Employee Alignment is the new driving force in Human Capital Management. This White Paper discusses Employee Alignment benefits and processes.
Employee Alignment is the outcome of effective Employee Performance Management. It is the result of a set of processes that better communicate the organisations objectives and desired behaviours to the employee. Better communication assists both the employee to achieve the defined objectives, activities and behaviours but also allows the organization to rate how well the employee achieved these objectives.
Employee alignment is sometimes confused with an employee appraisal process where the employee is rated against a set of competencies. The distinction can be readily made between Employee Performance Management and Employee Appraisal. The Appraisal process does not achieve alignment as there is no objective or goal setting at the start of the process. Goal setting is critical to communicating objectives to the employee and, therefore, achieving alignment to the Strategic or Operational plan.
“Human Resource systems, designed to provide clear objectives for employees do not typically align to Strategy… Only 7% of U.S. Line Employees (and 3% in the U.K.) had their personal goals linked to Strategy” - Robert S. Kaplan and David P. Norton, The Strategy Focused Organisation, Harvard Business School Press
Employee Alignment starts with the organisations Strategy. The organisation needs to formulate a Strategy in order for employees to understand their part of the strategy. This Strategy then needs to be broken down into objectives for each operating entity or department in the organisation. By breaking the strategy down into objectives for each department, the line manager for that department can then set objectives for each one of his/her team members.
By communicating and setting objectives with each employee, employee engagement increases dramatically. This is because employees now understand their part of the plan, provided the objective setting process has been conducted correctly.
In addition to setting objectives, employee alignment is reinforced through the use of pay for performance. If an employee achieves his/her goals, then a certain proportion of their variable pay is paid to recognize that the employee has achieved the objectives and should be recognised.
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