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How to Align Performance Management with Employee and Business Goals?

Performance management is an important component in every business. Performance management is a process by which an employee’s performance is assessed in terms of ensuring if the goals are met in an efficient manner. Performance management is a holistic approach that analyzes the performance of an employee on a continuous basis ensuring productivity at the level of the business.

Essentially performance management is a strategic approach through which the productivity of the business is improved by improving the performance of the employees as well. It also aims at developing the capabilities of the employees. Performance management involves constant communication at all levels and employee engagement. Managers often use performance management to align employee goals with that of the business goals to increase efficiency. 

The best approach towards performance management is to align to focus not only on employee’s performance and development, but the success of your business as well. You need to ensure that your performance management system delivers the strategic outcomes of your business. 

Here are a few ways through which you can align performance management with strategic goals of your employees and your business:  

Set objectives for the business 

Your primary job is to clearly delineate the objectives for each department or team in your organization that depicts the overall strategy of the business. You ought to set one or more goals for each department keeping in mind the plans for your business. For instance, if you are assigning goals to the marketing team of your organization, their goal could be in terms of bringing in more website traffic and generate more leads.  

The goals that you set for your department/team must be measurable and specific. It needs to have a timeline attached to it. Goals need to be fulfilled adhering to the deadlines. Setting goals is often considered the first step in performance management and you must take into consideration the department first before disseminating goals to your employees. Individual departments must be aware of the strategic objectives of the business before acting upon their goals.  

Communicate your goals successively 

As a manager, it is now your duty to pass these goals onto your employees successively. Create their goals according the objectives of the business. It is also important that you tailor those goals according to the tasks that they are performing. If I were to use the same example of the marketing team, then the manager must set goals according to each person’s job profile. Therefore, if there is a person who is handling content in the team, then his/her goal must be in terms of producing a certain number of articles given at a specific time. 

Here is how you can cascade goals to your employees effectively: 

  • Follow the SMART criterion: Goals need to be specific, measurable, achievable, relevant and time-bound. At the same time, provide your employees with the right amount of resources to fulfill those goals. 
  • Set your expectations clearly: It is important that you elucidate your expectations to your employees clearly before acting upon those goals. You employees need to know how they are contributing the growth of the business.  
  • Proper documentation and analytics: Documentation is particularly important because you need access to your employee reports in order to set specific goals for them. Therefore, my recommendation here is to invest in a good performance management software, to maintain all data in one place. Then you will be able set objectives for your business and the right metrics for employee performance. 
  • Mutual agreement: After communicating the goals to your employees clearly, make sure that both you and your employee agree upon those goals. You may want to get something done, but it important that you get your employee’s support in achieving your goals.  

Continuous communication and reviewing 

It is important for managers to remember that performance management is not just a bunch of ratings and ticking boxes. As we discussed earlier, performance management is a holistic approach that involves constant communication at all levels. Conducting performance reviews must involve continuous feedback. It is important that you meet with your employees on a regular basis and not just once a year.  

Communicate regularly with your employees informing them about the status of their goals, and what can be done to improve their performance. Inform them about the status of the business and the current scenarios, challenges and trends in the business. Since you are expecting your employees to invest their time in meeting your business objectives, then you might as well show them how much you are invested in their careers.  

If necessary, you can broaden the scope of feedback by soliciting feedback from employees, their peers and external stakeholders. This will give employees an overall perspective on how well they have met organizational goals and business objectives. They will also get an idea as to how their performance has affected or contributed to the growth of your business.


The key to align performance management with employee and business goals is to increase commitment from everyone ranging from the employees to the senior management. Leaders need to dedicate themselves to this process effectively for their employees to follow the process. Employees need to find that connection between what they are doing and how it is contributing to the growth of the business. Aligning your performance management system with business goals can lead to better profits and competitiveness. 

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