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Annex 4: Principle 2: Alignment between organisational strategy and individual goals and integration across HR activities

Alignment between organisational strategy and individual goals

Alignment between organisational strategy, group and individual goals is necessary to ensure that individuals can see how their individual effort and performance contribute to the attainment of organisational and governmental goals. When alignment is successfully achieved, clear goals are evident at the top of the organisation / group and are clearly communicated at all hierarchical levels.

Employee motivation is likely to be enhanced where employees can clearly see how their work contributes to broader organisational and governmental goals: it demonstrates how they are making a difference. It is critical for employees to understand the broader context, the interdependencies which exist within and across organisations, and why it is important for them to achieve particular performance standards. When employees at all hierarchical levels have a clearer understanding of performance expectations this is likely to lead to improved performance.

Performance agreements have the potential to enhance employees’ understanding of performance expectations; they can foster a clear ‘line of sight’ between the performance of individual employees, the groups they work with and the achievement of organisational goals. Ideally these agreements begin with the clear articulation of organisational goals in high-level plans, which are then cascaded through the various layers of the organisation, to ensure that performance expectations for employees at all hierarchical levels are clearly aligned with these goals.

Senior managers play a critical role in establishing connections between the different parts of the organisation. This involves communicating organisational goals to employees, and translating these goals into group and individual level plans.

Alignment can be achieved through various other means: for example, group members engaging in open and frequent communication, as well as involving employees in meetings of senior managers within and outside of their organisation. This will enhance an employee’s understanding of organisational priorities beyond their division, branch or section. It will also provide clarity as to why decisions were made and why a particular direction or focus has been adopted. Regular and effective communication between managers and employees was also found to be important for the achievement of alignment between organisational strategy and individual goals.

It was also evident, however, that the ability to obtain alignment was often difficult to achieve. Alignment between strategic plans, group business plans and individual performance was often tenuous, with the ability of individual employees to link their performance agreements to high-level goals not achieved in many cases.

Our research showed that several factors negatively affected alignment including:

  • delays with publishing high-level plans, which impeded the ability of performance agreements to foster a clear ‘line of sight’ between the performance of individual employees, groups and the achievement of organisational goals;
  • lack of consistent and clear communication of high-level goals and organisational priorities. Employees noted the lack of alignment between their individual and group roles and the broader organisational strategy led to uncertainty in role focus and unclear organisational expectations of their performance;
  • lack of explicit alignment with high-level plans, where employees worked in areas that did not directly align with group or organisational goals;
  • performance agreements not being utilised as a tool to facilitate alignment, because they did not adequately document the tasks that employees were expected to undertake to achieve the organisation’s higher-level goals; and
  • ongoing change made it difficult for employees to clearly understand how their work aligned with organisational goals and priorities. This highlights the importance of clearly communicating how change will affect employees and what will be different as a result of the change, and why.

Integration across HR activities so they enable alignment

Alignment between organisational, group and individual goals must be supported by the integration of management and human resource practices. The literature suggests that the utilisation of a ‘system’ of practices, managed in a way that is appropriate to the organisational context, will establish the foundations for a high performance organisation (Sung and Ashton, 2005). Typically, the focus in the literature is on human resource practices such as: job design; recruitment and selection; employee learning and development; performance management; rewards and recognition and high involvement work practices (see Blackman et al., 2012 for an overview). These practices are required to function together effectively to reach the goals, and enhance the productivity, of the organisation (Gephart and Van Buren, 1996; Van Buren and Werner, 1996). To ensure that these systems are in alignment, high performing organisations conduct regular reviews of their people management practices to ensure that they are working to support the achievement of the organisation’s goals and objectives.

The analysis of our case study data demonstrated that performance management systems were often stand-alone processes, and were often not linked effectively to other human resource or management policies, processes or practices.

To achieve high performance, a range of organisational and management policies, processes and practices need to be seen as a part of the performance management system. Of particular note is the delegation of authority for the following functions:

  • Decision-making: For high performance decision-making authority must be devolved to managers and employees at appropriate hierarchical levels.
  • People management: Appropriate delegation for people management matters must be provided to managers to increase their responsibility and ability to manage their employees.
  • Financial management: Appropriate delegation must be devolved to managers for financial matters.

However, this study found that many managers lacked the appropriate delegation to approve work and to make decisions regarding people and financial management matters, leading to a sense of disempowerment and reduced competencies at the middle management levels. The lack of appropriate delegations led to reduced performance, responsiveness and willingness by employees and managers to be actively engaged in work processes.

The integration of human resource practices is essential for ensuring alignment with organisational requirements and for making performance management more meaningful. The key human resource practices identified as forming part of this complete performance management system were:

  • Job design: job Job analysis and design is a necessary upfront investment as it facilitates strategic alignment, provides a basis for role clarity and connects to several other human resource practices. However, our research found little evidence that effective job analysis or design is undertaken in the APS.
  • Recruitment and selection: Effective recruitment and selection processes are essential for obtaining the right job-person (and organisational) fit, for optimising performance and productivity, and preventing underperformance. Our research, however, found that recruitment practices were often undertaken in a way that did not facilitate this. Job requirements were not always clearly specified for particular jobs or roles. Bulk recruitment did not always ensure that the correct job-person (or organisation) fit was achieved and this has the potential to create challenges for high performance.
  • Probation: Probation is a critical point to evaluate the effectiveness of job-person fit. Probation is also critical for establishing individual role and goal clarity. This ensures that employees know what they will be required to do and enables organisations to detect and address potential performance issues early. Our research, however, found that probation was under-utilised in many agencies. The role of probation as a tool for preventing underperformance and encouraging high performance was often not utilised effectively.
  • Performance agreement and appraisal: Key elements of an effective performance management system are: the utilisation of informal and formal mechanisms to establish performance expectations; provision of feedback; evaluation and assessment of performance; and identification of development needs. Our research found that the development of performance agreements and the undertaking of mid and end of year performance reviews were often viewed as compliance exercise.
  • Learning and development: For high performance to emerge, learning and development requirements that will enable improved individual, group and organisational capability need to be identified. Our research found that there was an underinvestment in employee learning and development in many organisations. While learning and development needs were being identified for employees, too often they were not being delivered.
  • Rewards and recognition: These represent an important human resource practice for encouraging and reinforcing desired performance and behaviours. Our research found that informal rewards were highly valued, with particular emphasis placed on acknowledgement and feedback from supervisors. The implementation of a range of reward and recognition mechanisms was variable, with limited acknowledgement for work undertaken and recognition regarding its importance to the organisation.
  • Workforce planning: This provides a foundation for several human resource practices. It is important for ensuring roles / jobs are aligned with organisational requirements, both currently and into the future. Our research found that many organisations did not have developed workforce planning strategies. Participants often reflected that the impetus to get a task completed or a role filled often led to reactive human resource practices rather than a strategic, planned approach.

Summary

Alignment is critical for motivating employee performance and aligning collective efforts towards the attainment of organisational goals. It was clear from the research, however, that there were low levels of alignment across the APS. A number of mechanisms that could be adopted to facilitate alignment have been identified: senior managers translating higher-level goals for groups and individuals; exposing employees to high-level meetings and strategic conversations; and frequent communication between managers and employees regarding performance expectations. The predominantly reactive nature of many current human resources practices across the APS means that a coherent performance management implementation strategy is lacking.