategic objectives, which are the ongoing improvement activities that your organisation wants to achieve. They are the glue that holds the whole system together.

Measures, targets, and initiatives align with the objectives at the organisational level. Then, objectives, measures, targets, and initiatives cascade to each department/ division/ business unit.

The process of creating unit strategic objectives allows each unit to reflect on the overall strategy of the organisation and determine how it can make a difference. Each unit concentrates on what it does best, while also working in partnership with the others. Actions tied to objectives at every level inform decision-making and foster accountability.

Once the unit-level strategy is defined and implemented, the process moves to the employee level. It is important to remember that employees implement strategy on an individual and team level. Most people want to know exactly what is expected of them and be recognized for their accomplishments. That is where developing aligned individual objectives (or often called goals) comes in.

Managers and employees work together to make sure they understand what the organisational objectives are, what the expectations are for the team’s objectives, and what the measures are for each of those objectives. From there, they can set 3-5 employee goals.

These should be relevant to the role of that employee, fall within their area of responsibility, and include a target level of performance that’s achievable, high-achieving, quantifiable, and time-critical. Some organisations mistakenly set employee goals on a full-year basis causing their employees to lose focus over such a long time. Short-term goals (3-4 months) can help them stay focused on priorities and be more effective. This also allows for greater flexibility, allowing employees and teams to adjust from quarter to quarter as required. It is also best to review performance regularly (at least once a month) on topics related to progress, issues, and successes.

If an employee is not progressing as expected, it is the manager’s job to help them stay on track or to help them get back on track. This can include addressing issues and removing barriers for employees who are not able to do this on their own.

Editor’s note: This article is co-authored by Suzy Nisbet, Senior Associate, and David Wilsey, CEO, of Balanced Scorecard Institute.

Author
Suzy Nisbet

Senior Associate, Balanced Scorecard Institute

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