Bersin by Deloitte: Effective Employee Goal Management is Linked to Strong Business Outcomes

Goal Clarity, ongoing review and accountability tied to positive business outcomes, supported by seven high-impact practices

Dec 17, 2014, 14:11 ET from Bersin by Deloitte

OAKLAND, Calif., Dec. 17,  2014 /PRNewswire/ -- Clear employee goals and ongoing management of those goals has a strong relationship with business outcomes, according to new research from Bersin by Deloitte. Summarized in a complimentary "WhatWorks® Market Brief," the research findings that appear in Bersin by Deloitte's new study "High-Impact Performance Management: Using Goals to Focus the 21st Century Workforce."

The research outlines three principles, and seven high-impact practices, for effective goal-setting and management processes. The three principles include enabling goal clarity, creating continued clarity through ongoing review, and making goals matter to employees. The research shows that organizations that make it easy for employees to set clear goals were four times more likely to score in the top 25 percent of business outcomes. Similarly, organizations that have employees revise or review their goals quarterly or more frequently were three-and-a-half times more likely to score in the top 25 percent of business outcomes as well. The research also found a substantial impact on business outcomes when employees feel vested in their goals and senior leaders create an environment of accountability for goal achievement.

"The link between effective goal-setting and management processes and business outcomes is especially important today as rapid changes in the business and technology landscapes have created the expectation that employees be more agile, autonomous and team-focused," said Stacia Sherman Garr, vice president, HR and talent research, Bersin by Deloitte, Deloitte Consulting LLP. "Creating a clear connection between employees' work and an organization's goals also is a key driver of employee engagement levels, which are currently extremely low in many organizations. However, our research shows that more than half (54 percent) of organizations report their employees only review or revise their goals once per year, if at all."

Further, while more than half (51 percent) of senior leaders convene a series of meetings throughout the year to discuss goals with business leaders, only 6 percent of those business leaders use the same engaging approach to communicate goals to their direct reports, including team and middle managers. And while nearly 60 percent of organizations said senior leaders revise their goals during the course of a year, only 36 percent of respondents indicated middle managers make similar revisions to align with new directions defined by their supervisors.

To help organizations turn the principles of effective goal-setting and management into action, the research identified seven high-impact practices. They are:

  1. Simplify goals: Limit the number of goals and avoid complex weightings that can reduce clarity on priorities.
  2. Clarify the goal-setting process: To create additional clarity, it is critical to combine three elements: a simply designed goal-setting process; timely communications, tools, and messaging; and technology that enables goal sharing.
  3. Increase employees' goal-setting capabilities: When employees help to create their own goals, they are more likely to have developed strategies to attain those goals and believe in their ability to do so—all of which makes goal attainment more likely.
  4. Communicate goals clearly: By effectively managing the communication of goals, leaders have an opportunity to build a culture and employment brand that emphasizes transparency, trust, and teamwork.
  5. Review goals frequently: Organizations that have employees revise/review their goals quarterly, if not more frequently, were three-and-a-half times more likely to score in the top 25 percent of outcomes.
  6. Connect goal-setting and career planning: When career management goals are integrated with productivity goals, employees likely have higher motivation to achieve their productivity goals because there is some learning in the process that they find interesting or beneficial.
  7. Enable senior leaders to drive accountability for skip-level goal achievement: The research shows that 77 percent of organizations in which senior leaders hold their direct reports accountable for supporting the goal success of the next level down achieve better than average business results.

Register to join Stacia Sherman Garr for her online webinar, Employee Goal Setting:  What You Need to Know, 2 p.m. EST/19:00 GMT, Feb. 26, 2015.

Those interested in learning more about Bersin by Deloitte or its WhatWorks® membership may email info@bersin.com or call +1 510 251 4400.

About Bersin by Deloitte

Bersin by Deloitte delivers research-based people strategies designed to help leaders and their organizations in their efforts to deliver exceptional business performance. Our WhatWorks® membership gives Fortune 1000 and Global 2000 HR professionals the information and tools they need to design and implement leading practice solutions, benchmark against others, develop their staff, and select and implement systems. A piece of Bersin by Deloitte research is downloaded on average approximately every minute during the business day. More than 5,000 organizations worldwide use our research and consulting to guide their HR, talent and learning strategies. For more information, please visit http://www.deloitte.com/bersin or http://www.bersin.com.

As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see http://www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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