Aligning performance with results can be achieved with a few overarching steps. By doing this, each person will be clear what his or her role is – and you can truly measure and adjust the organization’s performance at regular intervals.
The first, and most obvious step you must take when aligning performance with results is to determine concrete results measurement. For some organizations, this is a “done deal”, but for others, this is a necessary step. Does your organization measure success based on production, sales, operational efficiency, net income, or a combination of all factors? Would each job have a direct responsibility to these measurements, or are some more appropriate to certain measurements than others? In order to align correctly, you must determine what your measurements are. Once you know how the organization measures success or failure, you can move on.
Next, step into the role of human resources. What are the current performance measurements for individuals in the organization? If this aspect of HR hasn’t been evaluated in a while, you may be surprised at how associates are evaluated – and paid increases. Look at the performance standards and determine if they are competency based or based on random criteria. Do the performance standards take results measurement into account? As you answer these questions, you’ll get a good picture of the current state of performance measurement and evaluation. You may have to slightly tweak performance standards or you may have to start over. But once you know what your organization’s measurements are and how individuals are currently evaluated, you can take a firm step to align performance with results.
The best way to clearly and concretely make the alignment is to create performance agreements for all members of the organization. The agreement should outline expected results and should “contract” each individual to the successful completion of each result. To create this type of system, your HR area may have to drill down to each job or job group, based on the results to which they can contribute. The most successful performance agreements are competency based, so you’ll have to determine what competencies best support certain results. For example, sales people may contribute to net sales, income, production, and possibly expense management. How does each of those measurements break down into a competency? You may end up with Sales Savvy, Operational Efficiency, and Customer Service as broad competency categories. When you’ve created your agreements, you must use them properly to make your alignment complete.
Performance agreements, even with all of the work of creating competencies and aligning them to results, are no good if they are not executed properly. To start, every individual should have a performance agreement that they work on with their manager. Let’s say you have a new sales person. His or her goals can be less than the other sales people in the unit, but proportioned so that they help the entire unit meet the goal. Whatever the setup, each individual must agree, with his or her manager, to meeting or exceeding each goal – at the beginning of the evaluation period. When the evaluation period is over, let’s say from year to year, the manager must sit down with the organization’s results in hand and compare them to the individual’s performance. The results of this evaluation should determine pay increases and future movement.
As your organization’s metrics change, make appropriate changes to performance agreements. For example, if you know that you’ll have to increase production next year, make the adjustment to the expected results – and to the performance agreements of the jobs or job groups that are affected. Try not to make changes during the evaluation period. If you do have to make changes during that period, be sure to find an equitable way to adjust performance agreements.
Aligning performance with results does not need to be a complicated process – as long as you know how the organization measures success and how to translate that to an individual or groups’ performance expectations. Take the time to figure this out and you’ll put your organization into the fast track as a high performer.