| It used to be that performance management was | | | | be identified and responsibilities accounted for. For |
| managed in one department. Today, performance | | | | instance, a performance measure that includes |
| management has spread throughout the entire | | | | percent of collections over 30/60/90 days might be |
| organization, where almost every division must focus | | | | applied both to accounts receivables clerks and sales |
| on performance management to some degree in | | | | representatives, thus sharing and integrating |
| order to be successful. Despite this wider range of | | | | performance measures, encouraging collaboration and |
| performance management, enterprise-wide | | | | boosting overall performance. |
| performance initiatives are not widely practiced. And | | | | Workforce Performance Alignment |
| without an enterprise approach, it is extremely difficult | | | | When workforce performance is aligned with |
| to align your performance to organizational goals and | | | | corporate objectives individuals in an organization |
| objectives. | | | | develop a stake in that organization's performance. |
| According to software vendor SAS, a recent survey | | | | Employees at every level are measured by something |
| of 1100 businesses revealed that performance | | | | they understand and control, and that same measure |
| alignment was the PRIMARY benefit companies | | | | is clearly linked to the goals of their direct supervisor |
| hoped to receive from their performance | | | | and the organization as a whole. |
| management efforts. Aligning performance to your | | | | Financial Performance Alignment |
| organization's goals and objectives is critical to your | | | | In an economy where results need to be achieved |
| organization's success. On the other side, lack of | | | | fast and investor confidence is low, CFOs and finance |
| alignment increases inefficiencies and risks and | | | | organizations are implementing integrated performance |
| prevents optimal execution of the organizational | | | | management to improve information quality and |
| strategy. | | | | visibility. One challenge organizations face aligning |
| Think of this scenario as a model for linking corporate | | | | performance is finding financial measures that are |
| strategy to business objectives: | | | | meaningful to those responsible for carrying out the |
| The executive board collaborates high-level strategic | | | | work. Using the previous example net cash flow is a |
| planning and identifies goals for the CEO and | | | | critical performance measure for executives, but it |
| organization. The CEO then meets with his/her senior | | | | probably means very little to the accounts receivable |
| executives who in turn develop objectives derived | | | | clerk who has no idea of how their contribution |
| from the CEOs goals and integrates those goals into | | | | improves net cash flow performance. Stick with simple |
| the strategic plan. In turn, those executives meet with | | | | financial metrics that employees can understand and |
| their managers who develop objectives derived from | | | | control. |
| the strategic plan, and so on. Then, each subordinate | | | | System Performance Alignment |
| goal is tied to one or more goals of their manager. | | | | The IT/IS department's role is to provide technical |
| Ideally, the final result is that every tracked goal in the | | | | support for the entire organization. While we know that |
| entire company can map back to a corporate | | | | this alone is a complex task, today's business model |
| objective developed by the board. | | | | requires systems to not only support users, but to align |
| Chances of organizational success are greatly | | | | technology to meet the business needs of the |
| increased by translating each high-level objective into a | | | | organization. Understanding business unit objectives |
| cascading series of focused performance measures. | | | | and translating them quickly and accurately into IT |
| Using our previous example, the CEO may focus on | | | | priorities is essential today. So how does an |
| net cash flow while the CFO looks at debt-to-equity | | | | organization measure how well their systems are |
| ratio. The controller may focus on liquidity ratio, while | | | | aligned to organizational objectives? By implementing |
| the accounts receivable manager looks at days sales | | | | vehicles for aligning and measuring IT performance, |
| outstanding, and the accounts receivable clerk worries | | | | such as service level agreements, performance-based |
| about percent of collections over 30/60/90 days. | | | | contracts, and products and services catalogs to |
| This article discusses aligning corporate strategy to | | | | generate reports that illustrate how well they are |
| four key areas: departments/ divisions, workforce, | | | | measuring up to business objectives. |
| finance, and systems. | | | | If you can move closer to aligning performance in |
| Departmental Performance Alignment | | | | these areas your organization will be well on it's way |
| Departmental performance alignment can be difficult | | | | to surpassing all of it's goals and objectives. While the |
| when business processes within an organization span | | | | goal of a performance initiative is to align performance |
| across multiple business units and functional support | | | | to organizational strategy, it is most important to |
| groups. To avoid bottlenecks, finger-pointing, and | | | | maintain flexibility and adapt to organizational changes |
| redundancy of work, shared performance measures | | | | quickly. |
| that align people across organizational boundaries must | | | | |