What should growing companies consider when setting performance goals for the finance function?
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The importance of setting the right performance goals for the finance function cannot be overstated. These goals encourage the entire team to deliver great performance and motivate people to stay with the company.
The performance goals of the team must be both broad and detailed enough to cover each individual's role. The master task list mentioned in the last video, together with the job descriptions, would come in handy for this exercise. Managing too many goals can be ineffective, so striking the balance between the big picture and details calls for judgment.
Not only that, the goals must be interconnected in such a way that each person's contribution can affect the performance evaluation of the entire team. Establishing this interconnectivity helps strengthen accountability and boost team morale. Let’s say if the finance leader has a performance goal of no material misstatements in the company's financials—evidenced by a clean external audit opinion—it would make sense to ask the junior staff to attain the goal of no material audit findings on the accounts or disclosures they handle.
Last but not least, learning and development is a must-have. A company that supports its employees' performance and continuous improvement goes a long way. For example goal would be to ask, you can ask your employees to achieve a minimum of five L&D hours on select topics such as financial reporting, taxation, sustainability reporting, or AI.
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VMC's views are general insights—not one-size-fits-all advice. Every company's situation is unique.
