Companies that are more effective at implementation -- of business strategy, pay for performance, change, communication -- deliver higher Total Shareholder Return. This is Part 3 of a series on research that can help your company get better at implementation.
The World's Most Admired Companies act like they actually want something to happen. They take performance measures seriously. Yep, that means they closely manage their objective setting process.
1. Most Admired Companies have a well-defined approach to performance management.
As Hay Group's research indicates, 93% of the Most Admired Companies have a clearly defined global approach to performance management, compared to 74% of their peer group. That means almost all know the outcomes they want to achieve through performance management and track whether they have achieved them.
Odds are, they define what a high quality objective looks like and can give functional examples. Senior management plays a visible role. Objectives are submitted on time. Measures are checked to ensure they will impact business results. Everyone talks the same language about performance management.
2. Their performance management approach involves linking performance planning with their strategy.
3. This may be the most powerful finding -- the Most Admired Companies use performance management to help employees understand HOW to balance short-term and long-term priorities.
Ah, the power of alignment. Most Admired Companies expect their business priorities to drive performance measures. Compared to their peers, they pay more attention to measures beyond the short-term delivery of growth and profitability. Operational excellence reiterates their long-term focus. Performance measures address the customer needs, so all employees can direct their efforts towards the customer. And they include measures that encourage focus on "Human Capital" issues like management skills, career development, performance management, and so on, so their leaders and managers know they are serious about it.
How do they help their managers prepare performance measures and conduct performance management? In my next post, we'll look at what Towers Watson's research tells us. Their topic is, "How Top Companies Create Clarity, Confidence and Community to Build Sustainable Performance."
Margaret O'Hanlon is founder and principal of re:Think Consulting. She has decades of experience teaming up with clients to ensure great Human Resource ideas deliver valuable business results. Margaret brings deep expertise in total rewards communications and change management to the dialog at the Café. Before founding re:Think Consulting, she was a Principal in Total Rewards Communications and Change Management with Towers Perrin. Margaret is a member of the Board of Directors of the International Association of Business Communicators (IABC), Pacific Plains Region. She earned her M.S. and Ed.S. in Instructional Technology at Indiana University. Creative writing is one of her outside passions, along with Masters Swimming -- she swam two miles yesterday!
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