ITM President and HR Bartender blogger Sharlyn Lauby recently discussed the current war for skilled talent. “It’s a candidate-driven market,” she said. “Finding the right people for the job is becoming increasingly difficult. The worst situation is when a company gets a new piece of business, but doesn’t know if it can deliver the service because it isn’t staffed appropriately.”

Many HR professionals already recognized that the current state of performance management, which often involves forced rankings, is untenable. As Lauby said: “You can sell $10 million worth of business and still be the worst salesperson in the company. Instead of talking about performance in the past, we need to shift the conversation to the future.”

Twenty-first century performance management must be about tying employees to the business strategy. According to Lauby, there are several opportunities to create alignment, and they arise well before a candidate signs on the dotted line. “Setting performance expectations before a new hire joins helps with engagement, results, and retention,” she said. “You can facilitate this by keeping your job descriptions accurate and up to date, and having an interview process that is collaborative and uses behavioral-based questions.”

Alignment should occur at onboarding as well. HR professionals and hiring managers should use the onboarding process to educate employees on how their performance will be measured, and to provide transparency about the performance management process itself.

Employee goal-setting, particularly in the form of cascading goals in which individual objectives connect directly to bottom line objectives, is a critical piece of effective modern performance management. Best practices for setting relevant goals include getting buy-in, documenting what you intend to do, phasing goals in over time, monitoring progress, modifying them as appropriate, abandoning goals that no longer make sense, and celebrating those that have been achieved. This last one should not get lost. “People who accomplish goals want to set more of them,” said Lauby.