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Measuring Performance Against Company Values
Since there is no direct correlation between performance and alignment with company values, executive coaching has to consider the two variables separately for evaluation purposes. The intersection of these two independent areas of leadership defines the quality of a leader’s decisions as well as the way these decisions fit the company values.
A high-performance organizational culture requires your managers and employees to both adhere to beliefs and exhibit behavior aligned with the company values.
To improve the performance of your managers, employees, and organization through proper talent management, as a leader, you have to:
- Define a clear-cut set of organizational values that translate to observable behaviors while being tangible and measurable.
- Devise a talent management system that measures the performance of your employees against the core company values.
- Act on the conclusions of your custom performance/values assessment by rewarding, coaching, or letting staff go.
In my book “Intelligent Leadership,” I have illustrated how capability, alignment, and commitment give birth to individual and team performance. The two then combine into organizational performance.
We need organizational values to use as a measuring stick for performance. Without such values, executive performance does not make sense. We can’t measure it; thus, we can’t influence it.
“If you can’t measure it, you can’t improve it.”- Peter Drucker.
Defining and Measuring Core Company Values
Since organizational values lend performance meaning, we need to define them and make them measurable.
Despite all the information available on enhancing company performance through executive coaching, many organizations commit the mistake of defining their values in terms that make it impossible to translate them into practical application.
To avoid this mistake, you should ensure that the definition of your organization’s values meets a few essential criteria.
- Your definition should deliver clear behavioral guidelines. It should give your employees an accurate picture of how they should behave to achieve full alignment with your organizational values.
- With these guidelines, your organizational values should translate into observable behaviors that you can assess.
- To make these behaviors measurable, establish a rating system. Use at least three rating levels such as “below expectations”, “meets expectations,” and “above expectations.”
Measuring Performance Against Company Values
The relationship between organizational/individual performance and company values is not as straightforward as adepts of the values-based management model have assumed.
According to this model, by implementing organizational values through behavior, executives, managers, and employees can automatically improve their performance, thus increasing organizational performance.
According to the latest science on the matter, however, there is no significant direct correlation between performance and value-aligned behaviors.
My conclusion is that modern executive coaching should consider three variables to solve this problem, looking beyond the values-based management model. As I have made it clear in my executive coaching books, these three variables are:
Looking at performance and core values as separate leadership focus areas means that in the context of executive coaching, we need to evaluate them independently.
The Performance/Values Matrix allows us to evaluate the impact of both variables independently while comparing the two. It is possible to derive relevant information this way, concerning potential target areas for improvement within the framework of executive coaching.
Core value alignment is as important as performance.
This evaluation model tells us what kind of impact an executive’s performance has on the organization, but also how this executive aligns with the core values of the company. It matches the quality of this leader’s decisions against how these decisions fit into the fold of organizational values.
The picture thus gained about the capabilities, commitment, and alignment of an executive is highly accurate and relevant.
The best possible outcome of a Performance/Values Matrix evaluation is to find high performance coupled with a high degree of alignment. At the opposite end of the spectrum, we have low performance and low alignment.
If you want to build a culture around high performance and alignment at your organization, you must implement a performance/talent management system that rewards those who deserve it and proposes a clear path of improvement for those who do not meet expectations.