Goals, Roles, Pay & Performance

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If you got an allowance when you were a kid, you probably have a strong understanding of pay-for-performance: take out the garbage, earn a dollar. When applied to the business world, the principles are basically the same:

1. Set specific, measurable goals;
2. Communicate with employees about the goals and how to can achieve them;
3. Recognize employees’ achievements with specified recognition or rewards.

However, in the business world, pay-for-performance programs are often more difficult to successfully manage. First, understand that pay-for-performance programs are not universally revered--not everyone thinks such plans yield true productivity and loyalty. For starters, many surveys show that employees value recognition, learning and a worthwhile job above pay.

Second, if you fail to clearly communicate roles, goals and paths, you may end up with disgruntled employees, reduced productivity, low morale and higher turnover of the best and brightest.

But before you get scared-off by the challenges, consider that a well-executed pay-for-performance plan may be one of the best ways to create alignment between employee and corporate objectives, manage financial risk, encourage team results, and reward superior performance.

What’s the secret to success? It all comes down to communication.

Communication and Company Goals

Here are several recommendations to help you communicate your company’s goals more clearly. Follow these tips to better-prepare your employees and enhance the probability of successfully achieving your pay-for-performance results (which, depending on your goals can mean increased revenues, decreased losses, a shift toward a healthier culture, higher efficiency or better employee retention).

• In all communications, relate each goal to the jobs employees perform, and provide tactical action items. For example, ‘What can Ms. Engineer do to hit the desired measurement?’ or ‘The sales team can            to help increase the number of qualified leads to XXX between June and December.’ Engage employees in defining action steps for achieving the goals, rather than dictating tactics. Without clear, measurable tactics that correspond with employees’ roles, you can’t expect to have results that are clear, measurable and successful.
• Ensure that supervisors have the communication tools they need to link employees’ job performance to the goals, and to provide meaningful feedback about accomplishments and upgrades. Without effective and regular feedback, the fiscal year could end and an employee would have no idea whether she was failing or succeeding, leaving her without a chance to improve work habits and make a difference in the company or for herself. This is as detrimental as not communicating the goals in the first place. The supervisor’s tools might include:
  • reminders to perform employee reviews
  • interpersonal communication tips
  • a kit including clear descriptions of the goals
  • templates for managers to use for charting an employee’s activities by the corresponding goal.
• Market the goals as you would a product or service. If the goals represent how the organization will remain successful, why wouldn’t you give them the attention (time, money, expertise) that you would to your products and services? Consider the communication of your goals an internal marketing effort--and your most important effort. With an ongoing marketing program, you are demonstrating the importance of the goals. The opposite of this would be neglecting the goals, giving employees the perception that the goals are a "management-guru flavor of the month", soon to be abandoned.
• Invite "check-in" feedback. Once the program is underway, ask employees if they understand the goals, and how they can personally help achieve them on a tactical level. Change your communication approaches and messages accordingly to iron out any kinks or misunderstandings. Tailor communications as needed for different audiences.
• Get goal-achieving ideas from employees. Use employees’ in-depth knowledge of their own jobs to help determine how they can meet specific goals. For example, "we want to reduce costs in your department by 12%, where do you see opportunities to do this?" In this context, company-wide games and contests soliciting ideas have proven very successful for a variety of industries.
• Link company goals to employees’ motivators. Seems obvious, but it isn’t always done. If employees have said that bonuses are an important benefit of working at the company, show them how achieving the goals help them obtain the bonuses. Ways to do this include sharing individual stories of how someone met a personal goal (i.e., taking college courses at night) by achieving the company goals (effective time management). These anecdotes are inspiring and an easy way for peers to learn how they might change their behaviors.
• Saturate the workplace with information connecting the goals with activities. Don’t communicate the goals in a vacuum; relate them to everything else going on in the company. Perhaps include a regular feature in the newsletter, provide reminders to managers to do performance check-ins, make links between new projects and the goals, connect activities with goals at regular staff meetings, begin employee recognition programs, or circulate competitors’ news clips with a relevant goal attached to it.
• Revitalize interest in the goals by communicating successes and required upgrades. Provide frequent updates on progress toward achieving the goals, and what needs to change to rev up slacking efforts. This revitalization can include a recognition program. General Electric invites employees to assess and reward their peers on the spot with a $25 gift certificate. According to employees, it’s the peer approval that matters most. Also, by recognizing peers, employees are underscoring for themselves and others what the goals are and how, on a daily basis, they can achieve them.
• If you're an employee, ask for clarification. The responsibility for ensuring clear understanding of goals rests with both managers and employees. If a manager hasn't explained just what "achieving world class service" looks and sounds like, the employee owns responsibility for asking for clarifying examples. For example, an employee might ask, "Since my performance review requires 'good customer service', what kind of examples will you look for to determine whether I've met that goal?" or "What does 'being reliable' or 'supporting the sales goals' look and sound like to you?" If you're a manager, take responsibility for providing specific examples of what being goal-supportive looks, feels and sounds like.

While these tips cover a fraction of the organizational and interpersonal communication skill required when discussing goals, they do shine the light on everyone’s responsibility in achieving goals--whether priming employees to take the right action or taking action yourself.