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Motivation by Career Development

By: James M. Wilmott
Posted: October 14, 2008, from the June 2006 issue of GCI Magazine.

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One also can ask whether the initial goals were realistic in light of prevailing priorities of the organization. The overall level of goal completion then can serve as the basis for the amount of raise or bonus employees will receive in recognition of their efforts to support the organization’s success during the preceding year. The establishment of relevant goals is a critical step in making the performance evaluation meaningful. These must be coordinated with the strategic objectives of the company.

Corporate management must set these objectives clearly. Inevitably the strategies evolve from the company’s mission statement. Unfortunately, such statements often are very general in their wording since it is the view of the organization from 60,000 feet. The strategic direction set by lower management should complement the mission statement. For example, the statement “maximize the potential of every member of the staff” helps support the desire of the company to be number one, and it also fulfills the part of the second phrase of improving the lives of its employees. Such strategies are usually prepared for enhancing corporate image, staff development, financial expectations, product or service offerings and short- and long-term vision.

Objectives or goals are the clarification of the designated strategies. For example, a financial strategy might be to optimize shareholder value by enhancing operating margin; increasing earnings before depreciation, interest and taxes (EBDIT); maximizing revenue; or some other financial measure. An objective of this strategy would be to grow sales by 50% in the next five years, or to increase EBDIT from 8% to 10% in two years. The goals of every department in the organization must tie into the corporate goals. The steps each level of the organization will take to achieve these goals are specific to the department, or the individual, and define the tactics that will be used to achieve the corporate goals.

Once employees fully understand the corporate strategies, corporate objectives and their department goals, then they can, and should be, an active participant in drafting their specific goals and tactics for the upcoming year. When both management and the employees accept these goals, they become a contract for expectations during the upcoming year. With regular review, both the supervisor and employee can monitor progress throughout the year. This contract is a dynamic document and should be modified periodically to ensure that it still is germane to the corporate objectives. An employee’s goals and objectives then serve as the basis for the yearly performance review. Input from both supervisor and employee are critical in order to keep the living document alive.

No Surprises

The results of a year-end performance review should never be a surprise. In fact, a sizeable part of the review can be completed by the employee and enhanced with input from others in the organization.