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Creating a formal flow of goals from top executives down to the lowest level employees ensures an alignment of work efforts and objectives from the top to the bottom of the organization. It can be a time-consuming process, requiring a formal timetable, training and support, and some level of review to ensure that it is conducted effectively.
The process starts with the CEO setting goals for the coming year and receiving approval from the Board of Directors. Once goals are set, the direct reports to the CEO meet to discuss and set their own goals, with each one taking the CEO’s goals and identifying how their function can impact as many of the goals as practical. Those goals are set by top executives, and once approved by the CEO, are sent down to the next lower levels by function (e.g., manufacturing, finance, sales, etc.).