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Top 12 Performance Management Goals & Objectives

Wondering how your organization’s objectives compare to others? Here are 12 common performance management goals for organizations of all kinds.

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Goal-setting is crucial for all organizations. Not only do goals define what your version of success looks like, but they also provide direction for your day-to-day operations, and align resources with priorities. Absent a set of clear goals, your organization is operating without purpose.

Your performance management goals—those that define what your organization wants to achieve over the next three to five years—should be based on your overall strategic plan. So while your own goals, and the KPIs and initiatives that support them, should be specific to your organization, there are some goals or objectives that are commonly used across industries. Below are 12 examples of performance management goals that might serve as a basis for your own goals, with some tweaking to match your organizational strategy.

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12 Performance Management Goals

In order to be successful with performance management, organizations must implement a framework to see that their performance is actually being managed.

The 12 sample objectives of performance management that follow are arranged according to the four perspectives of success used in the Balanced Scorecard (BSC) framework: financial, customer, internal processes, and learning and growth. And because the BSC framework directly connects goals with measures and projects, that’s how we present our example goals, along with sample KPIs and some projects to match. Here’s how BSC connects the dots, so to speak:

  • Goals (also known as objectives) are what you’re trying to achieve.
  • Measures (aka KPIs) track your progress in achieving the goals.
  • Initiatives (aka projects) are the actions you’re taking to accomplish the goals.

While the examples below are arranged according to the four BSC perspectives, that doesn’t mean they aren’t applicable to organizations using other frameworks. (You can read about other strategic planning models here.) No matter what lens you view your strategy through, creating goals that strive to move your organization forward in multiple ways will better position you for the future. (You can read more about corporate performance management here.)

We’re often asked by our clients how many goals they should have. Our answer: Usually two to four aligned with each of the perspectives is on point. Additionally, you need at least a couple of KPIs matched to each goal, and a supporting initiative for each. The more actual data you have that supports those goals the better.

Pro Tip: Many organizations create goals without putting much thought into the KPIs that should align with them. Very often, the KPIs they think will show progress are not as relevant as they seem, and won’t provide the right kind of insight. Read up on the various methodologies for developing KPIs, and spend time crafting ones that effectively support your business goals.

Financial Perspective

Financial performance is top of mind for for-profit companies, and even nonprofits and governments rely on incoming revenue to continue operations. That’s why the financial perspective usually appears at the top (or near the top) of most Balanced Scorecards.

The following are three finance-related examples of performance management targets; all are of equal importance in achieving financial health.

  1. Increase revenue. Your specific objective may emphasize growth in a particular vertical, product, industry, or geography.
    • KPI: Revenue in target markets
    • Initiative: Identify new target markets—where are the opportunities? If completed successfully, this project would help accomplish the overall goal of increasing revenue.
  2. Decrease costs. Objectives focused on cost may emphasize product expenses, overhead expenses, the cost of a particular business channel, etc.
    • KPI: Operating costs
  3. Increase profits. For-profit companies may set a target profit, or work to increase their profit margin.
    • KPI: Net profit

Customer Perspective

Organizational performance isn’t only about revenue. Customers are crucial for strategic success (and your bottom line). The theory behind this perspective is that you have to make your customers happy to sell them products and services; and in order to make your customers happy, you have to understand them. For nonprofits, your “customers” are the recipients of your services, and for local governments, they are your residents. Three typical customer-related goals are:

  1. Improve your market perception. What customers think about your brand has a major impact on your success. You might try to improve their perception at some particular stage of the consumer journey (the familiarity stage or the purchase stage, for example).
    • KPI: Percentage of market share index
    • Initiative: Implement a push for more customer reviews in hopes of increasing brand recognition.
  1. Improve the customer experience. Good relations with customers, citizens, or service recipients is integral to running an organization successfully. For this objective, you’ll want to hone in on a particular aspect of the customer experience you hope to improve, such as problem resolution or customer service.
    • KPIs: Customer satisfaction, customer retention, purchase frequency
  1. For local governments: Improve the safety and security of the community. Safety contributes directly to quality of life for citizens, making this a popular objective for local governments.
    • KPI: Crime rate
    • Initiative: Improve emergency/disaster preparedness and response.

Internal Process

This perspective focuses on the things you need to do internally to be successful as an organization. It covers a variety of areas, from streamlining workflows to automating processes to becoming more innovative. Shining a spotlight on your internal processes can help you identify areas that may be holding you back from providing the greatest value to your customers in terms of efficiency, cost, and quality.

  1. Manufacturing excellence. Continuously improving your operations to gain a competitive advantage is a common goal, particularly for manufacturing companies.
    • KPI: Unit cost
  1. Improve product development. The process of developing new products is complex and difficult; problems in this area could produce unexpected costs, customer dissatisfaction, or other issues. Examine your marketing methods, product design, product launch plan, and other aspects to find areas where there’s room for improvement.
    • KPI: Percent of sales from products that were developed in the last 18 months
  1. Implement process automation. Many organizations are using new technology to automate time-consuming manual processes.
    • KPI: Number of units produced per full time employee
    • Initiative: Identify inefficient processes for possible automation.

Learning and Growth

Your organization’s ability to continue to improve and create value revolves in large part around your workforce. Goals within this perspective focus on building and strengthening your human capital, so you can continue to be successful as an organization. Three common objectives of performance management in this area are:

  1. Ensure we have skills for the future. Top-performing organizations constantly focus on the future and train or hire to ensure they have the right people to execute the strategy of tomorrow.
    • KPI: % of key jobs filled
    • Initiative: Create new training courses that address areas where your workforce is lacking in skills.
  1. Empowered workforce. Empowered employees feel like they can freely make decisions and take ownership of their role; improvement in this area can reduce attrition.
    • KPI: % employee turnover
  1. Improve organizational culture. Your culture may be consensus-driven or performance-focused. Either way, you need to live that culture and keep it thriving in your organization.
    • KPI: Employee survey results or # of nominations for internal culture-based awards
    • Initiative: Hold more activities and train more on the culture and values of the organization.

Conclusion

Most organizations allow three to five years to achieve long-term goals like the ones outlined above. But remember to review your goals periodically—along with your measures and projects—to make sure they remain relevant. And even though some of these goals might remain consistent through new cycles of your strategic plan (like the goal to increase revenue) look at adding new KPIs and projects every so often to attack them in different and innovative ways. It’s entirely possible that your KPIs and projects might change on a yearly basis, instead of every three or five years.

Creating performance management goals is just the beginning of the strategic management process; there’s plenty more work to be done in terms of tracking performance and reporting on it. Our website has numerous resources to help you with every aspect of performance management, including:

Whether you’re a for-profit company, a nonprofit, a healthcare organization, or a local government, ClearPoint has all the tools you need to plan—and carry out—your strategy successfully.

Top 12 Performance Management Goals & Objectives
 

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