Purpose-driven performance management leads to organizational success

When organizations practice purpose-driven performance management, which includes components of direction, dialogue, inclusion, relevancy and mission, they tend to find improved success. In fact, a new study from the Institute for Corporate Policy finds that organizations survive on consistent, positive and sustained performance among their employees, and that performance is driven by accomplishing the employer’s mission.

Regarding direction, if a company aligns its goals with the skills of its work force, it can better execute its strategy to attain corporate goals, says Donna Parrey, senior research analyst of i4cp. Top companies typically support a company-wide focus on performance management, alignment between skills and goals, and a system for feedback to discuss accomplishments and development plans.

“The performance management process helps to identify weaknesses that might prevent a company from achieving its current goals or from pursuing future initiatives,” Parrey says. “It also identifies the strengths a company can leverage for achieving overall business goals.”

Purpose-driven performance management should also include dialogue between supervisors and their employees, and an employer should ensure its supervisors are trained for these situations, Parrey says. Supervisors are generally promoted because of their technical skills, but that doesn’t necessarily mean they can effectively direct conversations regarding performance. Parrey recommends role-playing exercises to help supervisors understand how to conduct appropriate conversations.

“You can’t take for granted that every person understands all those performance management techniques that work best,” Parrey says. “Discussions about developing goals and improving performance can be tricky, and it takes learning and practice to become effective at those discussions.”

An employer should ensure that even executives and board members are included in the performance management process, as well, Parrey says. How one employee performs impacts others; thus, everyone in the organization should be measured – from the top to the bottom. The study even finds that 67 percent of high-performing organizations measure performance among board members.

“The top leaders need to be held accountable, and this gives employees credible role models,” Parrey says.

For an organization to remain relevant, the performance management process should align with other human capital processes, such as talent acquisition and development. This is especially necessary when it comes to work force planning, Parrey says. During the performance management process, areas of weaknesses can be identified, which can then be integrated into work force-planning initiatives.  

“The performance management process should look at what talent is needed and where that talent will come from,” Parrey says. “The employer needs to determine how quickly the talent can be developed and how quickly new skills are needed.”

Overall, business leaders should actively promote performance management efforts by creating a connection with the corporate mission as the study finds that 71 percent of high-performing organizations say this is critical for success. When promoting performance management processes, it creates an environmental of acceptance that positively affects the business and its bottom line.

“Performance management is more than just a sum of individual performance activities,” Parrey says. “It’s actually a lever that moves your talent toward achieving the overall business objectives.”

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