CONTINUE TO USE THE SAME TOPIC NY&CO
PLEASE DO NOT SUBMIT A BID FOR THIS ASSIGNMENT IF YOU DO NOT HAVE EXPERIENCE WITH GRADUATE LEVEL WRITING TERMS AND CONCEPTS. ALL DIRECTIONS MUST BE FOLLOWED AND NO PLAGIARISM. MY SCHOOL USES SOFTWARE TO DETECT COPIED MATERIAL. AND REFERENCE THE BOOK AND USE SCHORLARY SOURCES
Required Resource
Text
Read
Commonsense Talent Management
:
· Chapter 3: Business Execution and Strategic HR 27
· Chapter 5: Doing the Right Things: Becoming a Goal-Driven Organization 101
Hunt, S.T. (2014).
Common Sense Talent Management: using strategic human resources to improve company performance
. Retrieved from Ebook Central
Discussion 1
Strategic HRM and KSAs |
Discuss the relationships among KSAs (knowledge, skills, and abilities), job analysis, organizational strategy, and HR activities. What are the KSAs needed by the firm to achieve the strategy and what KSAs are currently resident? How does the firm grow its KSAs you selected in Week One NY& Co to meet the strategic challenge? Support your post with at least one current and relevant article from the ProQuest database. Present your findings in 200 words or more in your discussion post.
Discussion 2
Goal-Driven Organizations |
Using Figure 5.4 on page 139 of your textbook, describe how to use the model to set developmental goals for the employee population. Are balanced goals important? Explain. Support your post with at least one current and relevant article from the Ashford Library database. Present your findings in 200 words or more in your discussion post.
Week 2 – Assignment
Targeted Work Class
Write a 1000-1200 word paper:
· Describe the results of your assessment of the work processes and key employees to be addressed in your final paper. NY&Co
·
Discuss how the organization will change while meeting its strategic challenges in the future.
· Include the kinds of workers will be needed; what knowledge, skills, and abilities will be appropriate; what is the compensation system and is it reflective of the market’s conditions?
In addition to the requirements above, your paper:
· Must be double-spaced and 12 point font
· Must be formatted according to APA style
· Must include an introductory paragraph with a thesis statement
· Must conclude with a restatement of the thesis and a conclusion paragraph
· Must reference two scholarly resources in addition to the textbook
Must include a reference page written in APA format
Carefully review the
Grading Rubric (Links to an external site.)
for the criteria that will be used to evaluate your assignment.
27
Business Execution and
Strategic HR
The purpose of strategic HR is to get employees to do what the company needs them to do to achieve its business objectives.
The term used to describe this is business execution. This chap-
ter discusses how to use strategic HR to drive business execution.
Section 3.1 discusses the role business execution plays in com-
pany performance and how it ties to strategic HR at a general level.
Section 3.2 explains how to assess a company’s business execution
capability and requirements. Sections 3.3 and 3.4 discuss how to link
business execution needs to strategic HR processes and how to use
different strategic HR processes to support a company’s specific
business execution needs. Sections 3.5 and 3.6 address key con-
cepts related to increasing strategic HR process maturity and build-
ing integrated strategic HR processes tied to business execution
requirements.
3.1 DEFINING BUSINESS EXECUTION
Running a business requires doing three things:
1. Defining strategy. Figuring out what you need to do to succeed
T H R E E
c h a p t e r
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management28
2. Managing assets. Securing the capital and resources required to support
the strategy
3. Driving business execution. Building and managing the workforce so you
effectively leverage company assets to deliver strategic objectives
Defining strategies is about determining your business objectives and devel-
oping plans to achieve them. Managing assets is about getting the tools, money,
materials, technology, and other resources needed to carry out your plans.
Business execution is about actually carrying out the plan to achieve your goals.
An analogy can be made to weight loss that helps illustrate these three things.
My strategy is to lose ten pounds before December by exercising more and eat-
ing right. My assets include a membership to a health club and joining a vegeta-
ble co-op. Business execution in this case is about actually exercising at the gym
and eating more vegetables in order to lose the weight. Which of these three is
the hardest?
The CEO typically has a lead role in defining strategy with considerable sup-
port from business operations, product development, and marketing. Managing
assets is often owned by finance and supply chain. Driving business execution
is ultimately the responsibility of line leaders, but because it is about having
the right people doing the right things, it is directly supported by HR. Due to
advances in HR technology, HR leaders now have both the knowledge and tools
to play a central role in driving business execution. The next step is for HR lead-
ers to take ownership of this role, which often includes convincing other busi-
ness leaders of the value of strategic HR.
Many business leaders have historically viewed HR as an administrative func-
tion that is necessary but relatively uninteresting to business operations. HR pro-
cesses in some companies might be likened to electrical wiring in a house. A house
without good electrical wiring is unsafe, inefficient, and potentially unlivable,
but most people don’t buy houses because they have superior electrical wiring.
The same might be said about the way many companies use strategic HR pro-
cesses such as performance management, staffing, or learning and development.
Operations leaders appreciate the importance of these processes for running a sta-
ble company, but they do not see them as tools for increasing business execution.
When operations leaders tell me, “I don’t care a lot about HR processes,” my
response is, “Do you care about people doing what you need them to do to sup-
port your business strategies?” If their answer is yes, then they do care about
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
Created from ashford-ebooks on 2020-03-31 02:40:48.
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Business Execution and Strategic HR 29
strategic HR. The problem is they do not appreciate the impact that strategic HR
has on business execution and do not know how to use strategic HR processes
to drive business results. Many business leaders also do not appreciate how
advances in HR technology make it possible to use strategic HR processes far
more effectively now compared to how they have been used in the past (see the
discussion: “Technology and the Evolution of Strategic HR”). These mispercep-
tions must be addressed in order to effectively use strategic HR methods in an
organization. This is done by clearly articulating how different HR methods can
help the company achieve its business objectives.
T E C H N O L O G Y A N D T H E E V O L U T I O N O F
S T R A T E G I C H R
An HR department needs two things in order to use strategic HR pro-
cesses to drive business execution:
• Expertise. The HR department must have expertise in methods for
predicting and changing employee behavior. For example, under-
standing how to use goals to motivate employee performance,
or being able to measure employee performance in a manner that
enables the company to predict an employee’s future potential.
• Implementation. The HR organization must be able to efficiently
deploy its business execution expertise across the organization.
It does not matter if the HR department knows how to increase
employee performance if it cannot effectively share this knowledge
with the line leaders who actually manage employees.
Technology plays a pivotal role in enabling HR to support business
execution. Its impact has been twofold. First, by increasing adminis-
trative efficiency, technology has enabled HR professionals to focus
more time on building methods for increasing workforce productivity.
Second, technology provides a medium for getting HR expertise into
the hands of managers so it can be applied across the organization. To
illustrate how technology has affected the role of HR, let’s take a look
at four different generations of HR that have emerged over the past
twenty or so years:
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management30
• Pre-1990: Generation “personnel administration.” Prior to 1990,
many HR organizations were almost entirely focused on personnel
administration. This was due in part to the sheer amount of time
required to manually administer HR processes before the wide-
spread use of computers. Prior to 1990, many HR organizations were
not even called “human resources.” Instead, they had titles such as
Office of Personnel Administration or Personnel Department. The
main focus of HR in this generation was how to process employee
paperwork efficiently.
• 1990 to 2000: Generation “human resources.” Two things happened
in the 1990s that led to personnel management being redefined as
“human resources.” First, implementation of HR process automation
technology significantly reduced the time needed to perform admin-
istrative HR tasks, which freed up HR organizations to focus more
on topics related to strategic HR. This led to significant advances
in the expertise found within HR related to predicting and chang-
ing employee behavior. Many of the talent management techniques
that are now widely used were largely developed in the 1990s (e.g.,
competency models, structured interviews, goal setting). Second,
the widespread adoption of personal computers made it possible
for HR organizations to use more sophisticated techniques to sup-
port key talent decisions related to hiring, promotions, and pay (e.g.,
using computer-based tools to evaluate employee performance and
assess job candidates). Throughout the 1990s, the focus of HR shifted
beyond simple personnel management to include processes designed
to improve the quality of workforce decisions (e.g., selecting high-
performing employees, proactively managing employee turnover,
and using job goals to drive employee development).
• 2001 to 2010: Generation “talent management.” Widespread adop-
tion of Internet systems in the 2000s allowed HR organization to
share data across what had previously been independent HR processes—
for example, automatically importing data collected during the
hiring process into systems used to support ongoing employee devel-
opment. Greater access to data enabled HR to shift from focusing on
specific employee decisions to creating more integrated methods to
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 31
3.2 ASSESSING BUSINESS EXECUTION NEEDS
To be successful, a company must identify the right strategies to achieve its busi-
ness goals and then execute these strategies better, faster, and more efficiently
than the competition can. There can be little doubt about the value of good strat-
egies, but execution makes the difference between having good strategies and
achieving great results. As the pace of market change increases, it is even more
critical to evaluate and manage a company’s ability to rapidly execute business
strategies to meet unforeseen opportunities and challenges.
Business execution is defined as the ability to use company assets to achieve busi-
ness results (see figure 3.1). Because employees represent the largest asset cost for
most companies, the major issue affecting business execution capability is utilization
of talent. Despite the importance of business execution, most companies have little
insight into their ability to meet business execution needs. This includes their abil-
ity to redeploy their assets to meet future business challenges. Many companies have
elaborate systems to define strategies and monitor assets, but few put equal emphasis
into the methods used to manage and measure business execution capability.
increase workforce productivity. No longer was HR limited to being a
series of isolated silos focusing on staffing, training, compensation,
and succession. Now HR could function as a set of integrated pro-
cesses designed to ensure a steady supply of high-performing talent
in critical job roles.
• 2011–. Generation “business execution.” As companies adopt more
efficient and easy-to-use computing applications, HR organizations are
spending less time administering HR processes and more time figur-
ing out how to use these processes to increase workforce productivity.
HR is focusing less on simply keeping track of who employees are and
more on ensuring that these employees are being used effectively to
support the company’s short- and long-term business strategies.
Improvements in HR technology over the past twenty years have
enabled the role of HR to move beyond providing administrative sup-
port to enabling execution of business strategies. The result is HR
departments are now in a position where they can significantly improve
how line-of-business leaders manage their workforces.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management32
No single process or set of metrics fully captures the concept of business exe-
cution. Companies must develop multiple processes to support different types of
business execution needs. These needs can be broken into six general categories
of business execution drivers: alignment, productivity, efficiency, sustainability,
scalability, and governance. These drivers were identified through examining the
underlying business challenges that led companies to make significant invest-
ments in strategic HR processes:1
• Alignment: Are people focusing on the things that matter for delivering our
strategy? Alignment requires the ability to rapidly and systematically commu-
nicate business goals to employees throughout the organization so they see the
connection between high-level strategies and how they spend their time at work.
Does everyone in your company know what goals they are expected to accom-
plish? Do they understand why their goals are important to the company’s over-
all strategy? Achieving alignment requires effective communication between
senior leaders and employees about the company’s strategy and what each indi-
vidual employee can do to support it. I once saw a great example of increasing
alignment in a global manufacturing company. This company was facing bank-
ruptcy unless it radically shifted its focus to more profitable projects. It used
strategic HR processes centered on goal setting and performance management
to ensure that employees across the organization were working on projects that
could be tied directly back to key strategic initiatives. The increased visibility
and accountability created by these processes motivated employees to do what
was necessary to return the organization to profitability.
• Productivity: Are people doing what we asked them to do? It is important
to differentiate between alignment and productivity in any examination of
Strategy
Business Execution
Capability
× × =Assets Business Results
Figure 3.1
Business Execution Capability
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 33
business execution. Alignment is fundamentally about strategic communica-
tion. Productivity is about defining, evaluating, and improving performance. The
difference between alignment and productivity is the difference between know-
ing what you should do and actually doing it. Productivity depends on leaders’
holding employees accountable for results and employees being given the incen-
tives and resources required to create these results. I once worked with a tech-
nology company that used strategic HR processes to increase the productivity of
its research and development divisions. It was critical that the company develop
and get new products to market as fast as possible, and that depended on the
performance of highly expensive engineers. The company could not afford to
lose good engineers, but it could not afford to employ engineers who were not
pulling their weight. The company turned to strategic HR methods to evaluate
the performance of engineers on a regular basis and held senior leaders account-
able for rewarding and retaining high-performing engineers and developing or
managing out engineers who were performing poorly.
• Efficiency: Are we efficiently using the people in our company? It is one thing
to achieve results. It is another to achieve these results using the minimal pos-
sible resources. Efficiency comes from having people with the right skills in
the right positions, recognizing and retaining superior performers, appropri-
ately managing poor performers, and allocating rewards and resources in a way
that maximizes productivity. I have worked with many companies that have
increased efficiency by using strategic HR methods that ensure compensation is
allocated to employees based on how much they contribute to the organization.
By creating a tighter link between pay and performance, these companies were
able to increase the retention of high-performing employees, and some even
decreased the total amount spent on compensation because they no longer gave
the same increase across the entire employee population. Another example of
increasing efficiency comes from a sales organization that studied relationships
between manager span of control and sales performance.2 They discovered that
managers whose teams had more than ten employees performed more poorly
due to the inability of the manager to provide effective coaching to all the team
members. They also found that teams with fewer than five employees performed
at about the same level as teams with six to ten employees, so there was no value
paying for two managers from a team of ten when one manager would be just as
effective. The most efficient span of control came from having teams with six to
ten employees.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management34
• Sustainability: Are we able to maintain stable, consistent performance over time?
One of the biggest threats to business execution is the unplanned loss of critical tal-
ent required to achieve key strategic goals. Managing this risk requires developing
processes to manage employee turnover and knowledge transfer effectively. Ensuring
a company’s results are sustainable over time also requires understanding whether
key people in the company are engaged and fully committed to the organization. An
energy company I worked with addressed sustainability issues by using strategic HR
methods to forecast the number of skilled line workers predicted to retire over the
next fifteen years. They then built highly focused recruitment and development pro-
grams to ensure they had employees available to quickly fill these future vacancies as
they occurred. Their goal was not to reduce turnover overall but to eliminate unex-
pected and unmanaged turnover.
• Scalability: Do we have processes in place to ensure a steady supply of the tal-
ent needed to execute our strategies? Scalability is a key element of business exe-
cution when companies are in growth mode. It is also important for being able
to efficiently reduce or reallocate the workforce based on shifting business needs.
Businesses must be able to scale their workforces to manage changes in business
demands and strategic focus. This requires creating processes to attract, develop,
and retain the people needed to support the company’s evolving business needs.
It also means having methods to reduce or reallocate head count in an efficient,
fair, and productive manner. A US-based financial company used strategic HR
methods to address its ability to scale operations in Asia. The company forecast
the level and number of skilled employees needed to support its Asian business
growth targets. It then developed an integrated set of staffing, development, and
succession management programs to ensure having the talent needed to support
its Asian growth plans.
• Governance (security, compliance, and risk management): Is anyone in the
company doing something that could create significant liabilities for our busi-
ness? There are many stories of highly successful companies that suffered
significant financial losses or even ruination due to inappropriate behavior
by a few employees. Governance is about creating methods that reduce the
likelihood that employees will do something that will put the company at
significant risk or long-term disadvantage. This includes creating processes
to reduce the risk of excluding certain demographic groups of employees
from career benefits and opportunities, achieving short-term results through
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 35
inappropriate methods, or tolerating negligent, unethical, or unsafe behavior.
A global retail organization I worked with faced issues of governance when
it discovered that store managers in certain regions were favoring men over
women when making promotion decisions. To address this issue, the lead-
ers implemented strategic HR processes to ensure promotion decisions were
made using consistent, transparent, and job-relevant criteria. This both
decreased bias in promotions overall and made it more apparent if certain
managers were making decisions based on factors that were not job relevant.
The relative importance of these six business execution drivers changes
depending on a company’s strategy, external market demands, current work-
force capabilities, and existing talent management practices. The most important
drivers for companies undergoing rapid growth are likely to be quite different
from companies whose growth is relatively slow or even declining. The drivers
that matter the most to technology companies might be different from those that
matter most to health care organizations. (See the discussion: “Six Questions for
Assessing Business Execution Capability” for a simple diagnostic way to evaluate
your organization’s current business execution drivers.)
S I X Q U E S T I O N S F O R A S S E S S I N G B U S I N E S S
E X E C U T I O N C A P A B I L I T Y
Business execution capability is defined as a company’s ability to align
and use its assets to achieve strategic objectives. In most companies, the
most expensive asset is its workforce. Salary, benefits, and other employee-
related expenses represent over 60 percent of the operating costs for most
organizations. For this reason, business execution capability depends heav-
ily on a company’s ability to optimize the productivity of its workforce.
The following six questions can be used to estimate your company’s
business execution capability. Discuss these with your operations leaders
to assess the relative strengths and weaknesses of business execution in
your company. Ask leaders to respond to each question using a 1 to 5
scale, where 1 means, “No, I have little confidence in our ability to do
this if required,” and 5 means, “Yes, I am extremely confident we could
do this if required.”
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management36
Question 1: Alignment. Can our company significantly change its
strategic direction in nine months or less? This is the sort of change
many companies faced during the peak of the 2008 recession. Quite
a few companies have discovered too late that they were not up
to the challenge. Could you refocus your workforce around a new
set of goals quickly? This requires more than just communicating
the change. It requires ensuring that employees understand their
individual role in the change and that they know what activities
they need to stop doing and what things they need to start doing
that they were not doing before. Answering a confident yes to
this question requires having methods that allow you to quickly
clarify how changes in the overall company strategy affect the indi-
vidual goals and job responsibilities of each employee across the
organization.
Question 2: Productivity. Can our company agree on who the
top 20 percent performing employees are, and explain this to the
other 80 percent in a way that doesn’t make them feel that they
should be pursuing opportunities elsewhere? One of the common
traits found across high-performance work environments is a clear
understanding of what success and failure look like. Employees
in a high-performance environment do not have to ask some-
one whether they are doing well. Constant feedback allows them
to self-evaluate whether they are performing above or below
expected levels. They also trust that performance evaluations are
consistently and fairly applied. Even if their performance is below
average this year, they know what they need to do to become a top
performer next year. There is no guesswork around the question,
“What does it take to succeed here?” Performance is not a function
of who you know or work for; it is a function of what you do and
accomplish. Answering a confident yes to this question requires
having processes that clearly define, communicate, and consis-
tently measure the performance expectations set for employees.
Question 3: Efficiency. Can our company determine the return on
investment we receive from investing in employees’ salary, bonus,
and development? It is appropriate and intelligent for companies
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 37
to invest more resources in the employees who make the great-
est contributions to organizational profit and growth. This includes
pay, promotions, and access to career development resources and
opportunities. Companies invest resources in employees with the
assumption that this will lead to increased revenue and decreased
operating costs. Yet few companies rigorously test to ensure they
are investing resources in the employees who provide the greatest
returns to the company. Many do not even know if they have hired
an optimal number of people in different roles, or if they are under-
or overstaffing positions. Achieving peak efficiency requires having
processes that establish clear links between operational profitabil-
ity and growth, workforce head count, employee performance, and
costs associated with employee pay and development. Answering a
confident “yes” to this question requires having data that enable
you to determine how investments in the workforce affect company
performance and having processes to shift workforce resources so
they provide the greatest returns with the least costs.
Question 4: Sustainability. Can our company effectively sustain
our current level of performance over the next three years? It is one
thing to achieve performance goals in the short term. It is another
to consistently achieve performance targets year after year. Sustained
performance is one of the differences between good companies and
great ones. When it comes to business execution, the biggest risk to
sustainability is unexpected and unmanaged employee turnover. At
some point, every employee who works for you will leave your com-
pany. What processes do you have to avoid preventable turnover, man-
age unpreventable turnover, and ensure consistent operations in the
face of workforce change? Answering a confident yes to this question
requires having clear strategies and methods for predicting and man-
aging turnover, maintaining employee engagement levels, and trans-
ferring knowledge across different segments of the workforce.
Question 5: Scalability: Can our company adapt the size of its
workforce to meet projected business growth demands over the
next three years? Companies often hope for aggressive growth,
but many struggle with the demands it creates. If necessary, could
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management38
you increase the size of your workforce by 50 percent in under
twelve months to support increased market demand for your prod-
ucts and services? This kind of explosive growth is happening in
emerging markets, but few companies can manage it effectively.
Conversely, if you were hit by a sudden drop in business revenue,
are you well equipped to respond? Could you reduce workforce
costs by 20 percent and still maintain critical productivity, quality,
and customer service levels? It is one thing to grow efficiently, but
quite another to scale back operations gracefully when necessary.
Answering a confident yes to this question requires having meth-
ods to accurately project future workforce requirements and pro-
cesses to smoothly increase, decrease, or reallocate the workforce
based on changing business needs.
Question 6: Governance (security and compliance). Can our
company ensure no one is creating inappropriate levels of legal
or financial risk for the organization? The CEO of one of the larg-
est companies in the world once told me, “In a company this big,
there is probably somebody somewhere doing something they
should not be doing.” He then said that although there is no way
to absolutely prevent employees from engaging in inappropriate,
illegal, or unethical activities, companies can create processes that
reinforce norms and beliefs around legal and ethical behavior.
Establishing hiring, promotion, pay, and performance processes
that reinforce consistent beliefs around appropriate behavior sig-
nificantly reduces the chance of hiring and tolerating employees
who intentionally or inadvertently put a company at significant
risk. Companies can also collect measures to determine whether
people in the company are intentionally or unintentionally making
decisions around pay, promotions, and hiring that might unfairly
disadvantage certain employee populations. It is difficult to ever
answer a totally confident “yes” to this particular question, but a
reasonable level of confidence can be obtained by instituting clear
hiring, performance, pay, and promotion processes that reinforce
a commitment to core company values and tracking data to ensure
these processes are being followed across the organization.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 39
3.3 USING STRATEGIC HR PROCESSES TO SUPPORT
BUSINESS EXECUTION
Strategic HR processes support business execution by changing the workforce
either through bringing new employees into the organization or getting exist-
ing employees to do things in the future that they were not doing in the past.3
The challenge to HR professionals is figuring out what workforce changes are
most relevant to the company’s strategic needs. To be strategic, HR leaders must
understand which business execution drivers (alignment, productivity, effi-
ciency, sustainability, scalability, or governance) are most critical to business
leaders and build HR processes that link to these drivers. Linking business strat-
egies to specific HR processes is basically a three-step process.
Step 1. Understand the company’s business strategy. What must the company
achieve to fulfill the commitments it has made to its shareholders?
Step 2. Define what business execution drivers are most critical to achieving this
strategy. Engage line leaders in a discussion around two questions: “What do
we need employees to do in the future?” and, “What people do we need to
add to the workforce?” Answering these questions will determine which of
the six business execution drivers are most critical to achieving the company’s
business strategy. It can also be useful to ask business leaders to rank-order
the six business execution drivers based on criticality to the business. Asking
line leaders to explain why certain drivers are more important than others
provides significant insight into where to focus strategic HR efforts.
Step 3. Implement appropriate strategic HR processes to support key business
execution drivers. All of the 4R strategic HR processes have some effect on
each of the six business execution drivers. But certain processes will be more
relevant to business operations depending on which business execution driv-
ers are most critical to achieving a company’s strategic objectives.
To illustrate how this three-step process works, consider this hypothetical
conversation between a chief human resource officer (CHRO) and a CEO:
CEO: I just got back from our annual board meeting.
CHRO: What are our really big strategic commitments for next year? [Step 1]
CEO: There are several, but the most challenging is to achieve 25 percent mar-
ket growth in the Asia-Pacific region. It is a highly competitive market.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management40
CHRO: I can imagine there must be a lot of business challenges associated with
this strategy. What about the people aspect? Do you think we can do this
with our existing workforce and how it is structured? [Step 2]
CEO: To be honest, I hadn’t thought about it from that perspective. But I don’t
see how we can achieve 25 percent growth unless we hire a lot more
sales and services people and help our leadership team in the region keep
them focused on these aggressive growth targets.
CHRO: So we need to focus on scaling the talent in that region and aligning
them around these growth goals? [The alignment and scalability busi-
ness execution drivers]
CEO: Yes, although I’m not sure how we’re going to do that in less than twelve
months.
CHRO: This seems as if it is largely a matter of getting the right people in the right
jobs and focusing them on the right things. The HR department has a lot of
expertise and some pretty powerful tools in this area. Would you like me to
set up a meeting next week to provide you with a road map setting out actions
to build the Asia-Pacific team you need to meet these growth targets? [Step 3]
CEO: That would be great! I look forward to seeing what your team puts together.
It will probably take a bit more than a short conversation to define your com-
pany’s strategic HR needs, but the logic you use should still follow these same
three basic steps because they establish a link between HR processes and specific
business needs. Failure to define business execution drivers can result in focus-
ing on less valuable HR processes and may leave line leaders confused about the
business relevance of HR activities.
Finally, remember that the relative importance of business execution drivers
often changes over time and within companies. For example, scalability is critical
when a company is growing, but as it matures, emphasis may shift to efficiency
and sustainability. Different drivers may also be more or less important for cer-
tain parts of the company depending on their size, business goals, and the nature
of their workforces. This can create challenges for HR departments tasked with
supporting multiple functions. As an example, I once worked with a global man-
ufacturing company that had a wide range of products. One of the more mature
product divisions was completely focused on efficiency and increasing margins. In
contrast, a new product area was struggling with scaling to meet growth demands.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 41
The first department wanted HR to build processes to increase performance and
productivity of existing employees, while the second department cared only about
building processes to hire and train new employees. The challenge the HR depart-
ment had to solve was how to balance the needs of both areas.
3.4 LINKING SPECIFIC BUSINESS EXECUTION DRIVERS TO
DIFFERENT HR PROCESSES
The business value of different HR processes depends on which business execu-
tion drivers are most critical to achieving a company’s strategic goals. Figure
3.2 illustrates how the six business execution drivers of alignment, productiv-
ity, efficiency, sustainability, scalability, and governance link to the 4R strategic
HR processes of right people, right things, right way, and right development.
The typical relationships between business execution drivers and HR processes
are described below. The most relevant HR processes are listed in parentheses in
the rough order of their influence on each business execution driver:
Alignmen
t
Productivity
Efficiency
Sustainability
Scalability
Governance
Right
People
Right
Way
Right
Things
Right
Development
Figure 3.2
Relationship of Strategic HR Processes to
Business Execution Drivers
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management42
1. Creating alignment (right things, right way). Alignment is primar-
ily about employees knowing what goals they should focus on and why
these are important to the company’s overall strategy. The best way to
increase alignment is to implement goal management processes that
ensure employees are focusing on the right things. This includes making
sure employees understand how their actions influence the success of the
organization as a whole. Performance management processes that evalu-
ate whether employees are doing things the right way may also be relevant
for alignment. This is particularly true if a company is focusing on align-
ing employees around cultural behaviors and values as opposed to specific
tactical goals.
2. Increasing productivity (right way, right things, right people, right develop-
ment). Productivity is directly influenced by performance management
processes that communicate, encourage, and hold employees accountable
for meeting performance expectations (doing the right things the right
way). It is also indirectly influenced by ensuring that employees are placed
in jobs that leverage their strengths and are given tools and resources to
increase their performance levels.
3. Improving efficiency (right people, right things, right way, right develop-
ment). A variety of methods can increase efficiency. First, ensure the com-
pany has optimal staffing levels in all jobs. Nothing undermines efficiency
more than under- or overstaffing positions. Second, ensure people are
working in the most productive manner possible. This requires focusing
people on goals that are critical to business success and consistently mea-
suring and improving their performance. Efficiency can also be improved
by increasing internal hiring and promotion of existing employees and
avoiding costs associated with external staffing.
4. Ensuring sustainability (right development, right people). Sustainability is
primarily about managing turnover in key positions through effective
staffing, workforce planning, and succession management. The ability to
forecast and plan for turnover is particularly critical to sustaining consis-
tent performance. This includes hiring and developing people to manage
job transitions, as well as managing current employees in a manner that
decreases the risk of unplanned, regrettable turnover.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 43
5. Creating scalability (right people, right development, right way). There
are two basic types of scalability: growth to support expanding busi-
ness demands and cutting back the workforce to manage shifts in busi-
ness needs. Scaling to support growth requires having methods to rapidly
recruit external talent and get them up to speed to take on new roles.
Scaling to meet shifts in business needs requires having methods to real-
locate staff based on changing workforce requirements and, if neces-
sary, having tools to guide intelligent downsizing decisions that take into
account employee performance contributions.
6. Governance (right way, right people). There are two primary types of gover-
nance: governance focused on complying with government or contractual
laws and regulations and governance focused on discouraging employees from
taking excessive risks or engaging in counterproductive activities. The former
tends to emphasize the use of fair and appropriate methods for staffing posi-
tions and evaluating performance. The latter tends to emphasize methods to
communicate and measure core performance expectations and standards.
The relationship between business execution drivers and strategic HR pro-
cesses is more complex than how it is illustrated in figure 3.2. But having a
general sense of the relationship between strategic HR processes and the busi-
ness execution drivers they have an impact on is critical to effective design and
deployment of strategic HR methods. Experience shows that many HR organi-
zations fail to clearly articulate the business execution reasons for implementing
HR methods. Many HR practitioners do not fully understand how the pro-
cesses they support bear on their company’s business strategies. Even if the links
between HR processes and business drivers are well understood in HR, they may
not be apparent to non-HR line leaders. If the relationship between HR processes
and business needs is not identified and communicated, then these processes are
likely to be viewed as administrative activities with little relevance to day-to-day
business operations.
3.5 INCREASING STRATEGIC HR PROCESS MATURITY
Using HR to drive business execution begins with understanding which business
execution drivers are most critical to supporting business needs. The next action
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management44
is to build HR processes to support these drivers. Figure 3.3 illustrates five levels
of maturity associated with the four core strategic HR processes of right people,
right things, right way, and right development. Higher levels of maturity increase
business execution capability but also require more resources and effort to
achieve. Companies do not need or necessarily want to be at the highest levels of
maturity for each of the 4R strategic HR processes. Understanding a company’s
current maturity levels and how these relate to its business execution provides a
framework for prioritizing the development and integration of HR methods.
3.5.1 Right People Maturity Levels
Ensuring you have the right people begins with creating processes to efficiently
fill open positions. Level 2 focuses on building assessments to ensure you are
hiring high performers. Level 3 shifts the emphasis from screening candidates to
building internal and external talent pools of qualified applicants. Level 4 moves
from building general talent pools to making specific forecasts around the num-
ber of people you need to hire to fill different positions and when you will need
them. This sets the stage for level 5: building talent pipelines to efficiently and
effectively put the right people in the right jobs at the right time.
Figure 3.3
Levels of Strategic HR Process Maturity
Level 5 Building talent
pipelines
Operational Influential
Maintaining
talent pipelines
Level 4 Forecasting
future talent
needs
Coordinated
effort
Calibrated Carreer growth
Level 3 Building talent
pools
Meaningful
goals
High impact
Business-driven
development
Level 2 Selecting high
performers
Aligned
goals
Well defined
Targeted
development
Level 1 Filling open
positions
Tangible
goals
Consistent
Individual devel-
opment planning
Right People
Right
Things
Right Way
Right
Development
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 45
3.5.2 Right Things Maturity Levels
Making sure employees are focused on the right things begins with ensuring that
employees have well-defined goals. Do not underestimate the business value of
achieving this level. Simply getting managers to sit down with their employees
and map out clear goals and expectations is a major leap forward for many orga-
nizations. Level 2 focuses on ensuring that employees’ goals are aligned with the
company’s overall strategy. This is typically done through some form of goal-
cascading process. Level 3 shifts the focus from setting goals that are important
to the company to setting goals that are meaningful to employees. This requires
using methods to ensure that employees see goals as relevant to their personal
career aspirations. Level 4 focuses on building collaboration within the company
around common types of goals. It is about breaking down silos and coordinat-
ing efforts across peers and departments. Level 5 emphasizes getting business
leaders to use goal processes as tools for running and managing the business.
As one operations leader put it, “You are using goal management correctly when
it ceases to become a tool for personnel administration and becomes a tool for
strategy communication.”
3.5.3 Right Way Maturity Levels
Ensuring employees are doing things the right way requires defining, commu-
nicating, and measuring their performance. Performance evaluations are then
used to inform development discussions and staffing and pay decisions. The
basis of accurate measurement is consistency, the lowest level of maturity. It
requires making sure employee performance is evaluated using consistent, stan-
dardized methods. Level 2 emphasizes creating clear performance definitions,
competency models, and goal criteria to guide performance evaluations. Level
3 focuses on using performance data so it affects decisions related to employee
pay, development, and staffing. Level 4 emphasizes the use of calibration pro-
cesses that get managers across the organization to agree on common levels of
performance expectations and employee evaluations. At level 5, business lead-
ers leverage performance management data to gain insight into the workforce
itself—for example, determining what competencies are most relevant to success
in different roles, assessing the overall strengths and weaknesses of the work-
force, and identifying actions that can be used to increase overall workforce
productivity.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management46
3.5.4 Right Development
Right development emphasizes the use of career and succession management to
build the overall capabilities of the workforce. The lowest level is simply making
sure employees have discussed development needs with their managers and have
some form of development plan. Level 2 focuses on guiding employee develop-
ment to build specific organizational capabilities or prepare employees for cer-
tain job roles. This requires guiding employee development based on future
business needs. Level 3 emphasizes having managers staff jobs and assign goals
in a way that stretches employees to develop new skills and capabilities. Level 4
shifts the time horizon into the future by providing employees with guidance on
identifying and achieving long-term career objectives within the organization.
Level 5 is about actively integrating employee development with workforce plan-
ning and staffing to maintain a steady supply of high-performing talent in key
jobs across the company.
Organizations do not necessarily need to master lower levels of maturity to
achieve higher levels. But maturity levels do tend to build on one another some-
what like the stories of a building. The stronger the foundation of the lower sto-
ries is, the more stable the higher levels will be. For example, it is difficult to
make influential decisions using performance management data (level 5 of “right
way”) if your company does not have well-defined performance definitions and
consistent processes for evaluating employee performance (levels 1 and 2).
3.6 INTEGRATING STRATEGIC HR PROCESSES
I have now explained the fundamental 4R strategic HR processes and discussed
their relationship to business execution drivers. I have also outlined different
levels of HR process maturity that companies may strive for based on their busi-
ness execution needs. But I have not specifically addressed the issue of HR pro-
cess integration. The phrase integrated HR is often bandied about as something
every company should aspire for, but it is rarely defined.
Integrated HR requires coordinating the 4R processes of right people, right
things, right way, and right development. Examples include blending right things
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 47
and right development by assigning employees business goals that enable them to
develop new capabilities or blending right people and right way by using perfor-
mance management evaluations to guide internal staffing decisions. Integrating
HR processes is important for at least three reasons:
• Optimization. Increasing the maturity level of one HR process often requires
leveraging techniques or data from other HR processes. You cannot fully
optimize any of the four strategic HR process without incorporating ele-
ments from other processes. For example, level 3 of right development is
called “business-driven development.” This level is achieved by using business
goals (right things) and job assignments (right people) to support employee
development.
• Coordination. Employees become frustrated when they experience uncoordi-
nated HR processes within the same company. As one vice president of oper-
ations memorably told me, “The only thing that integrates our HR processes
is the poor victim, I mean employee, subjected to them.” Different strategic
HR processes should use common tools, models, and terminology so man-
agers and employees can transfer knowledge learned from one process to
another—for example, using the same competency model to support staffing,
performance management, and succession management.
• Efficiency. Integrating HR processes enables companies to be more efficient
in collecting talent management data, developing and supporting HR tech-
nology, and training employees. It allows companies to reuse elements of one
process to support other processes. Examples are having goal management
data (right things) feed into the processes used for performance management
(right way) and succession management (right people and right develop-
ment), or using the same technology platform to support setting goals, eval-
uating performance, rewarding and compensating employees, and creating
development plans.
Figures 3.4 and 3.5 illustrate how the four core strategic HR processes
integrate with one another. Figure 3.4 uses a pyramid to illustrate that as tal-
ent management processes become more mature, they also become more
integrated. You cannot get to the top of a pyramid by building just one side.
Similarly, you cannot achieve the highest levels of strategic HR process maturity
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management48
by focusing on a single process. This is why it is important to draw on multiple
strategic HR functions when developing long-term HR strategies. For example,
if you are focusing on increasing staffing effectiveness maturity (right people),
be sure to include the people who manage development and succession manage-
ment (right development) because the work they do will either enable or con-
strain the ability of the company to attract high-quality candidates and build
talent pools.
Figure 3.5 illustrates the notion of process integration in more detail by com-
paring the maturity levels associated with right people and right development.
At the lowest level of maturity, these two processes are independent. Methods
used to ensure that employees have individual development plans may have little
to do with the methods used to efficiently fill open positions. This changes as
process maturity increases. At level 2, both processes focus on hiring or devel-
oping people based on well-defined job performance requirements. Level 3 for
right people and right development emphasizes building talent pools within
the organization to support future business needs. Level 4 requires the devel-
opment of long-term models that forecast future workforce needs and career
opportunities. And at level 5, the two processes blend into a single process that
orchestrates staffing and development activities to maintain a steady supply of
high-performing talent in critical job roles.
Ri
gh
t
Th
in
gs
→
R
ig
h
t
W
a
y
→
←
Right People
←
R
ig
h
t D
e
v
e
lo
p
m
e
n
t
Figure 3.4
Integrated Talent Management
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
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Business Execution and Strategic HR 49
When building a strategic HR road map or vision, it is important to think
about long-term structural integration points between different HR processes.
Otherwise you can inadvertently create incompatible processes that prevent
achieving higher levels of HR maturity. Following are six critical integration
points to consider when developing a strategic HR road map. These are certainly
not the only points of integration, but they are major ones to keep in mind:
1. A single system for employee record keeping. As you build out HR systems,
focus on creating a single system that incorporates data from each of the
4R strategic HR processes. This will make it much easier to collect data in
one process and then use these data to support other processes.
2. Common definitions of job performance. Build job descriptions, compe-
tency models, and goal plans that can effectively support multiple strate-
gic HR functions. Think how job performance data will be used to provide
employees with developmental feedback, determine pay increases, and
guide staffing and promotion decisions. Emphasize the use of standard
Integrated
Talent
Pipelines
Career
Paths
Talent
Forecasts
Business-Driven
Development
Building
Talent Pools
Targeted
Development
Individual
Development Plans
Filling
Open Positions
SiloedSiloed
Selecting
High Performers
Ri
gh
t D
ev
el
op
m
en
t →
←
Right People
Figure 3.5
Integrated Talent Management Example: Right Development
and Right People
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
Created from ashford-ebooks on 2020-03-31 02:40:48.
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Commonsense Talent Management50
competency frameworks and skill taxonomies that can be used for staffing,
performance evaluation, and development.
3. Integrated personnel decision-making processes. Review information col-
lected across all four strategic HR processes and think about the role it
should play in pay, staffing, and development decisions. For example, you
may want to consider an employee’s past record of career development
when evaluating his or her potential for future job roles. Similarly, there
is value in examining the kinds of goals employees have achieved when
deciding their pay level. Always strive to collect information once and use
it multiple ways.
4. Shared talent databases. Develop databases that can be accessed by multiple
people to answer a variety of questions related to maximizing workforce
productivity. Examples are tools that give recruiters access to succession
data so they can find internal employees to fill open positions or combin-
ing performance management data, staffing data, and career develop-
ment data to identify what competencies and development interventions
are associated with promotions. The most effective talent databases inte-
grate administrative HR data with strategic HR data (see the discussion:
“HRIS Platforms and Workforce Analytic Applications: The Gas and Oil of
Integrated Strategic HR Technology”). When building these databases, it is
also important to develop guidelines around data access and security.
H R I S P L A T F O R M S A N D W O R K F O R C E
A N A L Y T I C A P P L I C A T I O N S : T H E G A S A N D O I L
O F I N T E G R A T E D S T R A T E G I C H R T E C H N O L O G Y
Strategic HR involves developing processes to ensure a company hires the
right people, gets them doing the right things the right way, and pro-
vides them with the right development. Each of these processes benefits
from using different types of specialized HR technology—for example:
• Right people: Search engines and staffing tools that help companies
find and hire employees with the attributes needed to succeed in
different jobs
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
Created from ashford-ebooks on 2020-03-31 02:40:48.
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Business Execution and Strategic HR 51
• Right things: Goal management systems that allow companies to
quickly communicate and coordinate job objectives across the orga-
nization to ensure people are focused on the right things
• Right way: Performance management systems that enable managers
to accurately evaluate employees and provide feedback and rewards
to increase their effectiveness
• Right development: Learning management and development systems
that help employees acquire the knowledge, skills, and experiences
to perform their jobs and advance to positions with increasing levels
of responsibility
These four core areas of strategic HR can be thought of as the sides
of a pyramid. At low levels of process maturity, the processes are rel-
atively independent. But at high levels these processes become highly
intertwined. Figure 3.6 illustrates this concept.
HRIS Platform Data
Ri
gh
t
Th
in
gs
→
R
ig
h
t
W
a
y
→
←
Right People
Workforce Analytics
←
R
ig
h
t D
e
v
e
lo
p
m
e
n
t
Figure 3.6
The Relationship of Strategic HR Technology, Workforce
Analytics Technology, and HRIS Technology Platforms
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
Created from ashford-ebooks on 2020-03-31 02:40:48.
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Commonsense Talent Management52
Strategic HR technology plays a crucial role integrating different HR
processes as they reach higher levels of maturity. For example, HR tech-
nology makes it possible to enroll newly hired employees automatically
into training programs needed to perform their jobs. The technology
also makes it possible to link performance management assessments to
career development systems so employees are directed to specific learn-
ing resources based on their performance strengths and weaknesses.
These data can then be fed into succession management systems used
to identify and track potential future leaders within the organization.
Figure 3.6 also shows how two additional technology systems, HRIS
(human resource information system) platforms and workforce analyt-
ics systems, affect the four main areas of strategic HR. These additional
systems are not always focused on strategic HR, but they have an influ-
ence on strategic HR processes similar to how gas and oil influence the
performance of an engine.
HRIS platforms are a form of computer technology used to sup-
port administrative HR tasks such as processing compensation, storing
employee records (e.g., name, address), and tracking organizational
data about employees such as job title and reporting relationships.
These systems contain critical information—employee names, job titles,
and salaries, for example—but tend to contain little information about
what these employees actually do, how effectively they do it, or what
potential they have to do other things in the future.
Because HRISs are tied to ongoing operations such as payroll and
benefits, many of the data in these systems undergo considerable qual-
ity control to ensure they are accurate. HRISs usually contain the most
up-to-date information about who is working in the company, where
they live, and how much they are paid. But these data are relatively
uninteresting in terms of telling us about employee productivity or
potential. In contrast, strategic HR systems contain significant informa-
tion about employee performance and potential. But data in strategic
HR technology systems tends to be less current and accurate than data
in HRISs. This is because most strategic HR processes like performance
management occur less frequently and do not have the near-term oper-
ational impact of administrative HR tasks like payroll processing.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
Created from ashford-ebooks on 2020-03-31 02:40:48.
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Business Execution and Strategic HR 53
Historically, HRIS and strategic HR systems operated independently
with limited data transfer. But companies are increasingly using tech-
nology platforms that support both HRIS and strategic HR functions.
This is helping to create the best of both worlds by giving companies
detailed workforce data that are administratively accurate and strategi-
cally informative.
Workforce analytics systems are technology applications that access,
manipulate, and analyze data about employees to gain insights into
workforce productivity, staffing levels, and other factors affecting work-
force quality. These applications act as pipelines and dashboards that
integrate data from several locations to create different pictures of an
organization. Workforce analytics systems, for example, integrate HRIS
and strategic HR data to generate reports showing level of turnover
based on job function, employee performance, and salary or run models
that show projected future staffing demands based on historic turnover
rates taking into account the depth of internal talent pools and talent
levels found in external labor markets.
Many of the data used by workforce analytics applications come
from strategic HR technology and HRIS. Linking workforce analytics
applications, HRIS and strategic HR technology allow companies to fully
leverage the insights that can be gained from analyzing HR data. This
increases the value, visibility, and use of strategic HR processes overall.
For example, imagine a company used workforce analytics applications
to track turnover levels of high-performing employees participating in
high-potential development programs. If the company discovered that
participation decreased turnover, they could leverage the strategic HR
processes that provided these data to enroll more employees in the
programs.
HRIS data can be thought of as the gas that fuels strategic HR pro-
cesses by providing more complete and up-to-date information about
employees. Workforce analytics applications can be thought of as the
oil that makes strategic HR methods run in more efficient and inte-
grated fashion. Linking these three types of systems together creates a
sum that is greater than its parts.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management54
5. Single operational dashboards. Determine what sort of HR data will
provide the most value to business leaders and present them on a
single data display or dashboard. HR data are usually more interest-
ing when presented in combination with financial or operational data.
Think through what data will be most interesting to business leaders
and how to display them so they lead to meaningful insights. This is
critical to achieving the highest levels of talent management maturity.
Having this end in mind is also important for ensuring that you collect
the necessary data in the right format. For example, rather than show-
ing overall turnover rate or the percentage of employees rated as high
performers, it is more informative to show the turnover rate of employ-
ees who are rated as high performers. Rather than showing average
performance ratings in different divisions, present a comparison of the
financial performance of divisions with average performance ratings in
each division.
6. Integrated compensation and staffing strategies. The most visible actions
companies make related to workforce management are those around hir-
ing, promotions, terminations, and pay (see the discussion: “Pay and
Promotions: The Ultimate Expression of Company Values”). Think about
how your company makes pay and staffing decisions. Is it about being in
the right job, achieving the right things, doing things the right way, focus-
ing on the right development, or some balance of all four? Does it balance
elements of what jobs people are in, what they have accomplished, how
they act, and what they are doing to develop their capabilities? Or does it
disproportionately emphasize one of the four aspects of strategic HR? For
example, some companies base promotions almost entirely on past perfor-
mance with little emphasis on using staffing to support employee develop-
ment. Many companies base pay primarily on goal accomplishment, with
much less attention paid to how these goals were achieved. Overly empha-
sizing some elements of talent management while underemphasizing oth-
ers is not necessarily bad. In fact, it may make sense for many jobs. But
whether good or bad, the highly visible nature of compensation and staff-
ing decisions will either reinforce or undermine a company’s commitment
to integrating different elements of strategic HR for building and reward-
ing the workforce.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 55
Paying attention to these integration points reduces the risk of creating HR
processes that are overly siloed and potentially incompatible or that contradict
one another. Always ask, “How could the process I’m designing influence or
benefit from integrating with other processes?” Creating an integrated HR steer-
ing committee and establishing a single strategic HR coordinator can also help
to create processes that employees and operations leaders will see as seamless,
well-coordinated, and coherent.
P A Y A N D P R O M O T I O N S : T H E U L T I M A T E
E X P R E S S I O N O F C O M P A N Y V A L U E S
Nothing says more about what a company truly values than the deci-
sions it makes around hiring, promoting, and financially rewarding. These
represent concrete actions to invest in some people over others based
on their perceived value to the company. When a company promotes or
compensates an employee, it is implicitly saying, “We value this person so
much that we have decided to give him more money, responsibility, and
power regardless of what shortcomings he may have.” Ideally promotions
and pay are based on a systematic and careful review of what the per-
son has accomplished, how he acts within the company, and his progress
against business objectives. In these cases, promotions and pay under-
score the company’s commitment toward its stated values and strategies.
But all too often promotion and pay decisions are made hastily, focus on
short-term operational needs, or are used to prevent people from quit-
ting rather than rewarding their contributions to the company. Frequently
they overemphasize one aspect of performance while ignoring others.
Promotions and pay decisions made in these situations often result in
sending a message to employees that the company may say it values cer-
tain behaviors but what it truly rewards is something else entirely.
Promotion decisions probably have the most impact because they are
highly visible to everyone in the organization. When employees see one
of their peers get promoted, they immediately draw conclusions about
why this person was rewarded. They will view it as an implied endorse-
ment that all of the things this person did, both good and bad, are val-
ued, accepted, or tolerated by the company. It does not matter if these
conclusions are accurate because perception is reality.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management56
3.7 CONCLUSION
Companies are most likely to achieve their business objectives when they do the
following things well:
• Get the right people in the right jobs. Staff positions with employees whose
attributes match the demands and requirements associated with job goals and
competencies. This is the primary focus of recruiting and succession planning.
• Focus them on the right things. Clearly identify and communicate the goals
they want employees to achieve; then measure and reward employees
against these goals. This is the focus of goal management and variable pay.
• Ensure they do things the right way. Define the competencies employees must
have to achieve their job goals and evaluate and reward employees based on
the degree to which they demonstrate these competencies. This is the primary
focus of performance management and merit pay.
• Provide them with the right development. Create a work environment that
helps employees develop attributes that support the competencies that drive
goal accomplishment. This is the primary focus of career development and
succession management.
Effective strategic HR develops these four fundamental processes to support
the company’s most important business execution drivers, basically a three-step
process:
1. Understand your company’s business objectives. What are the most criti-
cal commitments the company must fulfill to meet the expectations of its
Nothing says more about what a company truly cares about than pay
and promotion decisions. What systems does your company have in place
to ensure these decisions reflect its stated values? Do people understand
how pay and promotion decisions are made? Is the process transparent,
or are employees left to make up their own reasons for why some people
were rewarded while others went unrecognized? Are you certain that
your company is honestly putting its money where its mouth is?
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Business Execution and Strategic HR 57
shareholders? The only way to answer this question is to spend time talk-
ing with operations leaders about what business goals are top of mind for
them.
2. Define how these business objectives tie back to key business execution
drivers. Engage line leaders in a discussion around the following ques-
tions: “To achieve our business objectives, what sort of employees do we
need, and what must they accomplish?” and, “What do we need people
to do tomorrow that they are not doing today?” How will the company
need to change its workforce in order to meet its strategic commitments?
What will people need to do in the future that they are not doing now?
Will the company need to add talent to the workforce that it does not cur-
rently have? Answering these questions will help determine which of the
six business execution drivers are most critical to achieving the company’s
business strategy.
3. Implement the appropriate strategic HR processes to support the key business
execution drivers. Determine which of the 4R processes will have the most
impact on the business execution drivers that are critical to your company.
Assess the current maturity level of these processes, and determine what
improvements will have the greatest influence on your company’s ability to
execute its strategies. Do not be afraid to drive change, but limit change
to things that will make a significant difference to the company’s strategic
success. Emphasize the use of integrated, efficient processes and technol-
ogy to ensure you achieve the maximum value with the least disruption to
ongoing business operations. Finally, communicate the business reasons
for adopting more effective strategic HR processes. Make sure HR pro-
cesses are viewed as tools to drive business execution and are not merely
seen as additional administrative tasks.
The remainder of this book discusses critical design questions related to using
the four fundamental HR processes to support your company’s unique business
execution needs. The emphasis is on using HR processes as tools for business exe-
cution as opposed to administrative compliance. We have the knowledge and tools
needed to use strategic HR processes to drive business execution. It is up to us to
make it happen.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management58
NOTES
1. Starting in 2008, SuccessFactors began investigating the underlying busi-
ness reasons that led to decisions to invest in strategic HR technology. This
involved asking companies to explain what had led them to invest time,
money, and other resources to deploy technology-enabled strategic HR
processes. This work led to the identification of the six business execution
drivers presented here.
2. Span of control refers to the number of employees reporting in to a manager. A
manager who has five employees reporting to her has a span of control of five.
3. This includes continuing to work for the company. Increasing retention and
managing turnover are major issues related to business execution, particu-
larly the business execution drivers productivity, sustainability, and scalability.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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10
1
Doing the Right Things
Becoming a Goal-Driven Organization
Focusing people on the right things is basically about good goal management, which is among the most powerful methods com-
panies have to execute business strategies. Hundreds of studies have
examined the impact of goal management on workforce productiv-
ity (see the discussion: “Goal-Setting Theory and Research: A Three-
Hundred-Word Summary of More Than One Thousand Empirical
Research Articles”). The common finding from this research is this:
Employees assigned specific, difficult, yet achievable goals consistently
outperform employees who are given no goals or nonspecific goals
encouraging them to “do their best.”
F I V E
c h a p t e r
G O A L – S E T T I N G T H E O R Y A N D R E S E A R C H : A
T H R E E – H U N D R E D – W O R D S U M M A R Y O F M O R E T H A N
O N E T H O U S A N D E M P I R I C A L R E S E A R C H A R T I C L E S
There are relatively few widely accepted truths in the field of industrial-
organizational psychology. But one finding that is almost universally
agreed on is that employees who are assigned specific, difficult, yet
achievable goals consistently outperform employees who are given no
goals or nonspecific goals encouraging them to “do their best.” This
finding was not arrived at without considerable controversy and empiri-
cal investigation. More than one thousand empirical, peer-reviewed
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management102
research articles have been published on the topic of goal management
and its impact on employee performance. People have examined almost
every aspect of goal setting, ranging from the optimal number of goals
employees should have to whether the value of goals varies depend-
ing on an employee’s personality traits. Hundreds of studies have been
conducted to test the boundaries of goal setting and find places where
goals may not work well. This research has identified goal-setting tech-
niques that enable or limit goal effectiveness and certain situations that
mediate the value of goals, but the fundamental premise of goal-setting
theory has remained intact: if you want to maximize employee perfor-
mance, invest time in setting clear employee goals.
Following are some of the more influential publications in the field
of goal-setting research—just the tip of the iceberg when it comes to
this research topic:
Kanfer, R., Chen, G., & Pritchard, R. D. (2008). Work motivation: Past,
present, and future. London: Routledge.
Kernan, M. C., & Lord, R. G. (1990). Effects of valence, expectancies, and
goal-performance discrepancies in single and multiple goal environ-
ments. Journal of Applied Psychology, 75, 194–203.
Klein, H. J. (1991). Further evidence on the relationship between goal
setting and expectancy theories. Organizational Behavior and Human
Decision Processes, 49, 230–257.
Latham, G. P. (2004). The motivational benefits of goal-setting. Academy
of Management Executive, 18, 126–129.
Locke, E. A., Chah, D. O., Harrison, S., & Lustgarten, N. (1989). Separating
the effects of goal specificity from goal level. Organizational Behavior
and Human Decision Processes, 43, 270–287.
Locke, E. A., & Latham, G. P. (1990). A theory of goal setting and task
performance. Englewood Cliffs, NJ: Prentice Hall.
Manderlink, G., & Harackiewicz, J. M. (1984). Proximal versus distal goal
setting and intrinsic motivation. Journal of Personality and Social
Psychology, 47, 918–928.
Seijts, G. H., & Latham, G. P. (2005). Learning versus performance goals: When
should each be used? Academy of Management Executive, 19, 124–131.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 10
3
Shaw, K. N. (2004). Changing the goal-setting process at Microsoft.
Academy of Management Executive, 18, 139–142.
Tubbs, M. E., Boehne, D. M., & Dahl, J. G. (1993). Expectancy, valence,
and motivational force functions in goal-setting research: An empiri-
cal test. Journal of Applied Psychology, 78, 361–373.
The basic concept of goal setting is so straightforward it almost seems silly:
employees are much more likely to do what you want them to do if they (1) know
exactly what it is you want them to do, (2) believe they can do it, and (c) are moti-
vated to do it. Yet virtually every employee can tell stories about jobs where they
were not sure exactly what they were supposed to do or why it mattered.
The effective use of goals can increase performance levels by 25 percent or
more.1 The financial value of goal management is staggering given the relatively
low cost associated with implementing goal management methods. Because
the value of goals is tied to fundamental psychological principles of employee
behavior, the benefits of goal management do not depend on being in a cer-
tain industry or market. Every company that employs people benefits from goal
management. Effective use of goals provides a means for:
• Setting direction. Goals clearly define what employees are expected to accom-
plish. When used correctly, they create clarity around the role and impor-
tance of a person’s job. They let employees know what it is they are supposed
to be doing and why that work is important to the company.
• Providing feedback. Goals allow employees to track their own progress. If
employees have clear goals and access to metrics that measure these goals,
they can accurately assess their performance without asking for feedback
from their managers, peers, or customers. This allows employees to self-
manage performance more effectively.
• Creating intrinsic motivation. Simply having a goal can motivate people to
accomplish it. People often draw satisfaction merely from knowing they com-
pleted a goal, that is, achieving the goal is its own reward. Goals that have this
property are said to provide “intrinsic motivation.”2
• Creating extrinsic motivation. Goals provide a means to link work accom-
plishments to other rewards, such as pay and promotions. Tying goal achieve-
ment to external rewards is referred to as increasing the level of extrinsic
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management104
motivation associated with a goal. Goals are particularly important for creat-
ing pay-for-performance processes because they provide a clear set of agreed-
on standards for determining compensation decisions.
• Building confidence. A manager who assigns an important goal to an employee
is sending an implicit signal that the manager believes the employee is capa-
ble of achieving the goal. This creates higher levels of self-confidence for that
employee, which leads that person to stronger levels of performance.3
Companies with well-designed goal management processes execute busi-
ness strategies quickly and efficiently by aligning employees around the things
that matter. Goal management also helps companies adapt to changing market
conditions by providing a means to refocus employees on new sets of priorities.
Goal management can also increase employee engagement and retention by cre-
ating a link between employees’ jobs and the broader mission and strategy of the
organization.
The question is not whether goal management methods should be imple-
mented at a company but how to best implement them. This chapter provides
guidance on using goal management to drive business execution. It also high-
lights common problems that can undermine goal management effectiveness.
Goal management is more complex than simply telling people what to do.
Effective use of goals increases employee productivity, engagement, and motiva-
tion. Ineffective use of goals can have the opposite effect.
Section 5.1 starts the chapter by discussing what it means to be a goal-driven
organization. Section 5.2 discusses how goal management fits into an integrated
talent management process and explains the relationships between goals and
other factors that drive employee performance such as skills and competen-
cies. Section 5.3 reviews eight critical design questions that should be addressed
when designing and implementing goal management processes in an organiza-
tion. Section 5.4 describes five levels of goal management maturity and discusses
methods for achieving each level.
5.1 WHAT IT MEANS TO BE A “GOAL-DRIVEN”
ORGANIZATION
Being a goal-driven organization means ensuring that all employees are focused
on achieving clearly defined goals supporting the business needs of the company.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 10
5
This is not simply a matter of communicating the company strategy to every
employee. The personal interests of individual employees should be clearly linked
to the success of the entire organization. Being goal driven requires engaging
employees at all levels of the company in meaningful discussion to identify what
they can achieve that will help execute the company’s business strategy, tying
these to their personal job interests, and then holding them accountable for the
commitments they make to support the business’s overall strategic mission.
The following characteristics are found in organizations that effectively lever-
age goal setting to drive business execution:
• All employees have clearly defined goals tailored to their specific job and linked
to the overall strategy of the company. When asked, employees can say exactly
what their goals are, when they need to be achieved, how they will be mea-
sured, and why they are important to the company’s strategy and mission.
• Managers are held accountable for setting effective goals with their direct reports
and ensuring these goals are met. The performance of managers is evaluated
based on the quality of the goals assigned to the people they manage and
whether they achieve these goals. Managers whose employees have poorly
defined goals or consistently fail to achieve the goals assigned to them are con-
sidered to be poor managers and are treated accordingly.
• Clearly defined processes are used to align strategic goals with operational goals.
Consistent methods are used to translate strategic goals related to company
profit, growth, and other business outcomes into tactical goals that specific
departments and employees must achieve to deliver on longer-term strategic
commitments.
• Performance against goals is reviewed regularly to guide operational decisions.
Goals are reviewed on an ongoing basis throughout the year to guide deci-
sions about business strategies, resource allocation, and project coordination.
Data on goal accomplishment are used to gain insight into the operational
performance of the company. This does not mean micromanaging employees
against their goals. It does mean checking in with employees to ensure they
are on track to succeed and understand what is needed to get them back on
track if they are starting to fall behind.
• Goal plans are adjusted throughout the year to reflect changes in business strate-
gies or operational tactics. Goals are updated, redefined, and recommunicated
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management106
in response to changes in business strategy that may occur throughout the
year. If the company decides to modify its direction or approach, these modi-
fications are captured in individual goal plans. Companies should also
monitor how frequently goals are changed to avoid confusion and inefficiency
caused by constantly changing direction or shifting priorities.
• Goal performance data are used to guide personnel decisions. Decisions regard-
ing pay, promotion, and staffing are based in part on employees’ performance
against past goals and discussing the relationships between people’s past goal
accomplishments and the sorts of goals they will be assigned in the future.
A quick way to evaluate whether a company has a goal-driven culture is to
ask employees to describe the link between the business strategies of the organi-
zation and their day-to-day jobs (see the discussion: “Goal-Driven Cultures and
Employee Engagement”). Employees in goal-driven organizations know what they
are supposed to be working on and why it matters to the business. They know why
their job is important. You can walk up to any employee and ask, “What are the
major things you have to get done this year to be successful in your job, and how
does this tie to the company’s overall strategy?” and that person can give you a
quick, precise answer. Employees in goal-driven cultures see a direct relationship
between how they are evaluated and the impact they have on the success of the
company as a whole. They feel connected to the strategies set by top business lead-
ers and know that their success and the company’s success are closely intertwined.
G O A L – D R I V E N C U L T U R E S A N D E M P L O Y E E
E N G A G E M E N T
The following five statements can be used to measure whether a com-
pany has a goal-driven culture. Asking employees whether they agree
with these statements provides a quick sense of the degree to which an
organization has a strong goal orientation:
1. I know exactly what goals I am expected to accomplish in my job.
2. The work that I do is well aligned with my company’s strategy.
3. Decisions about my pay and career opportunities depend in part
on how well I perform against a formal goal plan that my man-
ager and I agree on.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
Created from ashford-ebooks on 2020-03-31 02:42:32.
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Doing the Right Things 107
4. The company takes steps to ensure my goals are accurate and
appropriate.
5. My manager and I review and update my goals throughout the
year to ensure they are aligned with changes in company needs
and strategy.
These five statements are similar to survey questions frequently used
to assess employee engagement. This is because one of the primary
ways to increase employee engagement is to ensure employees have a
clear sense of purpose in their jobs and know why their work matters.a
Goals play a critical role in clarifying why employees’ jobs are meaning-
ful and important.
Effective use of goals increases the performance levels of employ-
ees and also plays a key role in increasing employee satisfaction and
retention. After implementing more effective goal management, one
company saw its employee engagement survey scores increase by 16
percent in a single year. The impact that goals had on this increase was
reflected in survey comments such as “I finally understand how I fit in
with the larger organization.”
aBuckingham, M., & Coffman, C. (1999). First break all the rules: What the world’s greatest managers do
differently. New York: Simon & Schuster.
5.2 THE ROLE OF GOALS IN AN INTEGRATED
STRATEGIC HR SYSTEM
Goal management plays a pivotal role in converting business strategies from
lofty, long-term aspirations communicated by senior leaders into tangible com-
mitments and deliverables owned by employees at all levels of the organization.
But companies often fail to maximize the value of goal management by allowing
it to become subsumed within other strategic HR processes such as performance
management or career development. This tends to occur when companies con-
fuse the management of goals with the management of learning objectives and
competencies.
To understand how goals fit into the broader field of strategic HR, let’s
revisit the three basic components of job performance introduced in chapter 2.
Increasing job performance ultimately depends on managing three things:
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management108
• Goals describe the business outcomes employees are expected to support or
accomplish (e.g., achieving sales quotas, minimizing accidents, maintaining
productivity levels, processing documents). In essence, goals define the rea-
son that a job exists. People are employed to deliver, create, complete, pro-
duce, or otherwise accomplish specific things. Goals clarify these things.
• Competencies describe the behaviors employees are expected to display on
the job—for example, building relationships, planning and organizing, solv-
ing problems, and other activities that influence success or reflect the com-
pany’s cultural values. People often distinguish goals from competencies
using the concept of “what versus how.” Goals define what a person is sup-
posed to do in the job, and competencies describe how he or she is expected
to do it.
• Attributes are characteristics of employees that are associated with job suc-
cess. They include qualifications (e.g., job experience, education, certifica-
tions), aptitudes (e.g., personality and ability traits), and interests (e.g., career
aspirations, salary preferences, work schedule expectations). Attributes define
who employees are in terms of their knowledge, skills, and abilities. The
attributes employees possess influence the competencies they display, which
determine the goals they can achieve.
The relationship of attributes, competencies, and goals can be summed up
as, “What you achieve [goals] depends on how you act [competencies], which
is largely determined by who you are [attributes].” Attributes, competencies,
and goals are managed using four fundamental types of HR processes broadly
focused on right people (staffing), right things (goal management), right way
(performance management), and right development (career management). Of
these four processes, goal management is among the most critical for driving
business alignment, productivity, and efficiency.
Goals define what employees need to accomplish for the company to be suc-
cessful. Managing employees without defining job goals is like asking someone
to enter a foot race without telling the person where the finish line is. He or she
may get there eventually but is likely to waste a lot of time and energy along
the way. Staffing, performance management, and career development make sure
you have the right people in the race and are giving them effective guidance and
motivation along the way. But goal management defines what they actually need
to accomplish to win the race.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 109
Goal management, performance management, and career development meth-
ods should complement one another but should not be treated as the same thing.
Goal management processes are used to define business goals. They should be
kept distinct from career development and performance management processes
that emphasize employee learning objectives and job competencies. An employ-
ee’s goal plan should define what the employee needs to accomplish to support
the company’s business strategies. Things related to competencies or career learn-
ing objectives should be managed as part of performance management and career
development, not goal management.
Employees frequently make the mistake of putting their learning objectives
on their goal plans. Goals define what employees must achieve in their job to
be successful. Learning objectives describe what they are doing to build their
personal attributes and capabilities to improve their performance or advance
their careers (e.g., knowledge, skills, and experience). Learning objectives are
the focus of career development processes and should not be placed on job goal
plans. At the same time, learning objectives can support the accomplishment
of job goals. Consider an example. Imagine an employee’s job requires her to
achieve the goal of “report accurate customer satisfaction scores on a monthly
basis.” In order to do this more effectively, the employee decides she needs to
“learn how to use Excel.” The job goal in this example is “report accurate cus-
tomer satisfaction scores.” “Learning to use Excel” is a learning objective because
it focuses on building the employee’s knowledge. From a business perspective, it
is reporting the customer satisfaction scores that ultimately matters, not whether
the employee did or did not learn how to use Excel. In sum, learning objectives
often define things employees must develop to be effective in their roles, but they
are different from job goals, which describe what employees must accomplish to
support the company’s strategies.
It is also important to distinguish job goals from competencies. Com-
petencies define behaviors that employees are expected to display in a job.
Goals define what people are expected to achieve as a result of displaying these
behaviors. Competencies play a critical role in driving workforce productivity,
employee development, and company culture. But it is ultimately the accom-
plishment of goals that determines whether a company achieves its strategic
business objectives. Creating performance management processes that clearly
define and evaluate job competencies ensures that people accomplish goals in
a manner that is efficient and supports the company’s norms and values. But
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management110
competencies are not the same as goals and should not be included in goal man-
agement processes.
Goal management processes should be treated as distinct from processes
used to manage competencies and learning objectives, but there is a logi-
cal connection among goals, competencies, and learning objectives. When a
company assigns goals to employees, invariably some employees will struggle
to achieve them. Companies can then use performance management meth-
ods to give employees feedback on the competencies they need to display to
accomplish their goals. This helps employees identify what behaviors they
need to change in order to succeed. Sometimes an employee’s inability to
display certain competencies will be due to a lack of skills or knowledge. In
these cases, companies can use career development programs to help employ-
ees build the attributes needed to display the competencies that drive goal
accomplishment. For example, imagine a salesperson was given the goal of
“selling 100 units in Q1.” A month into this assignment, the manager real-
izes the salesperson is not on track to achieve this goal. Upon observing the
employee, the manager realizes the employee is struggling because he is not
effectively displaying the competency “addressing customer needs.” After a
conversation with the employee, the manager learns that the employee does
not know enough about the product to answer customer questions effec-
tively. As a result of this conversation, the employee sets a learning objective
of “complete product training,” which will help him display the competency
“addressing customer needs,” which will enable him to accomplish their job
goal of “selling 100 units in Q1.”
Goals, competencies, and learning objectives have related but very distinct
roles for increasing employee performance. The most effective strategic HR
processes are designed with a clear understanding of these different roles. The
methods used to define, measure, and manage goals, competencies, and learning
objectives are significantly different from one another. Goal management, per-
formance management, and career development processes should be built and
managed as integrated but distinct activities. The rigor of keeping these three
somewhat related concepts distinct may seem somewhat trivial, but it pays off by
reducing confusion and process inefficiency. Over time, managers and employ-
ees will understand and appreciate the value of differentiating among goals,
competencies, and learning objectives.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 111
5.3 GOAL MANAGEMENT CRITICAL DESIGN QUESTIONS
All companies use some form of goal setting to direct people’s efforts on the job.
The question is not whether to set goals but how to do it effectively. To truly
leverage the power of goals, companies must put thought into designing goal
management processes that make the most sense for their particular jobs and
business needs. The following design questions are central to building fully effec-
tive goal management processes:
1. How will you ensure employees have well-defined goal plans?
2. What are you doing to ensure employees feel a sense of commitment and
ownership toward the goals they are assigned?
3. What methods are used to align employees’ goals with company business
strategies?
4. How is employee goal accomplishment measured?
5. What is the relationship between goal accomplishment and employee pay,
promotions, and recognition?
6. How are goals used to support employee development and career growth?
7. How does the organization coordinate goals across different employees to
foster communication and collaboration?
8. How are goals used to guide business execution on an ongoing basis?
The answers to these questions depend on your company’s business strategies,
the nature of its workforce, and its talent management processes. The correct
answer to each question can vary considerably from organization to organiza-
tion. Failure to address any of the questions can result in a suboptimal goal man-
agement process.
5.3.1 How Will You Ensure Employees Have
Well-Defined Goal Plans?
Research has shown that employees often struggle to understand exactly what it
is they are expected to do when they show up on the job.4 This lack of goal defi-
nition decreases employee productivity and retention, increases anxiety around
role clarity and value, and raises the potential for internal conflict and organi-
zational politics around responsibilities and accountability. In fact, the survey
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management112
question, “I know what is expected of me at work,” strongly correlates with
employee engagement and employee turnover. The most direct way to address
problems caused by lack of clear goals is to ensure employees and their man-
agers sit down on a regular basis to define the goals employee are expected to
accomplish.
The simple action of requiring managers to meet with employees to estab-
lish goal plans drives tremendous value for business execution. It forces manag-
ers to engage with employees around what actions and accomplishments should
take priority in their jobs. By establishing clear expectations, goals increase pro-
ductivity in the near term and set the foundation for fairer and more effective
conversations and decisions related to talent management later (e.g., on com-
pensation and promotions). Tracking whether employees have goal plans also
provides a metric for evaluating if managers are performing the most basic part
of their job: talking with employees about what they should be doing. In fact,
there is a positive correlation between the frequency with which managers work
with their employees to maintain goal plans and financial metrics reflecting
overall company performance.5
Two things need to be considered when designing processes to ensure
employees have well-defined goal plans. First, managers and employees should
be given clear guidelines on what a well-defined goal plan looks like. Second,
managers and employees need to set goals in a manner that gives employees a
sense of ownership and accountability toward achieving them.
Creating a Well-Defined Goal Plan Many employees do not think of work
in terms of discrete, well-defined goals. Even highly experienced employees
can find it difficult to summarize their roles in terms of a short list of succinct,
well-defined, and measurable objectives. Fortunately, there are at least three
ways to help employees create well-defined goal plans: (1) provide goal librar-
ies, (2) communicate criteria for creating and evaluating goal plans, and (3) train
employees on goal setting methodologies.
Goal libraries are databases containing common goals and goal plans asso-
ciated with different types of jobs. An example from a goal library is provided
in figure 5.1. Goal libraries can be an effective starting point for crafting goals,
although library goals often need to be modified to fit an employee’s specific job
or role. The challenge to using goal libraries is they can take considerable effort
to create and can be difficult to maintain over time.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 113
Another method for creating well-defined goals is to provide employees and
managers with clear criteria and frameworks for creating and evaluating goal
plans. Table 5.1 provides a set of criteria for developing goal plans and addresses
common problems found in employee goal plans. Providing simple sets of rules
and recommendations like those in table 5.1 leads to the creation of more con-
sistent goal plans across the company and helps employees to develop and cri-
tique their goals without having to rely on extensive input from others.
Most of the criteria in table 5.1 are relatively uncontroversial, but there is one
possible exception that warrants a bit more discussion. This is the guideline to
“have at least five goals and no more than ten.” Empirical research suggests the
optimal number of goals on an employee goal plan is around eight.6 My own
experience suggests that most jobs cannot be adequately described in fewer than
five goals. When people try to describe a job in fewer than five, they either leave
out important aspects of their work or combine different goals into less clearly
defined, broad categories of “general things they have to do.” Employees who
have more than ten goals may be focusing on too many things. The purpose of
goal plans is to describe what employees need to keep in mind as they go about
Figure 5.1
Example of Contents from a Goal Library
Source: SuccessFactors, an SAP Company, used with permission.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management114
Table 5.1
Some Simple Goal-Setting Guidelines
Have at least five goals and no more than ten,
• Do not oversimplify what you actually do; get credit for your
contributions!
• Focus on what matters the most; don’t try to catalogue everything you do.
• You should be able to quickly list all the goals on your goal plan from
memory.
Goals define the things you are here to do; they explain why your job exists
and why it is important.
• Even if someone never actually saw you work, he or she should be able to
use your goals as evidence of the contributions you make to the company.
Define goals to be independent of each other.
• It should be possible to achieve one goal without achieving another.
Do not list personal learning objectives in your
goal plan.
• Goals can (and should) drive personal development, but they must reflect
business needs.
• Example: instead of listing a goal like, “Learn to use Microsoft Excel,”
write the business needs driving this learning objective, such as, “Support
project X, which will require learning Microsoft Excel.”
Personalize cascaded goals to your job.
• Change the names of cascaded goals; make them relevant to your role.
• Tasks or deliverables associated with the goals cascaded to you by your
supervisor may become your actual goals.
• You may create several different goals on your goal plan to support a
single goal cascaded to you by your supervisor.
performing and planning their day-to-day work. They should be able to easily
recite all their goals from memory. And a well-known finding from psychol-
ogy is the number of items on a list that people can easily commit to memory is
between five and nine (often referred to as the “7 plus or minus 2” rule in intro-
ductory psychology classes).7
Some employees resist reducing their goal plans to fewer than ten goals. I
have seen goal plans with over thirty different goals listed for a single employee!
When this happens, it is usually because the employee has confused goals with
tasks. Goals are outcomes, accomplishments, or responsibilities people need
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 115
to fulfill to be effective in their jobs. Tasks are activities they perform to achieve
these goals. For example, a goal might be, “Install a new heating system.” Tasks
for this goal might include things like “create a list of system specifications” and
“review proposals from vendors.” Some employees list all the tasks they intend
to perform as separate goals, which can lead to the creation of very lengthy goal
plans. Although it may be useful to describe the tasks a person plans to accom-
plish to achieve a goal, tasks are not what the company truly cares about. Tasks
are a means to an end but not the end unto itself. To use a sports analogy, the dif-
ference between tasks and goals is like the difference between executing plays in
football and scoring points. At the end of the day, achieving points is what mat-
ters, not the number of plays run.
A third method for establishing effective goal plans is to provide employ-
ees with a framework for writing and structuring goals. The most common
framework is to teach employees how to set goals that are SMART: Specific,
Measurable, Achievable, Relevant, and Time-Bound (see the discussion: “Making
a Goal Plan SMART”).
M A K I N G A G O A L P L A N S M A R T
The acronym SMART describes a method for ensuring that goals agreed
on by managers and employees are well defined and clearly under-
stood. To be SMART, a goal must be:
Specific: The details of the goal are defined so that its achievement can
be objectively determined. Whether a goal is accomplished should not
depend on someone’s subjective evaluation; it should be based on
tangible, observable facts and outcomes. Goals should be defined at a
specific enough level so that there will be little debate about whether
the goal was or was not achieved.
Measurable: The definition of the goal includes a list of one or more met-
rics or criteria that can be used to evaluate if the person is on track to
accomplish the goal. Ideally, metrics are quantifiable measures such as
percentages or numbers, for example, “achieve 95 percent uptime on
service delivery” or “closed five new contracts in my region.” But they
can also be qualitative indicators of goal achievement, for example,
“installed a new software system” or “completed a training course.”
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management116
The following story illustrates how the SMART criteria can guide the creation
of goals. Imagine that a retail store manager asked a frontline clerk to set a goal
for the coming year. The employee responded with a goal “to improve my per-
formance.” This goal does not meet any of the SMART criteria. So the manager
and employee reviewed the following questions to make the goal SMART:
• Is it specific? “Improve my performance” is not a specific enough goal to be veri-
fiable. Whether the employee’s performance has improved will depend on what
is meant by performance. Is improving performance a matter of better atten-
dance, sales, customer service, attention to detail, or something else? To make
the goal more specific, let’s assume that the manager and employee rewrote the
goal as, “Improve my performance delivering service to store customers.”
• Is it measurable? The goal “improve my performance delivering service to store
customers” is reasonably specific, but does not define how to measure achieve-
ment of the goal. To address this, the manager and employee expanded the
goal to, “Improve my performance delivering service to store customers as
demonstrated by a significant increase in customer survey scores collected dur-
ing my shift.”
• Is it achievable? Determining whether a goal is achievable requires the man-
ager and employee to reach agreement between what is desired by the business
and what the employee thinks is possible. Employees should be encouraged to
strive for goals that they view as difficult but achievable. These types of goals
have been shown to create the highest levels of performance. For example, the
Attainable: The goal can realistically be accomplished. The skills, resources,
and tools needed to achieve the goal are available to the employee,
and it is reasonable to expect the employee to achieve the goal suc-
cessfully. This does not mean the goal will be easy to accomplish, but
that it is realistic to expect that the employee can accomplish it.
Relevant: The goal should support the overall strategy and mission of
the company. It reflects things the person is expected to do as part
of their job.
Time-bound: The goal definition should include specific milestones and
deadlines for its accomplishment. Specific dates are agreed on for
determining whether the goal has or has not been achieved.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 117
manager may want customer satisfaction survey scores to increase by 10 percent,
but the employee may feel that such an increase depends on too many factors
they cannot control. The employee may argue for a 1 percent increase, but the
manager may view this as too easy to achieve. For the purpose of this illustra-
tion, let’s assume the manager and employee agree on setting the goal as a 5
percent increase in customer survey scores because this number is felt to be
difficult but realistic to attain by both the manager and employee.
• Is it relevant? This means making sure the goal is associated with the employ-
ee’s job duties and the company’s overall business strategy. Improving cus-
tomer service is relevant to the job in this example. But it might not be
considered relevant if the employee worked in a noncustomer-facing role in a
distribution center.
• Is it time-bound? This means making sure there is a specific date when the
goal is expected to be completed. The manager and employee need to
agree on a date when they will formally review the goal to see if it has been
achieved. This can be done by expanding the goal to this: “Improve my per-
formance delivering service to store customers, demonstrated by achieving a
5 percent increase in customer survey scores collected during my shift by the
end of Q4 of this year.”
When a goal lacks any of the five SMART criteria, employees are at risk of not
fully understanding what it is they are expected to do or how their success will be
evaluated. By going through a process of discussion, the manager and employee
in this example were able to translate the non-SMART goal of “improve my per-
formance” to a difficult but achievable SMART goal of “improve my performance
delivering service to store customers demonstrated by achieving a 5 percent
increase in customer survey scores collected during my shift by the end of Q4 of
this year.”
Although the SMART framework is probably the most widely used, I have
found it to be less effective than another framework called the COD model:
Commitments, Outcomes, and Deliverables (see the discussion: “Commitment,
Outcome, Deliverable (COD) Goal Methodology”). All of the major con-
cepts associated with the SMART framework are incorporated into the COD
model. But they are presented in a way that is simpler and reflects how employ-
ees and managers actually discuss goals. Managers are encouraged to talk
with employees about what commitments they can make to support business
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management118
initiatives, the deliverables they will meet to fulfill each commitment, and the
business outcomes this will create.
The discussion provides guidance for using the COD method to set goals. An
additional advantage of the COD framework is how well it supports the con-
cept of goal cascading, which will be discussed later in the chapter. People are
instructed that a deliverable at one level in the organization may be reframed as
a commitment at the next level down. This has proven to be useful in helping
people better understand how to leverage goal processes to communicate and
align employees around new business initiatives.
The most important point is not whether you use goal libraries, SMART
goals, COD goals, or some other goal-setting framework. What is important is
to provide employees and managers with some method to ensure they are set-
ting well-defined and appropriate goals.
Goal setting is somewhat like riding a bike. It is not hard to learn, but if you
don’t do it correctly, you can hurt yourself. Furthermore, if you ask managers
and employees if they know how to set goals they will probably say yes. But
this does not mean they know how to do it well. The following are examples of
actual goals I have seen on goal plans created by managers and employees who
purported to know how to set goals: “to lose ten pounds by December,” “to get
along with others,” “to hit our revenue targets,” or “to increase my performance.”
With the exception of losing ten pounds, none of these goals meets the criteria
of being well defined. And the only one that was well defined was not job rel-
evant (at least not for the job this employee held). The lesson is that it is very
important to provide managers and employees with clear criteria and methods
for setting goals or people will waste a lot of time writing goals that are not well
defined, job relevant, or motivational.
C O M M I T M E N T , O U T C O M E , D E L I V E R A B L E
( C O D ) G O A L M E T H O D O L O G Y
Your goal plan, which defines what you are responsible for doing within
the organization to support the company’s business needs, should consist
of five to ten specific commitments you have made to support the strate-
gic needs of the organization. Each commitment will be associated with
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 119
a variety of specific outcomes and deliverables. The following guidelines
will help in building out your goal plans.
Commitment: What I’m Doing
• Develop a short phrase that describes what you are doing and why it
is relevant to the business.
• Customize commitments to your particular role; they should define
what you specifically do in the company.
• Identify five to ten different commitments, each associated with one
or more outcomes and deliverables.
• Link all commitments to commitments on your manager’s or other
people’s goal plans so they directly or indirectly roll up to the CEO’s
goal plan.
Outcomes: Why I’m Doing It
• Identify the results you will create by achieving this commitment,
that is, the evidence that will demonstrate you were successful.
• Try to have no more than four outcomes per commitment. A single
outcome may be adequate for some commitments.
• You can tie several commitments to the same general outcomes.
This is very common when one outcome is dependent on a variety of
commitments being met (e.g., “increase corporate profitability by 5
percent”).
Deliverables: How I Will Do It
• Identify the actions you will complete to meet the commitment, that
is, the tactical strategy you are taking to drive the outcomes.
• Try to have no more than five deliverables per commitment.
• Deliverables at one level of the company often become commit-
ments for people at the next level; you may cascade certain deliver-
ables as commitments for your direct reports
The following is an example of a goal written using the COD format:
Commitment: Improve customer service levels in the stores I manage to
increase return customer traffic and sales
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management120
Outcomes: Scores of 90 percent or better on in-store customer surveys;
Increase year on year store sales by 5 percent
Deliverables: Provide customer service training to all store employees by
the end of the first quarter; review customer survey results with team
on the first week of each month; implement customer suggestion pro-
gram by June of this year
5.3.2 What Are You Doing to Ensure Employees Feel a Sense of
Commitment and Ownership toward the Goals They Are Assigned?
Goals will not have an impact on performance if employees feel little sense of
commitment toward achieving them. Managers must remember that goal setting
is not about telling people what to do. It is about working with people to clarify
what needs to be done in a manner that builds commitment toward goal accom-
plishment. There are many ways to increase the motivational power of goals. The
best and least expensive way is to ensure managers pay attention to three con-
cepts when they work with employees to create goal plans: participative goal set-
ting, managing goal difficulty, and addressing goal-setting anxiety.
Participative Goal Setting One effective way to build goal commitment is
to use participative goal setting. This technique requires managers to meet with
employees to discuss what goals make the most sense given their capabilities and
the organization’s business needs. Participative goal setting gives employees a sense
of influence and buy-in over the goals that are assigned to them. The opposite of
participative goal setting is to simply assign goals to employees without their partic-
ipation. When it comes to motivation, there is a big difference between telling peo-
ple what to do compared with talking with them about what they should be doing.
The simplest participative goal-setting techniques involve some variation of
the following steps:
Step 1. Managers ask employees to list the goals they plan to accomplish over
the coming work period to support the organization.
Step 2. Managers create their own set of proposed goals they want employees
to achieve.
Step 3. Managers and employees discuss the two sets of goals to find a mutu-
ally acceptable set of final goals.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 121
Step 1 is often the most difficult step in this process. Employees may struggle
to identify possible goals. When this happens, managers need to be careful
not to simply tell employees what the manager thinks their goals should be.
Instead, they should use one or more of the following techniques to help
employees identify goals:
• Have employees list things they created, accomplished, or influenced over the
past month, quarter, or year that contributed to the company’s success. These
can be used as a source of inspiration for creating future goals for the next
time period.
• Have the manager share his or her goals with the employee and ask what
things the employee can accomplish to support these goals. This reflects a
method called goal cascading, which I discuss later in this chapter.
• Challenge employees to list the things they do that justify why their job exists.
In other words, what does the company pay them to produce? This method
focuses employees on the importance of being able to define and articu-
late the goals of their job. But it can be quite threatening if done poorly and
should be used with caution.
There are certain jobs where a lot of participative goal setting is neither nec-
essary nor expected. These tend to be jobs where roles are well defined or
responsibilities are determined based on collective bargaining or other contract
agreements. For example, someone hired to clean tables in a restaurant does not
need to spend a lot of time talking with the manager to determine whether his or
her goals involve keeping the tables clean. However, it might make sense to use
participative goal setting to determine how many tables an employee can realis-
tically clean on a busy night. Employees who work in highly well-defined roles
appreciate being consulted on whether their job goals are realistic and obtainable.
These employees may not expect to have a lot of influence in the goal-setting pro-
cess, but simply knowing that they are allowed to voice their opinions increases
their engagement and job satisfaction.8
Another advantage of participative goal setting is that it lessens the risk that
employees will accept goals that are illogical, overly risky, or even downright
counterproductive. There are many examples of situations where employees
accepted goals that did not make sense because they did not feel empowered to
question their manager. Some tragic examples can be found in the transportation
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management122
and manufacturing industries where employees were given goals focused on
“minimizing costs” or “maximizing revenue” that ultimately led to accidents
caused by mechanical problems. After these accidents, employees stated that they
knew the goals were putting the machinery at risk, but they didn’t feel they had
permission or authority to question the goals they had been assigned.
Managing Goal Difficulty Goals have the strongest impact on productivity
when they are difficult but achievable. Managers should challenge employees to
set ambitious goals where a successful outcome is possible but not certain. But
managers also need to be sensitive to stress caused by having too many chal-
lenging goals. Goal plans ideally include a mixture of difficult goals along with
goals that are important but not as challenging. The less difficult goals provide
employees with a sense of balance and confidence that they will be able to meet
their job expectations. Managers must also be careful about pushing employees
too hard month after month. Most people are capable of putting in high levels
of effort when required to accomplish critical goals. But over time, they will stop
putting effort into goals if they feel the goals have become unrealistic, unreason-
able, or unsustainable.
Addressing Goal-Setting Anxiety If employees are not used to setting
goals, they may have concerns about how the goals will be used. The best way
to address this is to clearly communicate why the organization is implement-
ing more rigorous goal management methods and how these methods will
help employees to be more successful. The following are several benefits to help
employees understand the value they personally gain from adopting goal man-
agement processes in their organization.
Improving Strategic Communication Well-defined goal plans clarify what
people are working on and how it relates to the company’s business strategy.
Goals establish priorities for employees. They also help employees communicate
to their peers and leaders what they are doing to support the company’s strate-
gies. To reinforce this message, let employees know who will be looking at their
goal plans and how this information will be used to guide company decisions.
Fairly Evaluating Performance Goals provide a clear and transparent method
for evaluating employee contributions to the organization. They reduce reliance
on subjective opinions or ill-defined criteria when making decisions about pay,
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 123
promotions, or job assignments. To emphasize this point, let employees know
how goal accomplishment will be used to guide pay and promotion decisions.
Managing Workloads Rigorous use of goals protects employees when there are
changes in the business. Having clearly defined goal plans reduces the risk that
managers will ask employees to take on additional responsibilities without dis-
cussing how this has an impact on their existing commitments. To emphasize this,
establish guidelines for updating employee goal plans during the year to reflect
shifting organizational priorities. For example, restrict goal plans to a maximum of
ten goals and inform managers that they must work with their employees to remove
or readjust their existing goals before they can ask them to take on a significant
new assignment. Some caution is needed when setting these sorts of guidelines lest
employees become too caught up on whether something is or is not on their for-
mal goal plan. But there is usually value in encouraging employees and managers to
carefully think about priorities before committing to taking on new work.
Providing Credit for Contributions Most employees have experienced sit-
uations where they have been asked to work on one objective, only to be told
later to stop working on that activity and pursue another objective. By tracking
goals, companies give employees credit for work they have done on an initiative
even if the larger project may not have been completed due to changes in the
overall business strategy. Let employees know how goal data will be reviewed
and what methods will be put in place to ensure people are recognized for past
contributions.
Balance the Use of Goals as a Tool for Communication versus Evaluation Another
potential way to reduce goal anxiety is to use goals solely as a communication
tool until people become comfortable with them. After people become comfort-
able with the goal-setting process, goals can move beyond strategy communica-
tion to include supporting pay and promotion decisions. However, employees in
some jobs may view goals as relevant only if they have a direct impact on their
pay. In these cases, it may be important to tie goal achievement to pay and per-
sonnel decisions so people take the process seriously. How much you emphasize
goals as tools for communication versus tools to guide personnel evaluation will
affect how employees react to them. Put thought into what makes sense for your
organization. The approach that makes the most sense will vary depending on the
situation.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management124
5.3.3 What Methods Are Used to Align Employees’ Goals
with Company Business Strategies?
Goal management is not just about making sure employees have well-defined
goal plans. It is also about making sure these plans align with the overall objec-
tives of the company. This requires ensuring that goal conversations between
managers and employees incorporate information about company strategy.
There are three primary methods for doing this: establishing goal categories,
using prepopulated goal plans, or implementing goal cascading. Each has its
own strengths and weaknesses. Establishing goal categories is the easiest but
least effective. Creating prepopulated goal plans provides the most clarity to
employees but is the most difficult to maintain. Goal cascading is the most effec-
tive, but it requires managers to invest the most time by talking with employees
about how to develop appropriate goal plans.
Goal Categories This method starts with identifying broad categories of goals
that the company needs to address to support its business strategies (e.g., finan-
cial performance, customer service, safety). Employees are then instructed to set
goals that fit into some or all of these categories.
The most common example of goal categories comes from the balanced
scorecard management theory.9 This approach argues that every company
should focus on four categories of goals: (1) providing customer service; (2)
increasing operational efficiency and quality; (3) attracting, retaining, and
developing employees; and (4) achieving financial targets. Balanced scorecard
categories are fairly effective for ensuring that employees are setting goals that
support key elements of company performance. There may also be value in
creating additional goal categories that reflect a company’s particular business
strategy, market, or industry—for example, a manufacturing company might
create a goal category called “workplace safety” to ensure employees are
actively thinking about ways to reduce injuries and accidents, and a technol-
ogy company that emphasizes innovation might create a goal category called
“new product development” to reinforce the importance of setting goals that
drive creativity and exploration. But companies should avoid creating too
many categories lest employees become confused or overwhelmed. It is also
important to remind employees that certain categories may be more or less
relevant to their particular jobs. Some employees might put most or all of
their goals under a single category.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 125
The value of goal categories is their ability to get employees to think about
the company’s overall strategic needs when setting goals. Rather than start-
ing the goal-setting process by having employees ask themselves, “What do I
need to get done in my job?” goal categories encourage employees to think about
setting goals from a different perspective: “What does the company need me to
support through my work?” Goal categories also make it possible to track goals
based on common strategic themes. This allows companies to analyze goals to
make sure they adequately support different strategic initiatives. For example,
goal data might be used to diagnose if the company is on track to achieve its cus-
tomer service objectives but at risk of not meeting financial objectives.
Predefined Goal Plans Predefined goal plans are preset combinations of
goals developed for specific jobs or groups of jobs based on company strategy.
Employees are assigned predefined goal plans based on their role in the organi-
zation. For example, all customer service representatives in a company might be
given a predefined goal plan with five core goals:
1. Achieve an average customer satisfaction score of x percent.
2. Become certified to support at least x additional product lines.
3. Reduce the time to resolve customer problems by x percent.
4. Sell at least $x of additional products and services.
5. Maintain a customer renewal rate of at least x percent.
Every customer service representative would be assigned these same five
goals, although the numerical targets associated with the goals might change
from one employee to the next based on experience level, job location, or some
other variables.
Predefined goal plans provide detailed guidance to employees and managers
on what things are important to the company. They also significantly reduce the
time needed to establish goals since employees are working from a preset tem-
plate. Predefined goal plans can be highly effective when setting goals for jobs
with large numbers of employees or for jobs where the basic responsibilities
and tasks do not change that much from one year to the next (e.g., hourly retail
jobs, certain jobs in health care, many frontline sales jobs). The disadvantage is it
takes time to develop predefined goal plans, particularly if you are trying to set
goals for a wide range of job types. Predefined goal plans also do not work well
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management126
for jobs where the goals employees have can change significantly based on shift-
ing company needs and strategies.
Cascading Goals Goal cascading is a method for communicating business
strategies so all employees in the company understand the role they play in strat-
egy execution. The goal-cascading process starts when senior leaders set their goal
plans based on company strategy. Leaders share their goal plans with their direct
reports, who in turn set goals that align with and support those of their supervisor.
By doing this, companies can ensure that employees at all levels are working on goals
that link back to the organization’s overall strategic initiatives.
Figure 5.2 provides an illustration of goal cascading drawn from the health
care industry. In this example, the CEO of a hospital sets a goal to “decrease
annual operating costs by $5 million by the end of Q4.” This goal is cascaded
to the chief operating officer (COO) of the hospital, who proposes that one way to
reduce operating costs is to “decrease the rate of illnesses acquired by patients
while in the hospital by 10 percent by the end of Q4.” The COO then cascades
this goal to her director of facilities, who determines that the best way his area
can reduce patient-acquired illness is to “implement health and safety programs
by the end of Q2 in all the departments managed by facilities.” This is cascaded to
Dishwashers: Ensure all dishes are cleaned
using water heated to a level that will kill bacteria
Cafeteria Manager: Develop and enforce
proper food-handling procedures
Facilities Director: Implement occupational
health and safety programs in all departments
COO: Decrease hospital-acquired illness
by 10 percent over the coming year
CEO: Decrease operting costs by $5 million per year
Figure 5.2
Goal-Cascading Example
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 127
the cafeteria manager, who suggests that the most appropriate health and safety
programs in her area are to “develop and enforce proper food-handling proce-
dures for all cafeteria positions by the end of Q1.” The cafeteria manager’s goal is
cascaded to the dishwashing supervisor, who interprets this as setting a goal for
his team to “ensure all dishes are cleaned in water heated to an appropriate level
to kill bacteria.”
The power of goal cascading is its ability to get everyone in the organization
aligned around the same strategic objectives in a way that makes sense given
their particular jobs in the organization. Consider how the example in figure 5.2
illustrates the link between a high-level strategic objective of “save $5 million”
and a seemingly minor tactical task like “wash dishes using water heated at an
appropriate level.”
Goal cascading also makes employees’ goals more meaningful by linking
them to the overall mission and strategy of the organization. Consider how the
dishwashing employee in this example might have reacted if his supervisor sim-
ply said, “You need to wash the dishes in hotter water.” He might have resented
being told to do something that made his work more difficult. Compare this to
the supervisor who says, “You need to wash the dishes in hotter water to kill the
bacteria that cause patient illnesses, which directly affects the mission and finan-
cial stability of the hospital.” Now the dishwashing employee understands the
rationale for the request and why changing how he does his job is important to
the overall success of the hospital.
When done well, goal cascading is much more than a method for communi-
cating what the company’s strategic objectives are. It is a method to help employ-
ees identify what they can do to support those objectives. The key to effective
goal cascading is to approach it as a process for translating high-level strategic
objectives into actionable goals that employees can directly influence. This can
be done by encouraging leaders and managers to clarify the relationships of
three types of goals:
• Outcomes are goals that result indirectly from actions taken by employees. This
includes things such as “increase sales by 10 percent,” “grow market share by 25
percent,” or “reduce operating costs by $5 million.” Companies cannot directly
increase outcome goals such as sales volumes or market share. Instead, they take
actions that lead to these outcomes. For example, the accomplishment of launch-
ing a new marketing plan may result in customers’ buying more of the company’s
products, which creates the outcomes of increased sales or market share.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management128
The advantage of outcome goals is they can be tied directly to critical indicators
of company performance. Outcome goals are frequently associated with senior
leadership roles as well as certain roles in sales and marketing where people are
comfortable being held accountable for results they may only indirectly influence.
The disadvantage of outcome goals is that employees often find them to be confus-
ing or demotivating because they cannot directly control them. Many things influ-
ence outcome goals besides the actions of employees (e.g., changes in the broader
market and economy). Outcome goals are only indirectly influenced by what
employees actually do. This may reduce employees’ sense that they can directly
affect these goals, and many employees do not find these goals to be highly mean-
ingful. This was illustrated in a meeting I attended where a CEO boldly proclaimed
that the company’s goal was to become the first billion-dollar company in their
industry niche. One of the company’s engineers replied, “That’s great, but it doesn’t
mean anything to me. What do you actually want me to build?”
• Accomplishment goals describe things employees can directly achieve or
create—for example, “develop three new products,” “implement a new technology
system,” or “deploy a new purchasing process.” Accomplishments describe things
employees do to create outcomes. They indicate the actions and deliverables a
company is going to undertake to drive its strategic objectives. Accomplishment
goals tend to be associated with professional positions where people are respon-
sible for creating, building, or developing new products and services.
• Responsibilities are goals that describe ongoing performance levels employ-
ees are expected to maintain. Employees must support certain responsibilities
if the company is to achieve certain outcomes. Examples of responsibility goals
include “process 100 calls per day,” “keep the error rate to less than 1 per 1,000,”
and “score 95 percent on monthly safety audits.” These types of goals are com-
monly associated with administrative, manufacturing, and customer service
positions where the focus is mainly on supporting existing operations.
Goal cascading connects high-level strategic outcome goals with accom-
plishment and responsibility goals that are meaningful to employees in different
functions and levels across the organization. Figure 5.2 shows how an outcome
goal of “reduce operating cost by $5 million” was connected to an accomplish-
ment goal, “implement health and safety programs,” which in turn was con-
nected to a specific responsibility goal of “wash the dishes in water heated to an
appropriate temperature.” Imagine how the cafeteria workers in this example
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 129
might have reacted if they were simply given the original outcome goal: “reduce
operating cost by $5 million.” At best they might have seen the goal as irrelevant
to their jobs and something they could not have a direct impact on. They might
also find the goal to be threatening and even intimidating because it is clearly
something they cannot achieve by themselves. At worst, giving them this goal
could lead the employees do doing the wrong things for the right reasons, such
as deciding to wash the dishes in cold water to save money on heating costs.
Goal cascading starts with the creation of well-defined goals at the highest
levels of the organization. It is not possible to implement goal cascading without
considerable involvement of senior leadership, who must set well-defined goals
that can be effectively cascaded to their direct reports. In most cases, the qual-
ity of employees’ goal plans directly reflects the quality of their supervisors’ goal
plans. Leaders who create and cascade goals provide visible role models of how to
use goals to drive business execution. But the opposite is true as well: if leaders
do not invest energy into setting and communicating well-defined goals, it is folly
to expect that their direct reports will invest the time necessary to create effective
goal plans. Leaders must also discuss how their goals can be linked to the goals
of their direct reports. The best and perhaps only way to implement goal cascad-
ing effectively is to have senior leaders set and cascade their goals and then follow
up with people in the company, asking them, “What are you doing to support the
goals I cascaded?”
Implementing goal cascading also requires that managers know how to
engage their direct reports in goal-cascading conversations. The COD method
of goal setting discussed earlier is particularly well suited to goal cascading. This
is because it is based on how business leaders naturally go about communicat-
ing and managing business strategies. When using the COD method, leaders are
instructed that a “deliverable” at one level in the organization may be reframed
as a “commitment” at the next level down. Leaders are encouraged to meet with
their direct reports to discuss how their commitments and deliverables align
with commitments, outcomes, and deliverables of individual people in the
group. This approach helps align employees around higher-level business initia-
tives. Figure 5.3 provides an example of how this works. A manager cascades a
broader commitment to one of her direct reports. The direct report then cre-
ates two new commitments that support certain deliverables associated with the
managers’ higher-level commitment, but also reflect the nature of the employee’s
particular role on the manager’s team.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management130
It often makes sense to use different goal alignment strategies for differ-
ent parts of the company, for example, using goal cascading with senior lead-
ers, directors. and managers and switching to goal categories or predefined goal
plans for lower-level frontline jobs. What is important is to have some method
in place to make sure employee goal plans are supporting company strategic
initiatives and critical business outcomes. This includes making sure the goals
of senior leaders align with the goals of their direct reports’ direct reports. In
Figure 5.3
Goal Cascading Using the Commitments, Outcomes,
Deliverables Methodology
1. Manager cascades a commitment
to an employee on their team that
has multiple deliverables
2. The employee translates this into two
commitments based on those deliver-
ables that are relevent to his role
M
a
n
a
g
e
r’
s
G
o
a
l
p
la
n Commitment
• Improve product quality and
reduce costs created by re-work
Outcomes
• Decrease product defect rate to less
than 1 per 10,000 units
• Lower cost per unit manufacturing
costs by 5%
Deliverables
• Re-engineer product inspection
process
• Hire a process maintenance
engineer
• Implement alpha quality training
across the manufacturing team
• Re-negotiate vendor contracts to
obtain higher quality raw materials
E
m
p
lo
y
e
e
’s
G
o
a
l
p
la
n Commitment 1
• Re-engineer product inspection process
Outcomes
• Decrease product defect rate to less
than 1 per 10,000 units
• Shorten product inspection time by 5%
Deliverables
• Conduct kaizen workshop with manu-
facturing team during Q1
• Document and train supervisors on
new process by end of Q2
Commitment 2
• Implement alpha quality training
across the manufacturing team
Outcomes
• Decrease product defect rate to less than
1 per 10,000 units
• 100% certification of manufacturing
team on Alpha quality process
Deliverables
• Develop quality training curriculum
• Arrange for training department to
deliver training for all employees by Q2
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 131
most companies, it is the people two levels or more down from the senior-most
leader who comprise the bulk of the employee population. From an execution
standpoint, it is not the CEO’s strategic goals that matter as much as the goals
of people further down in the organization who are ultimately responsible for
executing the strategy.
5.3.4 How Is Employee Goal Accomplishment Measured?
If goals were perfectly defined, there would be no reason to discuss measure-
ment of goal accomplishment. Goal accomplishment would be self-evident
because you could simply examine a goal and determine whether it was or was
not achieved. But the reality is that most goals are not so well defined. For exam-
ple, if someone had a goal to sell $10,000 worth of product and sold only $9,000,
did he totally fail to achieve his goal? Should he be evaluated as performing at
the same level as someone who sold only $5,000? Many goals are also associated
with less tangible concepts related to quality or performance. For example, if an
author has a goal to “complete a three-hundred-page book by September,” can
we evaluate whether she achieved that goal solely based on the number of pages
she wrote? Or should the evaluation include some attempt to assess the quality
of what she wrote in addition to examining the absolute number of pages?
Goal-setting methods like SMART and COD help make goals easier to
measure and evaluate. This reduces subjectivity when evaluating employ-
ees’ goal accomplishments. These methods also help employees understand
why they received certain evaluations and what they need to do differently to
change the evaluation in the future. But there is almost always some subjec-
tivity inherent in judging employee performance as it pertains to goal accom-
plishment. How goals are evaluated can become a particularly significant point
of contention if goals are used to guide pay or promotion decisions. For this
reason, a decision should be made early on whether goals can and should
be evaluated solely on tangible, objective metrics or whether goal accom-
plishment will be determined based on some overall rating agreed on by an
employee and his or her manager.
Some goals lend themselves to more objective evaluation because they can be
easily measured using available metrics—for example, sales goals associated with
hitting specific financial targets or manufacturing goals associated with produc-
ing specific numbers of products. But goals for many jobs are difficult to measure
objectively due to the nature of goals themselves or because an inordinate level of
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management132
effort would be required to collect truly objective goal data. In these cases, it is good
to agree on a standard goal accomplishment rating scale such as the following:
1 = Very poor performance: Failed to meet most or all goal expectations
2 = Poor performance: Met some goal expectations but not all
3 = Effective performance: Met all goal expectations
4 = Exceptional performance: Exceeded goal expectations
Employees should meet with their managers to review their goals and, if pos-
sible, reach consensus on the goal accomplishment rating. If agreement cannot
be reached, then it is usually the manager who gets to make the final rating. If
possible, it is also beneficial to have the manager’s evaluation reviewed by his or
her supervisor or peers, or both, through some form of performance assessment
calibration process.
It is important to set expectations around the goal accomplishment levels
most employees will achieve. For example, if the example of the scale above was
used to evaluate goal accomplishment, the expectation should be set that most
employees will receive 3s assuming they are generally solid performers. The
rating of 4 is reserved for employees whose performance truly went above and
beyond goal expectations. This will encourage employees to strive for difficult
goals without overly punishing them if they fail to accomplish everything they
set out to achieve. If someone always succeeds at achieving every goal, then it is
questionable whether this person is truly challenging himself or herself.
People are not setting truly difficult goals if they consistently exceed their goal
expectations year after year. Yet many companies develop cultures where anything
less than 100 percent goal completion is viewed as failure. Companies with cul-
tures like this are unable to differentiate between high-performing employees who
set and achieve difficult goals and mediocre employees who set and achieve rela-
tively simple goals. For example, a large consulting company had an unwritten pol-
icy where the only way to be promoted was to be rated as having had perfect goal
accomplishment. The best way to succeed in this company was to set easy goals
and avoid any assignment where success was not almost certain. Employees who
set ambitious goals and failed to achieve them might as well leave the organization.
Methods for addressing this type of rating inflation are discussed in chapter 6.
It is also useful to set expectations around how frequently employees should
update progress against goals. Emphasize to managers that if their employees fail
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 133
to achieve their goals, then the manager is probably going to struggle to achieve
his or her goals as well. If a goal is at risk of not being achieved, it is in the man-
ager’s and employee’s best interest to discuss it early enough so something can
be done to get it back on track before it is due. Employees and managers should
update and review goal progress on a fairly regular basis throughout the year.
How often this should happen varies depending on the type of job. It requires
balancing the manager’s need to stay informed with the employee’s desire for a
sense of autonomy. For hourly sales jobs, this might be something done daily
or weekly. For pharmaceutical research positions, this might be done quarterly.
Whatever time frame is chosen, you will know the process is working when nei-
ther managers nor employees feel any sense of surprise when they meet to dis-
cuss whether the employee’s goals were achieved.
5.3.5 What Is the Relationship between Goal Accomplishment
and Employee Pay, Promotions, and Recognition?
Goals define what people are expected to do in their jobs, so goal accomplish-
ment should naturally play a central role in decisions related to compensation,
promotion, and other forms of recognition used to reward and retain employees.
Linking pay and promotions to goal accomplishment increases the meaningful-
ness of goals, reinforces organizational priorities, and creates a more consistent,
transparent, and fair process for making personnel decisions. But some risks
are associated with tying financial incentives and other tangible rewards to goal
accomplishment. The following design principles help reduce these risks when
developing pay-for-performance strategies built around goals:
• Balance goals versus competencies. Performance can be defined in terms of
two dimensions: what you accomplish and how you accomplish it. What you
accomplish is measured by goal achievement. How you accomplish it is typically
measured through competency evaluations or other ratings of employee job
behavior. Pay-for-performance systems should balance goals and competencies
when allocating pay decisions. Overemphasizing goals can lead to an unhealthy
“ends always justify the means” approach to performance. Employees should
not be rewarded for achieving goals if the methods used to achieve them vio-
lated company values or involved ethically questionable practices. To manage
this risk, many pay-for-performance processes use a roughly equal weighting of
goals versus competencies when calculating overall performance levels.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management134
• Protect the intrinsic motivational value of goals. Research shows that the
goals people pursue voluntarily can become less enjoyable when they are paid to
accomplish them. This reflects the difference between doing something because
you want to do it and doing something because someone expects you to do it
(e.g., the difference between playing music for fun versus playing professionally).
This issue tends to be less of a concern in a job setting, since employees naturally
expect to be paid for what they do. But if employees are accomplishing certain
goals without any specific financial incentives, then attaching financial rewards
to these goals might actually decrease their motivation toward achieving them.
• Define the link between goal accomplishment and pay. When employees feel
that pay decisions are based on clearly defined and consistently applied proce-
dures, they are more likely to accept pay outcomes as fair, even if the decisions
do not benefit them personally. This is referred to as procedural justice.10 The key
to creating procedurally just pay strategies is to make sure that goals are clearly
measurable and well understood. If employees understand the measures used to
determine pay, they are much more likely to accept the results of pay decisions.
• Encourage challenging goals. One problem that can result when goals are
linked to pay decisions is the potential for employees to avoid setting demanding
goals where the outcome is uncertain since they know this could hurt their pay.
Pay strategies should support employees who take on challenging goals, even if
it means they may not always achieve the goals they set. Do not punish people
who are willing to challenge themselves with difficult goals and reward those
who play it safe by committing only to easier goals.
• Encourage teamwork and collaboration. Using goals to drive pay may
encourage some employees to focus on activities that support their personal
goals with little concern for the broader goals of their team or organization. It
is a good idea to base pay on a mix of individual goals and broader team- or
organization-based goals. This helps to create a balance between “what is good
for me” versus “what is good for the group.”
• Balance the value placed on financial stability versus financial opportunity.
People differ widely in their preference and tolerance for financial uncertainty.
Employees in sales jobs tend to be more comfortable with linking some or all of
their pay to goal accomplishment because they are willing to trade the financial
stability of a regular salary for the opportunity to make considerably more money
by hitting all of their goals. In contrast, many service employees want a more stable
source of revenue. They will trade the opportunity to make more money through
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 135
a goal-based bonus plan for the greater financial stability associated with receiving
a fixed salary. It is important to think about the stability preferences of employees
before implementing a pay-for-performance strategy. Some association between
pay and performance is almost always desirable. But whether the percentage of pay
tied to goal attainment should be 5 percent, 50 percent, 100 percent, or some other
variable will change from one job to the next. Also remember that what motivates
people in leadership roles when it comes to pay may not be the same thing that
motivates the people they lead (see the discussion: “Different Types of Goals for
Different Types of Roles—We Don’t All Want the Same Thing”).
• Emphasize that goals are about a lot more than pay. If compensation and pro-
motion decisions are communicated as the main reason for goal management, then
employees and managers may view goal management solely as a method for evalu-
ating employee performance as opposed to executing business strategies. Managers
may look at employee goals only once a year, when it is time to make compensa-
tion decisions. And employees may be overly conservative when they set goals if
they view them solely as a tool to determine pay or promotion opportunities. If this
is happening, you might consider downplaying the link between goal accomplish-
ment and pay and promotion. This does not mean getting rid of the association
between goals and personnel decisions completely. Just be clear that people view
goal management first and foremost as a tool for driving business strategies and
secondarily as a tool to guide and justify compensation and staffing decisions.
D I F F E R E N T T Y P E S O F G O A L S F O R D I F F E R E N T
T Y P E S O F R O L E S — W E D O N ’ T A L L W A N T
T H E S A M E T H I N G
Goals are one of the most powerful methods companies can use to
motivate and align employees around strategic initiatives. However,
what makes goals meaningful and motivating varies significantly across
different types of employees.a Each of the following types of goal ori-
entation reflects characteristics that make certain goals more or less
motivational for different kinds of people:
• Purpose driven. Purpose-driven people value goals that make them feel
part of a larger team or mission. They are motivated by goals that illus-
trate how their work contributes to a greater strategy or vision. They
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
Created from ashford-ebooks on 2020-03-31 02:42:32.
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Commonsense Talent Management136
tend to appreciate goals that give them a sense of “being part of some-
thing bigger than myself.” Health care, environmental, charity, and vol-
unteer organizations tend to be effective at using purpose-driven goals.
• Mastery driven. Mastery-driven individuals are motivated by goals
that challenge them to develop and test their capabilities. They get
satisfaction from proving to themselves and others that they can
accomplish difficult goals. Artists, scientists, doctors, and engineers
are often strongly motivated by mastery goals that require develop-
ing elegant creations and innovative solutions to difficult problems.
• Competitively driven. Competitively driven individuals enjoy goals that
allow them to compete against other individuals, teams, or organiza-
tions. They measure success in part by how well they perform relative
to others. Competitive goals are often particularly strong motivators
for many athletes, salespeople, and business leaders.
• Transactionally driven. Transactionally driven employees focus on goals
that are tied to clear benefits and rewards. Most often these are finan-
cial bonuses, prizes, promotions, or other rewards with clear monetary
value. These people evaluate goals based on the rewards tied to their
accomplishment rather than the goal itself. Many people in sales and
financial investment positions are strongly transactionally driven.
• Security driven. Security-driven individuals value goals that provide
them with a sense of role clarity and job stability. They value goals
that give them a sense of control and ownership over their future
employment prospects (“If I achieve these things, then I can count
on future employment and access to certain career opportunities”).
Public sector, manufacturing, and certain service industries often
attract people who place a lot of value on security-driven goals.
There are positives and negatives to each type of goal orientation.
Any one of them taken to an extreme is likely to have negative con-
sequences. For example, overemphasizing transactional goals over
mastery goals can lead to focusing solely on money without paying
attention to quality. Conversely, overly focusing on mastery goals with-
out value purpose-driven goals can lead to investing time in projects
that are intellectually impressive but of little relevance to the overall
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 137
mission of the organization. Furthermore, no person is solely motivated
by any single type of goal. The goals people value can vary depend-
ing on the context. For example, a person might be heavily focused on
transactional goals at work, but put more emphasis on mastery-driven
goals when pursuing personal hobbies.
People who strongly favor one type of goal often seem to mock or
scorn people who focus on other goal types. For example, purpose-driven
individuals may look down on people who are focused on transactional
goals, making comments like, “They care only about cash.” Conversely,
transactionally driven people may mock purpose-driven or mastery-
driven employees by making comments like, “Mission and visions don’t
pay the bills. Show me the money!” A common mistake of business lead-
ers is to assume that the things that make goals meaningful to managers
are the same things that make goals meaningful to their employees.
I believe that no single goal type is inherently better than another.
They can all be valuable forms of motivation. What is important is to
recognize that a goal’s motivation value may be different for differ-
ent people. Just because a goal is motivating to one employee does not
mean it will be equally motivating to another. Part of the art of goal
setting is balancing the use of different types of goals in way that maxi-
mizes overall workforce productivity.
aButton, S. B., Mathieu, J. E., & Zajac, D. M. (1996). Goal orientation in organizational research: A con-
ceptual and empirical foundation. Organizational Behavior and Human Decision Processes, 67, 26–48.
Linking goal accomplishment to pay and promotion decisions is critical to
maximizing workforce productivity, alignment, and efficiency. But it needs to be
done with caution, or it can create unintended and potentially damaging conse-
quences. It is probably not possible to create a perfect pay-for-performance pro-
cess. But by paying attention to the factors listed above, you can create one that
does far more good than harm.
5.3.6 How Are Goals Used to Support Employee
Development and Career Growth?
Effective goal setting requires striking a balance between what the company needs
to accomplish, what employees can do, and what employees want to get out of
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management138
their jobs. Pay and promotions are part of this equation. But another powerful and
often overlooked way to increase the motivational value of goals is to link them to
an employee’s career objectives.
One effective method for linking goals to employee career growth is to have
managers and employees evaluate goals in terms of organizational value and
developmental value. Organizational value reflects how important a goal is to
the company in terms of key strategic objectives or job requirements. Goals that
are low in organizational value may be nice to accomplish but are not critical to
the organization. Goals high in organizational value are critical to the organiza-
tion and may be considered to be the most important part of the person’s job.
Developmental value reflects how much a goal requires the employee to learn new
things or exposes this person to unfamiliar work environments, problems, or busi-
ness situations. Goals that have little developmental value are usually things that an
employee has done before. They may be mentally complex or time-consuming, but
the employee “knows what he or she is doing.” Goals with low development value
can also be unfamiliar but easy to master. Goals high in development value typically
involve things that are unfamiliar to employees and that require them to develop
additional skills, acquire new experiences, or work in new areas. This does not mean
the employees lack confidence in achieving the goal; rather, in order to achieve it,
they will have to acquire new knowledge, skills, and experiences. For example, an
employee interested in developing cross-cultural leadership skills might be given
a job assignment that requires her to work with customers in different parts of the
world. This goal is high in development value because it means working in other
countries, which will require this person to build cross-cultural skills.
Figure 5.4 provides an example of a person’s work goals plotted based on
organizational value and developmental value. The goals are divided into four
quadrants: business-driven development, functional, self-focused development,
and underutilization.
Business-driven development goals are high in organizational value and high in
development value. These are things that employees have to do for work that will
require them to gain new experiences and develop new skills. These goals tend to be
highly meaningful to employees because they are both important to the company
and help them build capabilities to advance their careers. The downside of these
goals is that they tend to be mentally demanding. They require learning how to do
the work while getting the work done at the same time. People who have too many
business-driven development goals risk becoming overwhelmed or burning out:
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 139
• Functional goals are high in organizational value but low in development
value. These are things that employees know how to do and have typically
done before. They are not necessarily easy, but they are familiar. The advan-
tage of functional goals is they allow employees to contribute to the organi-
zation by focusing on important but familiar tasks. The disadvantage is they
do not push employees to grow and develop new capabilities. People who
have too many functional goals may feel as if they are stuck in a rut, doing the
same things over and over.
• Self-focused development goals are low in organizational value but high in
development value. The advantage of these goals is they allow employees to
take developmental risks since failure will not have a major negative impact
on the business. The disadvantage is that employees may never get around to
these goals since they are not important to the organization. This quadrant is
sometimes referred to as the “books I want to read” or “classes I keep hoping
to take” section of someone’s goal plan.
Self-Focused
Development Goals
Underutilization
(busywork)
Complete MBA
Write Monthly
Department Newsletter
Core Functional
Goals
Track and Manage
Revenue Targets
Business-Driven
Development Goals
Build New Project
Group
Lead Acquisition
Team
1
1
2
3
4
5
Importance
S
tr
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tc
h
G
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ls
2 3 4 5
Conduct College
Recruiting
Figure 5.4
Plotting Goals from a Development Perspective
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management140
• Underutilization goals are low in both organizational value and developmen-
tal value. These may be goals that used to have more value but have become
less important or less challenging over time. Underutilization goals provide
little value to the company or the employee and should be removed from an
employee’s goal plan if possible. It may make sense to reassign these goals to
other employees who will gain more developmental value from performing
them. What may be a relatively unimportant and low-development-value goal
for a more tenured employee might be a challenging and important goal for a
less-experienced employee.
Based on my experience working with clients, the optimal mix of goals is
approximately 40 to 50 percent business-driven development, 40 to 50 percent
functional, 10 to 20 percent personal development, and 0 percent underutiliza-
tion. Assigning goals using this career development mind-set makes goal plans
more meaningful to employees because they support their career aspirations.
It also avoids motivational problems that can occur when employees feel over-
whelmed by too many business-driven development goals, feel stuck in a dead-
end job due to too many functional goals, or feel undervalued due to too many
self-focused or underutilization goals. Perhaps most important, this goal-setting
approach allows the organization to build the capabilities it will need tomorrow
through changing how it accomplishes business goals today.
It is important to encourage managers to assign goals with development in
mind. Operationally focused managers tend to assign goals to the people they
know can achieve them. These managers assign goals based on people’s prior
experience achieving similar goals. In other words, people are asked to do some-
thing because they have done it before. While this makes sense for achieving
short-term results, it undermines the power of using goals to drive long-term
employee development. Employees grow weary of being asked to perform the
same old tasks over and over without being given a chance to demonstrate their
ability to do something new.
To maximize the motivational value of goals, managers need to approach
goals as a tool for engaging and developing employees, not just for getting work
done. Managers should be trained on the concept of mapping employee goals
based on organizational value and development value. They should be encour-
aged to use goal assignments to balance the company’s short-term operational
needs with employees’ longer-term career objectives. The organization might
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 141
also give managers goals that encourage them to provide their direct reports
with developmentally meaningful job assignments (e.g., rewarding managers for
building the capabilities of their teams, increasing internal promotion rates, and
improving employee engagement and retention).
5.3.7 How Does the Organization Coordinate Goals across
Different Employees to Foster Communication and Collaboration?
It is quite common to find that two people in the same organization are working
on almost exactly the same goal totally unbeknown to one another. This situa-
tion leads to wasted resources, missed opportunities to collaborate, and possible
conflicts over “whose work is best.” The best way to avoid this problem is to pro-
mote communication and collaboration between groups with similar goals by
increasing goal visibility, sharing and linking goals, and creating common inter-
est groups and communities.
Increasing Goal Visibility The most basic step for improving goal coor-
dination is to give employees insight into the goals of other people they work
with—for example, by listing employee goal plans on a publicly available intranet
system in the company. Employees should be actively encouraged to share and
discuss their goals with others so they can benefit from the support and advice
of those around them. Employee goal plans should be public unless there is a
very clear business or legal reason for keeping them private. Employees should
not treat their goals as secrets to be kept from their coworkers.
Even business confidential goals can be shared in a way that does not dis-
close sensitive information. For example, an employee could share goals related
to increasing sales revenue without showing actual revenue targets. This could
be done by stating something like, “Hit revenue targets outlined in the strategic
operations plan,” where the operations plan is a confidential document. Similarly,
a vice president of business development could share a goal of “growing market
share through successfully completing acquisitions agreed to by the board” with-
out including detailed information about what acquisitions are planned.
Sharing and Linking Goals Another method to encourage collaboration is to
assign one goal to multiple employees or link one employee’s goals to the goals of
other employees. This encourages employees to work together to achieve goals
reflecting common interests. Linked and shared goals can be powerful tools for
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management142
encouraging collaboration, but they must also be carefully managed or they may
create internal tension and resentment among employee groups. Shared and linked
goals can pose risks if clear guidelines are not established around how goal perfor-
mance will be evaluated. For example, how will the organization assign responsibil-
ity for failure to achieve a shared goal? Will responsibility be shared equally across
all employees, or will some employees be given more responsibility than others?
Creating Common Interest Groups and Communities The development
of social technology makes it much easier for companies to bring together
groups of employees who share the same or similar sets of goals. For exam-
ple, I have seen companies create online groups and discussion forums where
employees discuss how to achieve goals related to improving customer service,
developing new products, or building the companies1 brand in the market.
The employees joining these groups do not share the same exact goals, but are
working on different goals tied together by common themes such as customer
service, product innovation, or brand awareness. Creating online common inter-
est groups encourages employees to communicate ideas, resources, and advice
on how to achieve similar goals. It also creates a sense of camaraderie among
employees who are wrestling with the same types of challenges. This approach
avoids many of the issues that can arise from shared and linked goals since
no assumptions are made around shared goal responsibility. Common inter-
est groups can be particularly powerful in geographically distributed or vir-
tual workforces where employees do not physically work together. By having a
group of compatriots to turn to for advice, employees feel a greater sense of sup-
port and connection to the company. Organizations may even provide formal
rewards and recognition to employees based on the contributions they make to
supporting their broader community of colleagues who share common goals.
5.3.8 How Are Goals Used to Guide Business Execution
on an Ongoing Basis?
Many organizations view goal setting as an annual or quarterly event. Goals in
these companies are typically set at the beginning of the quarter or year and are
reviewed only at the end of that time period to make personnel decisions associ-
ated with pay and promotions. Goals are rarely reviewed or updated during the
year. Such infrequent use of goals significantly limits their value for driving busi-
ness execution.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 143
To maximize the value of goal management, companies must shift goal man-
agement from an administrative process used solely for evaluating employee
performance to an operational process used to guide decisions about business
execution. This involves creating processes and norms that ensure goals are fre-
quently discussed, reviewed, and updated. Four things are particularly impor-
tant for making this shift: focus on goal accomplishment instead of employee
performance, establish goal-based operational reviews, regularly update goals,
and link goals to other business metrics. How these are implemented can vary
significantly depending on the type of job and organization. For example, oper-
ational reviews typically occur much less frequently in a biomedical research
organization than in a call center sales organization. But both organizations need
some form of goal-based operational review process if they are to maximize the
strategic value of goal management.
Focus on Goal Accomplishment Instead of Employee Performance Using
goals operationally requires shifting the focus of goals from being “something an
employee is expected to do” to “something the organization needs to accomplish.”
Goals should be treated primarily as metrics for measuring company performance
and secondarily as measures of employee success. If an employee says, “I’m behind
on one of my goals,” it should not be immediately interpreted as a sign that the
employee is failing to do his or her job. It should be seen as a sign that the com-
pany may need to shift resources to get the goal back on track.
Employees will not be comfortable calling attention to goals they are strug-
gling to achieve if they see goals as something that is mainly used to evaluate their
personal performance. When an employee says he is not achieving a goal, the ini-
tial response from his manager should be, “What can the company do differently
to help you succeed?” as opposed to, “What are you failing to do?” This does not
mean that goal accomplishment will not affect compensation and promotion sta-
tus, but compensation and promotion decisions are not the primary reason for
using goals. One way to test whether your company is using goals for business exe-
cution and not just personnel administration is to ask, “Would goal setting still be
important and worthwhile if the company was forced to freeze pay for a year?”
Establish Goal-Based Operation Reviews The purpose of goals is to define
what individual people across the company need to do to execute the organiza-
tion’s overall strategies. Goals should be discussed on an ongoing basis. Operations
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management144
meetings should include reviewing the goals the group or company needs to
achieve, discussing whether they are on track, and exploring how to achieve them
more effectively. Goals should also be used to guide decisions about the allocation
of scarce organizational resources. If managers want additional resources in terms
of finances, technology, head count, or training, they should justify their request
by linking it to specific organizational and employee goals.
The simplest way to incorporate goals into operations discussions is to lever-
age people’s goal plans as a tool for guiding operation review meetings. For exam-
ple, I knew a manager who used weekly operations meetings as an opportunity
to publicly discuss the goal plans of direct reports. Each week a different per-
son on the team shared his or her goal plan and reviewed the progress he or she
made on different goals. When people know their goals are going to be discussed
and reviewed in an open setting on a regular basis, they will put more effort into
keeping goal plans updated and ensuring that their performance against goals is
on track. The open discussion of goals also keeps the goal management process
focused on relationships between people’s goals and business needs as opposed to
using goals as a way to evaluate each person’s individual performance.
Regularly Update Goals One way to see if a company is using goals to drive
business execution is to evaluate how frequently people review and update their
goals. Company strategies usually shift somewhat over the course of a year. Most
companies modify the tactics they use to accomplish strategies on a quarterly
basis, if not more often. If goals are updated only once or twice a year, then it is
unlikely they are being used to guide ongoing operational decisions. Similarly, it
is important to encourage employees to update and modify goals over the year
to reflect changes in their roles, business tactics, or market conditions. Few jobs
stay exactly the same over a course of twelve months, and employees should be
expected to regularly update and occasionally even change their goals through-
out the year. It is important to put some guidelines and review processes in place
to ensure people don’t game the system by lowering or changing their goals to
ensure they have 100 percent goal achievement. But goals should not be seen
as something set in stone that can be updated only annually or quarterly. If the
company changes its strategy or tactics or an employee changes his or her job
role, then these changes should be reflected in people’s formal goal plans.
Link Goals to Other Business Metrics There should be a clear relation-
ship between employees’ goals and operational metrics such as profit and loss
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 145
(P&L) statements, customer service measures, financial forecasts, and productiv-
ity charts. Creating links between goals and operational metrics calls attention to
the role that goals play in driving the success of the company. This allows peo-
ple to see the impact that goal accomplishment has on overall company perfor-
mance. It also allows leaders to diagnose issues that are affecting performance
against key operational metrics. For example, if a company is failing to achieve
its revenue targets, is it because the company has not effectively executed its
strategy or because the strategy itself is incorrect? In other words, have people
failed to accomplish the goals associated with the strategy, or did the goals they
set fail to drive the business outcomes the company was expecting?
Goals define what the company has to achieve to be successful. As such, they
should be reviewed regularly, discussed openly, tied to key business metrics, and
updated throughout the year to reflect shifts in company strategies and tactics.
Leveraging goal management as a tool to drive business execution requires mak-
ing the review and discussion of goals integral to day-to-day actions and deci-
sions taking place within the company. This requires treating goals as important
to business operations, and not just as things employees have to do to get a raise
or be promoted.
5.4 GOAL MANAGEMENT PROCESS MATURITY
It is remarkable how quickly companies can implement goal management pro-
cesses when goals are made a priority by senior leadership. I have seen companies
go from no standardized goal management process to the implementation of goal
plans across over ten thousand employees in less than four months. But creation
of goal plans is only the first step toward creating a world-class goal management
process. Additional time is required to develop the internal skills and processes
required to efficiently cascade and set well-defined goals, effectively manage and
update goals throughout the year, and coordinate activities across the company
to align efforts to accomplish shared goals. Improving goal management meth-
ods can quickly produce rewards associated with increased employee engagement,
productivity, and retention. But fully realizing the business execution value of goal
management methods requires ongoing efforts lasting multiple years.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management146
Figure 5.5 lists five general maturity levels that companies go through as
they develop their goal-setting processes. The levels begin with simply having
goals and progresses up to using goals as a strategic tool to communicate, moni-
tor, and manage the execution of business strategies.
The first level of maturity focuses on making sure employees have well-
defined goals. Do not underestimate the business value of achieving this level.
Simply getting managers to sit down with their employees and map out a clear
set of goals and expectations is a major leap forward for many organizations. The
value of achieving this level was memorably captured in a comment an employee
made on an engagement survey conducted shortly after implementation of a
new goal management process in a large multinational company: “For the first
time in the fourteen years I have been with this company, I actually know what I
am supposed to be doing in my job.”
Level 2 focuses on ensuring that employees’ goals are aligned with the
company’s overall strategy. This is typically done through some form of goal-
cascading process. It can also be achieved through the use of goal categories or
standardized goal plans. It is important to focus on creating alignment early in
1. Tangible: everyone in the company has a clearly
defined, measurable set of goals
2. Aligned: employees’ individual goals can be directly
linked to overall strategic objectives of the company
3. Meaningful: people see a clear link between their
career objectives and accomplishment of their goals
4. Coordinated: people across departments collaborate
to accomplish shared and interdependent goals
5. Operational: goals are frequently reviewed and updated
at all levels to actively manage business execution
Figure 5.5
Levels of Goal Management Maturity
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 147
the goal-setting process or the company risks focusing employees on activities
that may not fully support the company’s overall strategic objectives. Level 3
shifts the focus from setting goals that are important to the company to setting
goals that are also meaningful to employees. This involves using methods to
ensure that employees see goals as being relevant to their personal career aspi-
rations. The best way to do this is to establish goal plans that integrate business
needs and employee development and to tie goal accomplishments to pay and
promotion decisions.
Level 4 focuses on building collaboration within the company around com-
mon types of goals. It is about breaking down silos and coordinating common
efforts across peers and departments. This level is achieved through making
goals visible across the organization and providing employees with tools that
promote collaboration among employees with similar or common goals.
Level 5 emphasizes getting business leaders to use goal processes as tools for
running and managing the business. As one COO put it, “You are using goal
management correctly when it ceases to be just a tool for personnel administra-
tion and becomes a tool for communicating and evaluating strategies.” This level
is achieved by reviewing goal progress through the year, using goal metrics to
diagnose how well the organization is executing on its strategic objectives, and
leveraging goal management processes as a means to quickly update company
direction and align the workforce around shifting strategic initiatives.
You do not necessarily need to master lower levels of goal management matu-
rity to reach some of the higher levels. But maturity levels do tend to build on
one another somewhat like the stories of a building. The stronger the foundation
of the lower stories is, the more stable the higher levels will be. For example, it is
difficult to make operational use of goals unless employee goals are tangible and
well defined.
Companies also do not need to place equal emphasis on all five maturity lev-
els across all parts of the organization. For example, goal coordination may be
more important for some jobs than others. Companies may also differ from one
department to the next in terms of the emphasis placed on using formal pro-
cesses to ensure goal alignment. What is important is to consider what level of
goal maturity is most critical to driving business success given a particular orga-
nization’s business strategies, workforce characteristics, and operational chal-
lenges, and then to stay focused on steadily developing and improving goal
management methods until that level is achieved.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Commonsense Talent Management148
5.5 CONCLUSION
Goal management is one of the most powerful and most underused tools for
driving business execution. This chapter has explained why goals are critical
for business execution and provided guidelines for answering critical ques-
tions that underlie the design of effective goal management processes. All
companies use some form of goal management, but few do it extremely well.
Companies that make a concerted effort to fully leverage the value of goals to
guide and motivate employee performance tend to outperform and outlast their
competition.
NOTES
1. Kleingeld, A., Mierlo, H., & Arends, L. (2013). The Effect of goal setting
on group performance: A meta-analysis. Journal of Applied Psychology, 96,
1289–1304.
2. Lee, F. K., Sheldon, K. M., & Turban, D. B. (2003). Personality and the
goal striving process: The influence of achievement goal patterns, goal
level, and mental focus on performance and enjoyment. Journal of Applied
Psychology, 88, 256–265.
3. Gist, M. E. (1986). Self-efficacy: Implications for organizational behavior
and human resource management. Academy of Management Review, 12,
472–485.
4. Buckingham, M., & Coffman, C. (1999). First break all the rules: What the
world’s greatest managers do differently. New York: Simon & Schuster.
5. Becker, B. E., & Huselid, M. A. (1998). High performance work systems
and firm performance: A synthesis of research and managerial implica-
tions. Personnel and Human Resources Management, 16, 53–101. Berggren,
E., & Strezo, M. (2011). How companies leverage business execution soft-
ware to drive excess shareholder return. SuccessFactors Research white
paper, www.successfactors.com. Bloom, N., & Van Reenen, J. (2007).
Measuring and explaining management practices across firms and coun-
tries. Quarterly Journal of Economics, 122, 1341–1408.
6. Berggren, E., & Messick, K. (2008). Moving mountains. SuccessFactors
Research white paper, www.successfactors.com.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Doing the Right Things 149
7. Crowder, R. G. (1976). Principles of learning and memory. San Francisco:
W. H. Freeman.
8. Spencer, D. G. (1986). Employee voice and employee retention. Academy
of Management Journal, 29, 488–502. Wood, S. J., & Wall, T. D. (2007).
Work enrichment and employee voice in human resource management-
performance studies. International Journal of Human Resource Management,
18, 1335–1372.
9. Kaplan R. S., and Norton D. P. (1992, January–February). The balanced
scorecard: Measures that drive performance. Harvard Business Review,
71–80.
10. Colquitt, J. A. (2001). On the dimensionality of organizational justice: A
construct validation of a measure. Journal of Applied Psychology, 86(3),
386–400. Colquitt, J. A., Conlon, D. E., Wesson, M. J., Poster, C.O.L., & Ng, K. Y.
(2001). Justice at the millennium: A meta-analytic review of 25 years of organi-
zational justice research. Journal of Applied Psychology, 86, 425–445.
Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Hunt, Steven T.. Common Sense Talent Management : Using Strategic Human Resources to Improve Company Performance, Center for Creative
Leadership, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=827115.
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Weekly Lecture |
Week 2 will focus on several issues related to people performance such as how a firm can evaluate the knowledge, skills, and abilities (KSA) of its employees. We will also examine how the goals of organizations need to be connected to the individual employee goals as well as how HR can assess the KSA’s of its employees to make improvements.
Knowledge is the subjects, topics, and items of information of the employee that are applied directly to the performance of work functions. Essentially an employee’s understanding of certain information. Skills are typically defined as the technical or manual abilities which are usually learned or acquired through training by the employee. Last, the abilities are the demonstrable capacity of the employee to apply knowledge and skills simultaneously to complete a task or perform the employee’s job functions. (Hunt, 2014). Accordingly, organizations and their HR department must ensure that potential candidates and employees with the most knowledge, best skills and abilities are recruited, selected and retained as employees into the organization. Additionally, organizations should continue to empower and develop employees through their tenure with the organization. If the organization, employs the best suited employees based on KSA’s it will:
· remain competitive in the marketplace;
· reduce employee turnover rates; and
· align employee development with organizational objectives.
(Developing Employees, 2015). Aligning employee KSA’a and their training and development are connected to the overall success of the organization. Recruiting top candidates and hiring the right people with the best KSA’s to fit the organization is the first step; however, organizations need to continue the process with training of development of its employees as the needs of the business industry continue to change. For example, when new regulations are adopted by the government, organizations need to have employees who are ready to change and adjust to the new regulations or be able to properly train staff on regulations to ensure consistent compliance. Another example is how technology is ever changing and organizations need employees who will adapt to the new and often improved use of technology. Additionally, organizations should be prepared to ensure all staff are properly trained in the future.
More and more organizations have become goal driven with clearly defined organizational and employee goals. Goals for employees and the organization provides means to assess performance, as well as support future training and development. Therefore, HR’s role in performance development, to assess performance and track growth of employees, is critical to ensure organizational success “Employees assigned specific, difficult, yet achievable goals consistently outperform employees who are given no goals or nonspecific goals encouraging them to do their best.” (Hunt, 2014). Having employees perform to the best of their ability will in turn, provide a more productive organization with a competitive advantage. It will also provide a greater sense of employee satisfaction.
Please watch
Employee Development and Career Management (Links to an external site.)
, which will provide an overview on employee development.
References
Developing employees. (2015, July 23). Retrieved from
https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/developingemployees.aspx (Links to an external site.)Links to an external site. (Links to an external site.)
Gregg Learning. (2016). Employee Development and Career Management. Retrieved from
Employee Development and Career Management (Links to an external site.).
Hunt, S.T. (2014). Common sense talent management. Hoboken, NJ: John Wiley and Sons, Inc.