Setting goals in order to achieve a desired end result has been around since Noah built the ark. However, there hasn’t been a wide spread increase in the number of people who do it well since things dried out. Nearly all companies utilize some form of goal setting. And yet many employees still do not understand how their contributions tie into the overall success of their organization. With no communication or acknowledgement of their individual performances except for long-after-the-fact appraisals, it is no wonder that goal setting is an exercise to be afraid of and nervous about and not what is should be – a road map to success.
What Say Employees
Surveys have shown that only 1 in 7 employees understand their company’s strategy and direction. And 1 in 7 employees feels engaged by their job. I don’t know if it is the same employee who understands the company’s strategy or not. In addition, just over half of employees say their manager clearly communicates goals and objectives. Is it any wonder that less than half of employees are satisfied with their company’s system for managing their performance?
Failure to Communicate
The enormous failure here is recognition of the crucial role that goal setting plays in employee performance management. The first step in effective employee performance management is to Communicate Expectations – tell employees what you want them to do and how you want them to do it.
Unless Tom can see how his goal achievement has affected his team’s performance and contributed to the company’s progress, he will consider them as two separate happenings. Sure, we understand that our pursuit of success with respect to one of our goals has affected our performance increase or incentive and promotion opportunity, but do we link it to the results published in the annual report? How do we ensure individual and team goals are aligned and that all employees understand why goals are being set?
There are several ways of linking individual and organizational goals. In fact, it can be argued that the entire art and science of management runs on ensuring that employees have a personal stake in the organization. We have come a long way from the management principles suggested by Henri Fayol where unity of direction and subordination of individual interest were considered to be a reality. Today talent management thrives on understanding what highly talented employees want and ensuring that they get it.
One goal setting methodology that is used in many dynamic businesses such as Google and LinkedIn is Objectives and Key Results (OKRs). OKRs are used to track progress as teams move towards achieving objectives that are ambitious and in alignment with the entire organization. OKRs are built on the philosophy that goals need to be clear, inspiring, public, consistently measured, and permitted to fail.
Whether you use OKRs or your company’s performance management system the principles are comparable.
- Bottom-up collaborative goal setting process which empowers employees and assures their acceptance and commitment to achieving the goals
- Supervision that educates employees and shows the linkage between employee, team and company goals and objectives.
- Coaching that is robust, frequent, encouraging, and avowed. You can find more details about this in our article on Coach for Success
- Continual tracking and reporting of progress toward clearly expressed milestones.
- Ability to course correct as variables change and further lessons are learned.
No Measurement = No Goal
No goal is effective without concomitant measurements. These measurements stand as proof that the goal has been achieved. If the goal to be increase existing customers’ engagement the measurements can be:
- Reduction of customer turnover rate by 5%
- Obtain an average NPS of 95 or better.
- 100% completion of customer engagement profile forms.
Assessment of goal achievement requires increased frequency of feedback and evaluation. While the estimated time to achieve a goal may be 12 months, milestones can be achieved weekly, monthly or quarterly to ensure on-target total goal achievement. The employee performance management system should allow for annual, semi-annual, quarterly, or monthly goals and assessments. Strategic, tactical and operational goals with related milestones and tasks should fit comfortably within the performance management system.
The benefits of flexibility in creating goals and measurement cycles can contribute to making an organization that is more responsive to environmental changes and more agile in its managerial policies.
Stretching Improves Health
Some goals or some milestones should be ambitious at the outset. Encouraging employees to stretch their capabilities and knowledge into the unknown has benefits not only for the company but also the employee. We do not necessarily know how far we can get until we are well-tested. This is not setting people up to fail. If we know that achieving a new method that is faster than the current method and our goal is to do so in 6 months, then implementing the faster method in 8 months is still a win and should be rated as such. Such S-Goal achieved with desired quality and within a reasonable interval beyond the stretch date should receive a 100% rating.
- Specific – What needs to be accomplished?
- Measurable – How will w prove that it has been accomplished?
- Achievable – Is it possible to accomplish?
- Relevant – Does the goal fit the employee’s skills and responsibility within the team/department?
- Timely – What is a reasonable time within which to achieve the goal?
Get even SMARTER
- Education – What goal can lead to increased knowledge for the employee? (Locate a program which will provide the employee with additional training related to progressing in current job field, obtain approval of cost and time off, and receive a passing score.
- Reward – What goal, when achieved, can be a reward for the employee? (Is there a course or activity that will provide them employee with additional knowledge beyond the current job field for the benefit of the employee’s broader development?)
Having a performance management system that provides professional development goals increases employee engagement noticeably. These goals should allow an employee to develop skills specifically related to their position in order to help them progress professionally. In addition to having their own professional development goals, managers should have goals that support their team’s development. You can find more details about this in our article on Communicate Expectations
The Bottom Line
It is clear that goal setting is beneficial in motivating employees and accomplishing organizational objectives. From an HR perspective, effective goal setting offers an added benefit of improving the performance management process. Once employees understand how their goal achievement can affect their professional advancement, they will be more engaged and committed, thus maximizing the effectiveness of the performance management process. They will also make strides in their own development which creates a win-win proposition for all.
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