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Chapter Five

Doing the Right Things

Becoming a Goal-Driven Organization

Focusing people on the right things is basically about good goal management, which is among the most powerful methods companies have to execute business strategies. Hundreds of studies have examined the impact of goal management on workforce productivity (see the discussion: “Goal-Setting Theory and Research: A Three-Hundred-Word goals consistently outperform employees who are given no goals or nonspecific goals encouraging them to “do their best.”

The basic concept of goal setting is so straightforward it almost seems silly: employees are much more likely to do what you want them to do if they (1) know exactly what it is you want them to do, (2) believe they can do it, and (c) are motivated to do it. Yet virtually every employee can tell stories about jobs where they were not sure exactly what they were supposed to do or why it mattered.

1- WHAT IT MEANS TO BE A “GOAL-DRIVEN” ORGANIZATION

Being a goal-driven organization means ensuring that all employees are focused on achieving clearly defined goals supporting the business needs of the company. This is not simply a matter of communicating the company strategy to every employee. The personal interests of individual employees should be clearly linked to the success of the entire organization. Being goal driven requires engaging employees at all levels of the company in meaningful discussion to identify what they can achieve that will help execute the company’s business strategy, tying these to their personal job interests, and then holding them accountable for the commitments they make to support the business’s overall strategic mission.

2- THE ROLE OF GOALS IN AN INTEGRATED STRATEGIC HR SYSTEM

Goal management plays a pivotal role in converting business strategies from lofty, long-term aspirations communicated by senior leaders into tangible commitments and deliverables owned by employees at all levels of the organization. But companies often fail to maximize the value of goal management by allowing it to become subsumed within other strategic HR processes such as performance management or career development. This tends to occur when companies confuse the management of goals with the management of learning objectives and competencies.

The relationship of attributes, competencies, and goals can be summed up as, “What you achieve [goals] depends on how you act [competencies], which is largely determined by who you are [attributes].” Attributes, competencies, and goals are managed using four fundamental types of HR processes broadly focused on right people (staffing), right things (goal management), right way (performance management), and right development (career management).

GOAL MANAGEMENT CRITICAL DESIGN QUESTIONS

All companies use some form of goal setting to direct people’s efforts on the job. The question is not whether to set goals but how to do it effectively. To truly leverage the power of goals, companies must put thought into designing goal management processes that make the most sense for their particular jobs and business needs.

1- How Will You Ensure Employees Have Well-Defined Goal Plans?

Research has shown that employees often struggle to understand exactly what it is they are expected to do when they show up on the job. 4 This lack of goal definition decreases employee productivity and retention, increases anxiety around role clarity and value, and raises the potential for internal conflict and organizational politics around responsibilities and accountability. In fact, the survey question, “I know what is expected of me at work,” strongly correlates with employee engagement and employee turnover. The most direct way to address problems caused by lack of clear goals is to ensure employees and their managers sit down on a regular basis to define the goals employee are expected to accomplish.

Creating a Well-Defined Goal Plan

Many employees do not think of work in terms of discrete, well-defined goals. Even highly experienced employees can find it difficult to summarize their roles in terms of a short list of succinct, well-defined, and measurable objectives. Fortunately, there are at least three ways to help employees create well-defined goal plans: (1) provide goal libraries, (2) communicate criteria for creating and evaluating goal plans, and (3) train employees on goal setting methodologies.

2- What Are You Doing to Ensure Employees Feel a Sense of Commitment and Ownership toward the Goals They Are Assigned?

Goals will not have an impact on performance if employees feel little sense of commitment toward achieving them. Managers must remember that goal setting is not about telling people what to do. It is about working with people to clarify what needs to be done in a manner that builds commitment toward goal accomplishment. There are many ways to increase the motivational power of goals. The best and least expensive way is to ensure managers pay attention to three concepts when they work with employees to create goal plans: participative goal setting, managing goal difficulty, and addressing goal-setting anxiety.

Participative Goal Setting

One effective way to build goal commitment is to use participative goal setting. This technique requires managers to meet with employees to discuss what goals make the most sense given their capabilities and the organization’s business needs. Participative goal setting gives employees a sense of influence and buy-in over the goals that are assigned to them. The opposite of participative goal setting is to simply assign goals to employees without their participation. When it comes to motivation, there is a big difference between telling people what to do compared with talking with them about what they should be doing.

Managing Goal Difficulty

Goals have the strongest impact on productivity when they are difficult but achievable. Managers should challenge employees to set ambitious goals where a successful outcome is possible but not certain. But managers also need to be sensitive to stress caused by having too many challenging goals. Goal plans ideally include a mixture of difficult goals along with goals that are important but not as challenging. The less difficult goals provide employees with a sense of balance and confidence that they will be able to meet their job expectations.

Addressing Goal-Setting Anxiety

If employees are not used to setting goals, they may have concerns about how the goals will be used. The best way to address this is to clearly communicate why the organization is implementing more rigorous goal management methods and how these methods will help employees to be more successful. The following are several benefits to help employees understand the value they personally gain from adopting goal management processes in their organization.

Improving Strategic Communication

Well-defined goal plans clarify what people are working on and how it relates to the company’s business strategy. Goals establish priorities for employees. They also help employees communicate to their peers and leaders what they are doing to support the company’s strategies. To reinforce this message, let employees know who will be looking at their goal plans and how this information will be used to guide company decisions.

Fairly Evaluating Performance

Goals provide a clear and transparent method for evaluating employee contributions to the organization. They reduce reliance on subjective opinions or ill-defined criteria when making decisions about pay, promotions, or job assignments. To emphasize this point, let employees know how goal accomplishment will be used to guide pay and promotion decisions.

Managing Workloads

Rigorous use of goals protects employees when there are changes in the business. Having clearly defined goal plans reduces the risk that managers will ask employees to take on additional responsibilities without discussing how this has an impact on their existing commitments. To emphasize this, establish guidelines for updating employee goal plans during the year to reflect shifting organizational priorities.

3- What Methods Are Used to Align Employees’ Goals with Company Business Strategies?

Goal management is not just about making sure employees have well-defined goal plans. It is also about making sure these plans align with the overall objectives of the company. This requires ensuring that goal conversations between managers and employees incorporate information about company strategy. There are three primary methods for doing this: establishing goal categories, using prepopulated goal plans, or implementing goal cascading. Each has its own strengths and weaknesses. Establishing goal categories is the easiest but least effective. Creating prepopulated goal plans provides the most clarity to employees but is the most difficult to maintain.

Goal Categories

This method starts with identifying broad categories of goals that the company needs to address to support its business strategies (e.g., financial performance, customer service, safety). Employees are then instructed to set goals that fit into some or all of these categories.

Predefined Goal Plans

Predefined goal plans are preset combinations of goals developed for specific jobs or groups of jobs based on company strategy. Employees are assigned predefined goal plans based on their role in the organization.

Cascading Goals

Goal cascading is a method for communicating business strategies so all employees in the company understand the role they play in strategy execution. The goal-cascading process starts when senior leaders set their goal plans based on company strategy. Leaders share their goal plans with their direct reports, who in turn set goals that align with and support those of their supervisor. By doing this, companies can ensure that employees at all levels are working on goals that link back to the organization’s overall strategic initiatives.

4- How Is Employee Goal Accomplishment Measured?

If goals were perfectly defined, there would be no reason to discuss measurement of goal accomplishment. Goal accomplishment would be self-evident because you could simply examine a goal and determine whether it was or was not achieved. But the reality is that most goals are not so well defined.

5- What Is the Relationship between Goal Accomplishment and Employee Pay, Promotions, and Recognition?

Goals define what people are expected to do in their jobs, so goal accomplishment should naturally play a central role in decisions related to compensation, promotion, and other forms of recognition used to reward and retain employees. Linking pay and promotions to goal accomplishment increases the meaningfulness of goals, reinforces organizational priorities, and creates a more consistent, transparent, and fair process for making personnel decisions.

6- How Are Goals Used to Support Employee Development and Career Growth?

Effective goal setting requires striking a balance between what the company needs to accomplish, what employees can do, and what employees want to get out of their jobs. Pay and promotions are part of this equation. But another powerful and often overlooked way to increase the motivational value of goals is to link them to an employee’s career objectives.

CONCLUSION

Goal management is one of the most powerful and most underused tools for driving business execution. This chapter has explained why goals are critical for business execution and provided guidelines for answering critical questions that underlie the design of effective goal management processes. All companies use some form of goal management, but few do it extremely well. Companies that make a concerted effort their competition.