Align Employee Goals with Company Mission to Drive Performance

When many medium-sized companies set annual goals for employees, the objectives are often narrowly focused on personal development and not explicitly aligned with the overall goals of the business. Crafting these goals more intentionally, however, can unlock significant value by enhancing employee engagement, improving retention, and driving growth for both employees and the firm at large.

The most successful midsize organizations create overarching, shared goals for employees and the organization that are based on common values and a clear vision of the company’s mission and purpose. The most important payoff from aligning employee goals with the company mission is improving engagement, which leads to greater employee satisfaction, lower turnover and higher productivity and growth.

Financial-only goals can backfire

Lack of engagement, on the other hand, leads to lower morale and higher turnover, which have become growing challenges for employers. This is especially true when goals are purely financial or quantitative and linked to incentives. They may yield short-term results, but they often backfire, leading to “diminished intrinsic motivation, counterproductive behaviors, and ethical concerns,” according to a study by consulting firm Kaezn.

In the latest Gallup State of the Global Workforce survey, 52% of U.S. employees surveyed say they are not engaged, while just 31% of U.S. employees say they are. Disengagement has a high cost: According to Gallup, business units with highly engaged teams are 23% more profitable than those with low engagement.

In addition to low morale and job satisfaction, employee disengagement is correlated with higher rates of turnover, a critical challenge in a tight job market where companies need to retain talent with critical skills. In the Gallup survey, half of U.S. employees said they are “watching” or actively looking for other work. Among employees aged 35 and under, this figure jumps to 60%. Gallup has found that turnover rates among employees in low-engagement teams are 21% to 51% higher than in high-engagement teams.

The high cost of recruiting new talent

Turnover inflicts substantial hard and soft costs. There are direct recruiting costs to replace lost talent, including manager and executive time to interview and assess candidates, which can add up to one-half to four times the position’s salary, according to Applauz, an engagement software vendor. Soft costs are also considerable and include lower morale among remaining workers who have to pick up the slack and loss of critical institutional knowledge.

Shared, values-based goal setting can improve employee productivity and engagement substantially by increasing the sense of belonging and purpose. This, in turn, encourages the learning, flexibility, teamwork and creativity that companies need from employees to compete effectively in a dynamic business environment. According to mentoring firm Chronus, purpose-driven employees are significantly more engaged in their roles, resulting in 125% higher employee productivity.

Understand the company’s values

How can companies create meaningful, values-based goals that will increase engagement? The starting point should be understanding and articulating what the company stands for: what its mission is in the world. What does it do, in addition to making money, that makes the world a better place? How does this mission tap into an employee’s values and sense of self-worth? How does the mission engage and excite employees? It doesn’t have to be complicated or far afield from what the company does every day.

For example, Bose Corp., an audio company with 5,200 employees, set a goal to reduce emissions from its manufacturing every year. As an electronics firm, it said that finding engineering solutions was core to its business. In 2024, it reported that it had reduced carbon emissions by 20% compared with 2020.

Another middle-market firm, Chicago-based Healthcare Information and Management Systems Society Inc., introduced a set of corporate values that aligned with its global growth strategy. It then developed a goal-setting system that connected individual employee goals with those values so that employees could see how their individual performance contributed to the organization’s success. Some 91% of employees were subsequently rewarded for values-based success.

Start with the why

According to Apps 365, a technology company for small and medium-sized businesses, you need to start by explaining why your employees’ efforts matter. “When your team knows the why, they care more about the what. They feel part of something bigger than a job. This emotional connection turns ordinary work into meaningful.”

At the same time, it is important to use a top-down and bottom-up process to define the values and mission that inform values-based goal setting. Top management has a key responsibility to set the overall direction. When Satya Nadella became CEO of Microsoft, for example, he provided a unifying vision — “empowering every person and every organization on the planet to achieve more.” This vision reshaped the company’s direction and reenergized the workforce, influencing external business strategies and internal collaboration. Instead of simply cascading goals based on overarching values, companies should get employee input on how that can translate into their daily routines, work on teams and personal development.

With shared values proven to be beneficial for increased productivity, values-based performance reviews are also a useful way to gauge an employee’s performance relative to a company’s chosen values. Employee performance reviews help to reinforce the company’s values and create a more lasting company culture.

Studies show employees would rather work for a mission-driven organization that values open communication than a company that offers free meals and great health insurance. Employees who get enough information to do their job well are 2.8 times more likely to be engaged, and business units that have engaged workers report 23% higher profits.

Ensure employees share a common vision

Medium-sized firms are especially well-placed to use values-based goal setting to engage and motivate employees. The process of creating such goals is a way to ensure that employees and management share a common vision of a meaningful mission and understand how their contributions matter. In practice, the use of shared goals engages and energizes the organization, helping employees and companies to thrive.

Supporting this kind of strategic alignment requires the right financial and advisory partner. With extensive industry knowledge and an unwavering commitment to client success, Fifth Third empowers middle-market leaders to confidently turn strategy into action. To learn more, find a relationship manager.