Define The Vision, Mission, Goals, And KPIs
As a leader, you must take deliberate steps for growth every day. This growth can begin with yourself and spread to your team and your organization. Growth means you and your organization are evolving, learning, and pivoting so that you can successfully navigate new and unknown contexts. This series of articles titled “Growth Blueprint” explores the key tactics to foster such growth. This article focuses on planning for performance. After reflecting on results, you can leverage all the learnings and successfully plan ahead for performance results.
What Is Performance Planning And Why Is It Important?
Performance planning is the process of setting strategic goals, allocating resources, and enabling and empowering employees to implement the necessary actions to achieve those goals and deliver the products and services that customers want. Performance planning is important because it helps organize, set, and monitor the people, processes, and resources of an organization around the products and services that customers need and want.
There are several performance planning models, depending on the frequency of review and monitoring of goals. For example, the traditional model includes annual goal setting at the beginning of the year and an annual review of individual performances and how they contribute to overall goal achievement. This model works best for organizations with little employee turnover. In contrast, the biannual performance planning and review model takes place twice per year and works well for organizations that pivot frequently or aim at fast-paced growth. A third model is the project-based performance planning and management process, whereby production centers around short-term projects.
It is critical to conduct performance planning correctly to avoid pitfalls and misdirection. According to McKinsey, performance planning can go wrong if organizations set the wrong goals, measure the wrong metrics, and avoid transparency. Another major failure is setting up a performance planning strategy that is process-centered versus employee-centered. Having an employee-centered process is crucial because employees are the ones who drive performance achievement. Below are ten steps to follow to set up an employee-centered winning performance planning process:
1. Define the Mission
Define the vision and mission of the organization centering on the customer’s needs and wants. Set the vision and mission of the organization around the customer and their needs and wants.
2. Set SMART Goals
Set specific, measurable, achievable, relevant, and timely (SMART) goals that articulate the vision and mission of the organization, departments, and individual employees. The key secret of performance planning is that it is people-centered. On one hand, the vision, mission, and goals need to be customer-centered. On the other hand, the goals need to be employee-focused, because it is the employees that will do the work to get the organization from where it is today to where it needs to be based on the performance plan.
3. Define KPIs To Measure The Goals
Defining the Key Performance Indicators for each goal is critical because it enables the organization to set a number or range of achievements and set the tempo to get there. The KPIs also serve as benchmarks for the ability of the organization to meet or exceed its goals during a given year.
4. Define Employee Needs
Define the key competency skills, motivators, and culture employees need to achieve the goals. Defining the competency skills and motivators within the context of the right culture is foundational in empowering customers to succeed.
5. Measure the Competency Skills Gap Of Employees
Building self-assessment against the competency skills model can serve as a starting point for measuring the competency skills and related gaps employees may have. Self-assessments enable employees to evaluate themselves. Most people either under-evaluate or over-evaluate themselves, so you will need to implement a margin of error on either side of the scale to account for this phenomenon.
6. Offer Learning Opportunities And Pathways For Employees To Close Their Skills Gaps
Offering curated personalized learning pathways and learning opportunities to employees is critical, because you offer each employee the opportunity to learn and grow, and you also create a culture of continuous learning, which is vital to sustainable and enduring growth.
7. Motivate And Incentivize Employees
Provide motivators to encourage and incentivize employees to drive organizational goals through their individual performance plans. Skills are not the only driver of employee performance. The other two elements include rewards and recognition to drive extrinsic motivation, and organizational infrastructure, which includes tools, resources, opportunities, and mechanisms that enable employees to succeed towards the performance plan goals.
8. Measure employee contribution
Monitor and measure employee contributions and progress towards the strategic goals set in step 3 above. As renowned business luminary Peter Drucker said, “If you can measure it, you can manage it.” The maxim applies here, whereby you will need to establish data gathering mechanisms and put them in place to collect relevant and meaningful data against the KPIs set in step 3.
9. Adjust your plan
Adjust the plan as you see fit to enable employees to continue delivering results. As you continue to review the data collected, you will be able to gauge how close the organization is to the KPIs set for each goal and make adjustments as necessary. This means that you do not change the KPIs in the middle of the year, but rather make notes about how the organization is performing towards the goals.
10. Review The Data
Review both qualitative and quantitative data to evaluate and report progress quarterly, biannually, and annually against the KPIs and targets. Reviewing both quantitative and qualitative data against the KPIs is critical. This means that you will not only look at the “numbers” but also the feedback customers provide in their evaluations of your products and services.
Performance planning is important and can be complex, depending on the size and structure of an organization. A key element most organizations miss is that performance is people-focused: it is centered on customers and driven by employees. Therefore, the performance goals and the KPIs to measure them need to be structured around people first rather than processes. Performance planning is a crucial forward-thinking exercise and practice that helps the organization forge a path for enduring growth.