Establishing 'Making it Happen' as a 'Formal & Predictable' Discipline

	Employee Goals Management

Execution-MiH ENCYCLOPEDIA → Execution Making-it-Happen → SECTION - Human Capital →

CHAPTER -

Human Capital Maximization-Overview

A strategic business plan works if every individual understands its impact on individual's goals, priorities and incentives.This chapter takes a high-level view of key imperatives to achieve human-capital maximization. This includes Goal-Setting, Development Planning, Performance Review and Feedback.

Topics

Communicating Strategic Business Plan at Individual Level

An individual must know on how the strategic business plan impacts his life and priorities. The army rule of 'Country, Unit and God over me' priority may not work in a commercial business enterprise and an Individual wants to see on what is in it for him/her.

Goal Sheet and Development Plan

An Individual works best when he/she knows on what he has to do, what will be the success criteria and what are the priorities, and above all how he will build further skills & knowledge to "make it happen"?

Annual Performance Review and Periodic Feedback Session Cycle

If the goal sheet is the performance contract of an employee with his/ her manager/ enterprise, the person needs to be told on a periodic basis on how he/she is doing. Moreover, there needs to be an annual (mostly) formal review on how the employee has done on achieving performance & development goals.

Employee performance vs. Business Performance

Is there a difference between an employee performance-vs-business performance? If no, then should we be managing an employee performance, just like business performance? The answer is both YES and NO. A business performance has aspects, which cut across multiple functions, processes and domains (even if we take a business leader as an employee), where as an employee's performance is generally managed around that areas which he can control or strongly influence. At the same time, over 75% of the performance management features are similar.

Employee Performance Management Cycle

Employee performance management cycle has mainly five components- Goal-Setting, leadership expectation setting, Development-planning, performance review and feedback and performance ranking. Each component of this cycle can be practiced on different frequencies. Organizations typically range between a quarterly to annual performance management cycle. It is also possible to have different frequency for different components. While performance review feedback is quarterly, the ranking exercise could be annual.

Employee Goals- What?

Goal-setting is most important part of the employee performance management, as it forms the main reference for other components of the performance management process. Employee goals are defined as something called a Goal-Sheet. Goal-Sheet will carry all the details for an employee to understand what he has to do, when he has to do, what will be the typical milestones, what are the standards of performance and what are the expectations of performance. Some more sophisticated goal-sheets also look at the linkages of the employee goals with other employees and the help-items he needs. A goal-sheet may also be supported by more detailed monthly-quarterly targets for both input and output numbers. Goal sheet it typically divided into three parts- Operational goals, initiatives or projects and qualitative goals (which go beyond pure numbers)

Employee Leadership- How?

Goal-sheets are more linked to the outcome which an organization expects from its employees. However, to achieve execution excellence and long-term capacity, one also has to look at how an employee accomplished a given goal and is he following the execution discipline and practices. This is enabled through a 'leadership competency framework'**. A leadership competency sheet for an employee will lay-down the leadership competencies expected from him.

Employee Development

Employee development is centered around the building person's capability to accomplish his goals and to demonstrate adequate leadership capabilities. The development plan is expected to be hard-nosed and it covers all the three aspects of employee development- classroom training, self-learning and on-the-job development. Just like goal-sheet**, development plan as development actions, timelines, milestones and completion criteria.

Employee Performance Ranking

Performance review of an employee is done in an absolute manner, where employee's manager shares the performance level of an employee. The performance ranking of an employee can be absolute or relative. The absolute performance ranking is as per the absolute performance by the employee. The relative ranking is the ranking in comparison to the other employees. This means that there is a cap on the %age of employees who can get a certain level of ranking.

Employee Performance Review

After the goal-sheet, leadership competency sheet and development plan are firmed-up organization and employee work on ensuring that the expectations are met. There is an ongoing exchange and feedback on the day-to-day basis. However, to ensure the process discipline a dedicated and pre-scheduled session is conducted between the employee and person's manager. This review can include the self-assessment by the employee, manager's performance review, manager's feedback on employee's performance, employee's feedback to the manager, the help items and support discussions and discussing employee's potential.

Employee Rewards and Incentives

Employee rewards & incentives are linked to an employees performance ranking. There are typically two kinds of compensation elements- Salary and Bonus. Salary increment adds to the annual inflow for current and future years. Bonus or incentive is the payment applicable to the current year only for the performance in the current period.

Employee Performance Management Capabilities

Employee performance management capabilities should include a system whereby an employee or manager can create a goal-sheet, development-plan, leadership competency sheet. It should include the ability for a manager to put his review comments. It should enable for a manager to look at the relative ranking within his-her organization.