EPM Principle 5 - Alignment - Part 1

Thanks to everyone for your comments on the Employee Performance Management (EPM) principles - they are still work in progress so please give me your candid feedback!

So far, I have published 3 articles on the 'pillars' of EPM which should make the process FIT (Fair, Inclusive & Transparent) for purpose. The articles explain: 

- WHY the principle was chosen

- HOW to implement the principle

- WHAT measures can be used to ensure the principle is working 

Here is a list of published articles:

PRINCIPLE 1 : FAIR

PRINCIPLE 2 : INCLUSIVE

PRINCIPLE 3 : TRANSPARENT

PRINCIPLE 4 : DIALOGUE

The first 3 articles explain why the concepts of organisational justice and social context are so important to the success of an EPM. The next set of article explain how these pillars are reinforced and operationalised.

All feedback is most welcome!

Alignment - Why this principle?

Linking vision, mission & meaning

If an ongoing generative dialogue (see Principle 4) is the lifeblood of an organisation, then alignment is the pulse. If an organisation cannot increase its heart rate to meet the demands of new external forces it may die. In this age of digitalisation and political and economic uncertainty this is a skill that all organisations need to master. Change (if it ever was) is not a discrete linear process but a continuous, emergent process of strategic renewal. As the speed, depth and breadth of change increases, organisations must be comfortable disrupting their own legacies.

The ability of organisations to build new capability and maturity to continually synchronise changes in the external business environment (WHAT needs to be done – mission and goals) with organisational culture (HOW they want to be – values and behaviours) so that employees can experience meaning and purpose (WHY am I here – competencies, objectives & development) is called dynamic capability. In the world of start-ups, it is called pivoting.

The intersection of the WHAT, HOW and WHY creates organisational and employee identity. It is also the domain of the EPM which creates the WHY by connecting the HOW with the WHAT.

The EPM is a meaning maker, culture monitor and value deliverer.

If organisations really believe in people power then an organisation’s competitive advantage lies within the EPM. If the EPM process cannot work fast enough, aligning internal capabilities with external needs, the organisational cannot adapt.

This is why the annual performance review has no place in the digital age and so many questions are being asked of traditional EPM models. Where annual product cycles and five year plans are being made defunct by the pace of change, the need for an agile and adaptable EPM has never been greater.

Being Mission-Driven

A 2016 survey from Gallup found that ‘just four in 10 employees worldwide strongly agree that the mission or purpose of their company makes them feel their job is important’. Creating this connection between day to day work and mission is critical because purpose-orientated employees have 20% longer expected tenure, 50% more likely to be in leadership positions, 47% more likely to be promoters of their employers and 64% more likely to experience higher levels of fulfilment in their work.

But being a mission or purpose-driven organisation is more than having statement of intent, it is an organisation that creates a sense of belonging that connects employee culture, strategic direction with the external environment of the business – it gives an organisation its identity. Because an organisation’s identity and culture is being redefined daily through social interaction and organisational behaviour it needs to be managed like any other business process. The mechanism to manage this process is the EPM.

The Alignment Imperative

But 12 years after Peter Drucker’s famous quote, culture is still eating strategy (and mission & vision statements!) for breakfast. This is because as a recent study showed

only 20% of directors and board members spend enough time managing and improving their culture

Although 62% thought culture should be set from the top, a similar proportion (63%) failed to consider it a formal risk. The report suggests that ‘boards are failing to understand their existing culture, let alone have collective agreement on what a desired culture should look like.’

The call to action for Boards to create a clearer line of sight between culture and purpose is becoming a national priority with the UK Government, CIPD and Think Tanks contributing to the debate on how to alleviate stagnating wages, declining productivity, low employee engagement, job automation and socio-economic uncertainty (e.g. Brexit and the ‘gig economy’). The bottom line is that companies with a clearly articulated and understood purpose experience growth of +10%. 

The reason UK employees feel the EPM process is pointless, time-consuming and inflexible is because it is not being managed as a meaning maker for employees or a culture monitor and value deliverer for the Board. 

To compound this, the literature on alignment is complex. There are many types of alignment (vertical, horizontal, structural, cultural and environmental) covering different perspectives (process, relational and strategic) leading to multiple definitions. To simplify, I would define alignment as a

continuous dialogue among all employees to answer the WHAT, HOW & WHY their day-to-day activities deliver VALUE to their organisation and MEANING to themselves. 

Summary

Alignment is so much more than a process creating a ‘Golden Thread’ of hierarchical targets from business goals to employee objectives. Alignment is putting meaningful work into practice. It links key organisational elements such as people, processes, systems, culture, leadership and strategy creating congruence between the strategic side (WHAT we do), the cultural side (HOW we do things) and employee meaning (WHY am I here) - it creates strategic narrative. By having continuous conversations at all levels and staying open to change, organisations become more agile and adaptable achieving their mission and vision whilst employees have a dynamic meaningful career.