The upper and lower goals should be consistent

Robert Coon has just been hired by Daisy Systems Corp. to run its human resources department; he's due to meet the CEO soon. This company executive is also a new face to the company. When he got on the bus, he declared that he wanted to make Daisy's company jump from the second position in the industry to the top spot in one fell swoop.

Like other department leaders, Kuhn walked into the CEO's office and handed him a list of department goals for the coming year. The CEO reviews the goals, numbered 1 to 10, and approves them. But he was puzzled by a list of seemingly unrelated numbers. "What is this?" he asked.

"The numbers in the column on the left are related company goals supported by my departmental goals," Kuhn replied. He explained that emphasizing this number helps him and his department staff ensure that their labor contributes to the company's quest to become an industry leader. The CEO stared at the list for a long time, something he had never seen before. Half an hour later, he ordered: All vice presidents of the company prepare a similar target comparison list for their respective departments.

The source of the brand is the employee

This approach sounds logical and does not seem complicated. "Who would object to aligning functional goals with corporate goals?" Kuhn asked. In practice, however, almost no one does. Let's take a look at a recent survey conducted by the American Society for Human Resource Management and the Balanced Scorecard Collaboration (BSCol, co-founded by Robert Kaplan and David Norton, who developed the Balanced Scorecard theory). According to the survey, 73% of companies claim they have a clear strategic orientation, yet only 44% of them communicate it well to those employees who must fulfill the strategic orientation. In many cases, these companies are like human bodies whose brains don't know what to tell the body to do.

Jac Fitz-enz, founder of management consulting firm Saratoga Institute, says there is too much theoretical discussion about how to tie corporate goals to departmental and individual goals, but not a set of methods for evaluating performance. Manage and measure to increase employee motivation, without even helping employees understand the meaning of company goals. In many cases, it is believed that company goals apply only to senior managers, not front-line employees.

"Typically, employees at the clerk level are just receiving assignments from above, and they don't know how their day-to-day work impacts the company's long-term goals." Menlo Logistics, which now has a turnover of $4.9 billion According to Kuhn, the company's vice president of human resources, "the vision of the top executives, such as the CEO, is never communicated because people don't know how it will affect their day-to-day work."

Management consultants use "human capital" Brand building" to describe the results when employees understand how their personal roles are closely related to the company's mission. While most companies define their brands by their products and services, Fitz-Enz argues that companies are actually defined by the productivity, quality, and service of their human capital, that is, by their employees. Long-term employee performance is what truly drives brand differentiation and profits.

However, experts claim that few companies have taken the important step of linking the "brand" the company offers to the public with the behavior of employees who deal directly with customers. "Many companies still believe that if they change their ad, they can change their brand image," says Mark Wong, a regional partner at an advertising agency who also teaches employee branding courses at a university. Roles should start from the inside. If even employees can't agree with the message the company wants to convey, how can it resonate with consumers?"

Targeted communication is important

Medical products and services provider Cardinal Cardinal Health's $51 billion annual turnover ranks among the Fortune 500, and Tony Rucci, executive vice president and chief administrative officer, employs an intuitive approach to measure and improve The company's human capital value. When a company treats its employees well, employees are able to serve customers better, resulting in higher profit levels and higher returns for their shareholders.

"It's not something inscrutable," Rucci said. Data from his experiments at Cardinal Health and his former employer, Sears, showed that employee satisfaction and customer satisfaction are leading indicators of a company's profitability and shareholder returns. Not only are there significant correlations between them, but the source of company profits is employee satisfaction.

The key is to determine what counts as being kind to employees. When you hear the phrase "treating your employees well," Rucci says, company executives take it for granted that employee satisfaction is largely determined by compensation levels. While compensation and benefits must be competitive, he found that measures such as whether employees understand company goals and how their work specifically helps the company achieve them are more important. Lugi measures employee satisfaction through 12 to 13 questions, including: Do I understand the company's strategic goals? Do I understand the connection between my job and my strategic goals? Is my boss willing to listen to my advice and act accordingly?

The study found that a 3.5 percent increase in Sears employees' scores on these 12 questions resulted in a 1.3 percent increase in customer satisfaction and, ultimately, a 0.5 percent increase in the company's bottom line. The practice of aligning individual employee actions with company goals has been replicated in thousands of Sears stores and has resulted in huge profits for the company. Management consultants and co-authors of The Human Capital Edge, Bruce Pfau and Ira Kay, identified six elements needed to successfully conduct this employee survey:

● Link the survey to business objectives, highlighting what the managers of each function consider important.

● Get senior management involved and accountable, rather than just viewing investigations as entirely a human resources task.

●Provide targeted data for each key department manager.

● Simplify the process, as overly complex surveys can be overwhelming.

● Conduct regular surveys and make the process part of business planning.

●Effectively communicate findings and actions taken. This step is often overlooked, leaving many employees feeling that their answers are not important.

Keep company goals simple

Experts believe that a company's vision and goals should be expressed concisely and clearly. "Companies need clear, inspiring goals that employees at all levels of the company can understand and relate to their jobs," says Ruchi. "Whether it's a CEO or a forklift operator, they need to know that they How hours of work tie into this clear, inspiring purpose."

Cardinal Health's vision is concise and centered around four main goals: Growth, Operational Excellence, Leadership Development, and Customer Engagement as a center. At the beginning of the year, when employees are drafting goals in management by objectives, they will be asked to indicate how at least one performance goal supports the four main company goals described above. More importantly, managers' performance will be assessed, measured and fed back against the four strategic objectives outlined above.

In addition, managers are required to conduct a 360-degree survey. The survey asked employees to rate a manager's performance by filling out a questionnaire to measure how his performance was linked to the company's four core values and how well the manager performed on 10 core leadership skills. Managers' 360-degree survey results will be compared with employee satisfaction results revealed by the 13-question survey. By comparing the information from these surveys, Cardinal can see how the company's actions to achieve its strategic goals affect employee satisfaction and the company's profitability.

Experts believe that goals should become increasingly specific as they are communicated from a company's top management down to lower organizations. Frontline employees need regular, quantified feedback, even a simple histogram of the department's performance over the past month.

"The board won't accept the president's statement: I think we're making progress, but it will take a few months for the details to be available to you. Directors want to see the specifics," Kuhn said. "However, let the front-line workers It's just as important to see the data."

When Kuhn was director of human resources at a $2 billion trucking company, every driver had access to this information. Company employees are entitled to a reward program based on the company's profitability. Drivers can see how each of their jobs—in terms of accident rates, productivity, transportation costs, delivery times, lost items, and absenteeism—affects company goals and profit levels.

"When a driver repeatedly delays deliveries, his colleagues are concerned about what's wrong because it affects their bonus," Kuhn said. The trucking company went on to become the most profitable of its U.S. peers, in part because the company passed on its vision to every employee.

Linking big and small goals

According to Wayne Keegan, Ingram's chief human resources officer, linking company goals to functional goals should involve the following three steps: A set of methods to understand the needs of "internal customers (that is, other departments or people in the company who need the support of the human resources department)", establish corresponding mechanisms to meet such needs, and set relevant indicators to measure their effectiveness. When Keegan joined Ingram, the world's largest wholesaler of books, audiobooks and periodicals, three years ago, it was following exactly that three-step plan. At the time, neither the company as a whole nor the organization of the HR department itself could keep up with the pace of today's book industry. The book industry has undergone tremendous changes with the proliferation of online book sellers, supermarket bookstores and specialty book retailers.

First, Keegan surveyed more than 400 executives, from CEOs to first-line supervisors, asking them to rate the importance of human resources work and their satisfaction with workforce management. Another survey of all employees reflected where HR was falling short of its stated goals. Conducting group interviews on the basis of the survey results more clearly reveals the human resource needs of each business unit and employees to achieve their own goals.

For example, a business unit complains that the human resources department is not responsive enough. Keegan immediately reorganized the division to provide a single point of contact for each business unit and established key teams in areas such as personnel, compensation, and training and development. HR staff attend meetings of the business units they support to better understand their business models and needs.

Keegan concedes that these measures are not very advanced, but it is not critical that they are not advanced. Human resources will never adopt so-called "new approaches" that do not directly support business plans and initiatives. For example, operations recently required all of its managers and employees to receive more training in process improvement. In the past, HR would provide standard classroom-style training for this requirement. However, with the company's emphasis on tying all actions to specific company goals, HR has gained a detailed understanding of the real needs of the operations and combined training measures on process improvement with specific projects. As a result, a distribution center's productivity increased by 31 percent, saving the company $1 million annually.

With the new organizational structure, survey data and performance indicators, HR can take a more proactive approach. Keegan is working to implement a new incentive system tied to the achievement of the company's goals, and a streamlined company structure that better responds to the rapidly growing book industry. A 25% reduction in senior management and a 17% reduction in middle management resulted in a net salary savings of $5.1 million a year. "If HR wants to have a seat at the table, it has to think in terms of profit like any other business unit," Keegan said. "The language of the C-suite is numbers."

Convey Vision by Perseverance

Instilling a company vision is hard work, sometimes requiring a complete change in the way people think and believe. Cardinal Health held a series of small "employee briefings" for its 55,000 employees around the world, covering topics such as the healthcare industry's competitive environment, the company's specific goals and its financial and profit model. "At the heart of all communications is how the company creates value for its shareholders, customers and employees," says Ruchi.

During these meetings, employees can speak up about what they have in mind about the company's core values. This allows employees to truly believe in the company's values, rather than suspect that the company is just trying to promote a non-existent company culture.

Menlo Logistics provides a website where employees and customers can disclose to the company the deeds of their employees who adhere to the company's core values. Most of the stories are about how employees provide innovative solutions to customer problems. The entire site is also a lot of fun to navigate, and everyone across the company can see how employees are contributing to the company's goals.

"When you feel that you have adequately communicated and communicated your vision and goals, you need to put in twice as much effort," Kuhn said. "If your gut tells you that is enough, you must It takes three times as much effort to really get the message across."

Sometimes managers need to get tough. Cardinal Health's Rucci says that every company typically has three types of employees: those who enthusiastically support the company's goals, those who obey the company's goals, and those who are deliberately opposed to the company's goals.

"The first 28 of my 32 years in management were spent trying to get the bottom third to change their minds," he said. "I wasted 28 years. These people hardly ever Allegiance to you. Reflecting on myself, I should be spending 99% of my time with people who agree with the company's goals, because they are the ones who drive change and innovation." As for that bottom third, Luigi would make it as soon as possible. They take responsibility. "I'll tell them: this is where we're going; you have six months to get there, and it's up to you to take this ride or not."

This shows the company's seriousness, and Ultimately motivated employees. "You have to communicate your vision succinctly, and then get people involved in making it happen," says Rucci.

Reprinted with permission from the December 2003 issue of Workforce Magazine. Crain Communications, Inc. Registered Copyright. Translated by Wei Li. Joe Mullich is a freelance writer based in California, USA.