Posted: March 6th, 2023

Discuss how performance goals and indicators are linked to an organization’s strategy.

Organisations use performance goals and indicators in order to measure their progress towards achieving strategic objectives. Performance goals are the desired outcomes that an organisation wants to achieve, whereas performance indicators are the key metrics or data points used to track progress towards those goals. These two concepts are closely linked, and understanding how they relate is essential for effective management of an organisation’s strategy.

Performance goals set a clear direction for the organisation as they provide employees with a tangible target to aim for. They enable organisations to quantify success by setting specific targets and timelines, which provides clarity on what needs to be achieved in order for the organisation’s strategy to be successful (Lescault & Wright, 2014). For example, if an organisation has a goal of increasing sales revenue by 20% within one year then this will drive decision-making and operational activities within the company in order to reach that objective. Performance indicators help organisations see whether or not they have achieved their performance goals and can also act as early warning signals when progress is not being made as planned (Kirschner et al., 2019). For example, if sales figures show that revenue growth is below 10% after 6 months then it may indicate that changes need to be made in order for them to meet their goal of 20%.

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Discuss how performance goals and indicators are linked to an organization’s strategy.

Performance goals are linked directly to an organisations strategic objectives because they help ensure that efforts remain focused on achieving the desired end result (Gillespie & Miers 2011). By having clearly defined performance goals it becomes easier for employees at all levels of the organisation become engaged with strategy implementation activities as they have direct visibility over what needs accomplishing (Wooldridge 2017). It also allows managers at different levels of the business hierarchy create appropriate action plans which support delivery against both short-term objectives but more importantly long-term ones (Chen 2015). This helps ensure resources aren’t wasted on activities which do not contribute positively towards overall organisational success.

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It is important however when setting up performance measures that appropriate care is taken so as not too overwhelm staff with overly complex processes or unrealistic targets which cannot practically be achieved without additional investment from other parts of the business such as training or new technology (Mueller & Turner 2010). An emphasis should instead always be placed upon creating procedures which are tailored specifically for each individual departmental need yet still fit neatly into larger organisational objectives. Additionally due consideration should also given alongside goal setting about possible unintended consequences arising from any potential changes implemented such customer service issues stemming from increased efficiency but reduced staff numbers etc.  (Burgess et al., 2013) .

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In conclusion therefore while good use of performance goals and measures can greatly improve dialogue between senior leadership teams regarding operational successes failure rates etc., correct analysis requires careful thought concerning how these align directly with longer term corporate strategies whilst taking into account potential impacts across multiple areas before implementation decisions can be made confidently..

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