Organization-centric vs. people-centric goal alignment

Organization-centric vs. people-centric goal alignment

In today's economy, the need to align your workforce through goal management so you make the most of your most strategic asset is paramount. There are two common models for implementing organizational goal management: the people centric model and the organization centric model.

People-centric goal management defined

In a people centric goal management model, goals are assigned to individuals starting at the top of the organization hierarchy. Goals are "cascaded down" as each employee is assigned goals that help their manager or supervisor achieve his/her goals.

So for example, the VP of Sales and Service might have a goal to: Increase customer satisfaction to 90%. The Director of Customer Service who reports to the VP could be given a linked goal to: Reduce the response time to customer email queries to 1 day. A Customer Service Manager who reports to the Director might then have a linked goal to: Provide training to all their staff to increase product knowledge.

The challenges of people centric goal alignment

There are three inherent challenges with the people centric model of organizational goal management.

  1. Goal setting must proceed in a descending hierarchy, with everyone waiting for their managers' goals to be set before they can set their own. This linear, hierarchical process can take significant time.
  2. Employees only see the impact of their contributions to their manager's goals, not to the organization's overall goals, and are therefore committed to their manager's success, not the organizations.
  3. If a person leaves the organization, or moves to a new role, the hierarchy of cascaded goals is broken and must be reestablished - which can be a time-consuming task for everyone involved.
  4. Tends to be a once-per-year activity because of the time commitment and complexity.

Organization centric goal management: a better way to achieve goal alignment

In an organization centric model, goals are set for the organization overall, then broken down across the organizational hierarchy; sub-goals can be set for divisions or business units.

These high-level goals are then communicated to all employees, and employees are encouraged to establish individual goals that support these high level goals.

Following our earlier example, the organization would set itself a goal to achieve 90% customer satisfaction. John, who works in assembly, can link his goal to achieve less than 5% defects to the organization's customer satisfaction goal. The Customer Service Manager can link his goal to improve his department's response time on customer phone calls to an average of 1 minute, etc.

The organization from a reporting standpoint can have visibility of every employee who has an individual goal that is linked to the customer satisfaction goal. The executive team should regularly monitor and communicate progress on that goal to the entire organization. This monitoring and communication helps give employees a sense of contribution and direction.

Advantages of the organizational centric model

There are several strategic advantages to an organizational goal management approach:

  • Goal setting for everyone in the organization can begin as soon as the high level organizational goals are created.
  • Goals can be linked across the organization, allowing for more breadth of contribution and a more detailed understanding of the intricacies involved in achieving the goal.
  • Goal links are not affected by changes in staffing or organizational structure, because high-level goals belong to the organization, not an individual.
  • Employees at all levels of the organization have clear visibility into how their work impacts organizational success, enhancing their accountability and engagement.
  • Executives can easily see individual goals that are linked to organizational goals and can monitor progress on these.
  • Changes to business priorities can be managed easily and do not restrict employees from working on common goals.
  • The focus is on organizational success rather than individual success.

Read how others have successfully aligned their workforces

At CarVal Investors, the top leadership team is now more explicit in articulating, capturing and communicating corporate objectives. Individual and departmental goals are now firmly aligned with corporate goals.

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