Setting HR goals is an essential practice for any business that wants to see growth and improvement. In the past, company goals were set based on data, but often leaders were left making inferences about the data they worked with. If employee productivity was low, for instance, then assumptions had to be made about why productivity was low. Solutions were formulated based on those assumptions, and the solutions might work. Or not. Time would tell.
With the introduction of HR analytics, this changed. In its whitepaper “Enabling Business Results With HR ‘Measures that Matter,’” financial advisory company Deloitte writes that “While yesterday’s data was used to understand what was happening, HR measures are now allowing organizations to better understand why it is happening and provide input into predicting what could happen.” The result is that data-driven companies are creating more effective, achievable goals and finding more success actually reaching those goals. But this result depends on properly aligning your goals and data.
The Benefits Of Goal-Setting
The results of setting company-wide goals are actually measurable and have been correlated with stronger overall performance in a number of ways. For one thing, according to a study by Erik Berggren and Jac Fitz-enz of the Workforce Intelligence Institute, businesses that set goals and share them with their employees see increases in profitability. The reason why is clear: when employees understand the desired outcome, they better understand how to do their jobs. They can prioritize their tasks more effectively and use their time more wisely. “The purpose of goal setting is to show employees what they need to focus on the most during the upcoming quarter, which then helps them to be able to prioritize their tasks,” explains the team at EdKent Media. “For managers, it helps them decide which major projects to focus on and how best to hand out the work to employees.”
Another benefit of goal-setting is higher employee engagement. Company-wide goals give employees a sense that their contribution is meaningful. They foster a sense of teamwork and belonging. Further, working day after day with little change and no end in sight can turn work into drudgery. Goals help break up time and provide variety, and when employees see themselves making substantial progress toward those goals, it gives them a sense of accomplishment.
How Setting Goals Makes Data Actionable
HR analytics starts with goal-setting. After all, your goals determine what metrics you should be tracking. By determining where you are currently, you can decide where you want to go and what factors need to change in order for you to get there.
We’ve discussed before how numbers alone don’t communicate much about a business. It’s the story behind those numbers that actually tells a business how to make the necessary changes for improvement. This is why it’s important to set up the right metrics to track and look at multiple metrics together to really evaluate which factors are impacting your company’s performance. All of that data transforms into clear steps to achieving your company’s most important goals.
If you’re ready to see how data-driven goal setting can transform your company, check out our HR analytics dashboard that will bring all your people metrics into one place. Click to schedule a demo, and if you’re still new to HR analytics, ask about Employee Cycle’s Data Coaching. We can help set goals and choose the metrics to achieve. We’ll even check in to make sure you are making progress.