What is Goalsharing? It a process whereby the objectives of the company are synchronized with individual employee goals such that in completing the personal goals, the employee is actually also contributing to achieving the company’s objectives.
Why is it important? It creates a team of committed employees all working towards the same objectives. It also creates a congruence between all employee and organization goals, rather than everyone doing their own thing.
A Goalsharing Program is composed of two parts – establishing and achieving goals, and earning rewards based on achievement.
Management normally develops and sets the overall objectives annually at the beginning of the year. Using these as targets, IPOs are established for each employee in partnership with the supervisor. Each individual IPO must be tied in some way to the corporate objectives in order for Goalsharing to be effective.
Progress towards fulfilling the IPOs should be monitored periodically, preferably monthly. It also makes sense to review accomplishment of all IPOs in a company-wide forum, at least quarterly. Celebrate successes and stay on the path of achievement.
Reward for performance is the second part of the Goalsharing Program. An ideal program, in my opinion, rewards employees not only for the achievement of company objectives, but also for successfully completing personal IPOs.
Why both? If the company wins, all employees should win. This is the first level of reward. On a second level, each employee needs to execute and be rewarded for it. It would be unfair if an employee who does not complete his or her IPOs gets the same reward as another employee who successfully does. Thus, an effective reward program is based 50% on company objectives, and 50% on individual IPOs.
As in any team, no matter what the performance of an individual player, success is first measured if the team wins. Likewise, if the company does not achieve its most important objective, make money, individual rewards are neither affordable nor appropriate.
A Goalsharing Program, in my opinion, is the best of both worlds – a win for the company and a win for the employee!