The differences between employee performance and organisational performance
Forward-thinking companies are already aware of the need to analyse business performance so as to maintain a competitive edge in today’s marketplace. For an organisation to deal with business challenges efficiently and effectively, it is necessary to measure individual contributions along with collective, overall performance. Though somewhat different in terminology, both have an intrinsic connection to organisational strategies, projects, risks, governance and information. However, what are the critical differences between organisational and employee performance? Read on to review the essential points that business decision-makers need to appreciate.
Individual performance management consists of overseeing the contribution that each employee makes, in comparison to the cost to the organisation of employing that person, along with the expectations that management has. Characteristically, as well as comparing levels of productivity to objective indices, managers employ subjective judgement to monitor and interpret success. For individual employees, periodic reviews form part of performance management. Commonly, six-monthly or annual appraisals also aim to develop staff further and – when required – to retrain them.
The periodic review process balances employees’ strengths and weaknesses and ensures that they have the necessary skills and competencies to deliver the required outcomes. When implemented effectively, performance management of individual staff members supports personal and professional growth, while also benefiting the organisation through greater employee satisfaction, better productivity, and true alignment with an organisation’s strategy
In contrast, monitoring the performance of an organisation involves controlling overheads, such as fixed costs and the price(s) of bought-in services, in addition to monitoring income and the overall levels of collective productivity. Here, too, SWOT analyses are a favoured management technique. The process involves reviewing corporate strengths, weaknesses, opportunities and threats to ensure that staff effort is properly aligned with business requirements.
Also, evaluating the relative performance of different teams within a business enables directors to identify divisional variations and highlight possible areas for efficiency improvements or cross-training. However, in aiming to achieve maximum results for the organisation, managers might have to adapt the methodology and metrics to suit intrinsic dissimilarities and develop customised solutions.
Linking employee performance and productivity to strategic business goals allows managers to share the responsibility for meeting business targets with their employees. By aligning employee goals with organisational aims in this way, staff feel more empowered, engaged and motivated. Thus, their individual contributions and collective efforts are more likely to achieve the organisation's objectives.
A unified performance management software platform can effortlessly combine both approaches, ensuring complete alignment between employee and business goals. This makes strategic goals easier to measure and achieve, and provides a transparent overview of how individual employee’s tasks contribute to achieving business objectives.
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