Developing Performance Goals & Objectives

In our performance management certification training we use three common approaches to goal and objective setting and it is worth reviewing each of these to identify the five themes that are common to each. The first approach is simply known as “S.M.A.R.T” goal setting, with the acronym standing for the characteristics of an effective goal (objective). In this approach a goal must be:  Specific – the goal to be achieved must be clearly described.  Measurable – you must be able to clearly tell if the goal has been achieved.  Achievable – the goal is both mutually agreed and realistic.  Relevant – the goal is aligned with the company strategy and objectives.  Time Bound – the goal must be achieved within a specific timeframe. The second model is where goals are described in terms of Key Performance Indicators (KPIs) that need to be achieved in order for the business to realize a successful outcome. KPIs are unique to every organization so choosing the most effective KPIs is based on a clear understanding of the organization’s priorities. KPIs may be described in operational terms (e.g. achieve x outcome by y date) or in terms of general progress towards achieving the business strategy. This approach is obviously less prescriptive than S.M.A.R.T goals as it is widely open to interpretation depending on the priorities of each business (or indeed each department). However, no matter what “indicator” is chosen, the objective related to the indicator should adhere to the S.M.A.R.T guidelines in order to be effective. Thus, the use of KPIs and S.M.A.R.T goal setting are often complementary as opposed to being mutually exclusive. The third and final approach that we will evaluate is known as “Objective and Key Results” (OKRs). This is essentially a goal-setting framework that helps define goals and track outcomes. It is designed to stretch the individual in terms of achievement and should be uncomfortable and ambitious for them. In this way it is similar to the “Big Hairy Audacious Goal” (BHAG) made famous by Jim Collins in his book “Built to Last”. OKRs are always tightly linked with business goals and objectives, similar to the “Relevant” in the S.M.A.R.T methodology. Many organizations use OKRs to cascade objectives throughout an organization. They will start with the overall business strategic objectives, through functional and departmental objectives and onto individual objectives, thereby aligning the entire organization into unified objectives. A key aspect of OKRs is that they are never tied to appraisals or compensation. As they are stretch goals, an organization should not consistently achieve 100% (or else the goals have not been stretching enough). As a result, it would unfair to tie compensation to them. In this regard, OKRs do not necessarily meet the “Achievable” aspect of the S.M.A.R.T methodology. So, what are our five key takeaways from the review of the landscape of goal-setting methodologies? Well clearly, all three have commonalities. Key Insight 1: By “Goals” we really mean “Objectives”. In terms of employee development and performance management, we really need to focus on specific objectives rather than broad, aspirational goals. Objectives can be measured and rewarded, and this is what we are trying to achieve. Key Insight 2: Employee Goals Must Align with Business Objectives. Employee Goals must be “relevant” to specific business objectives. The OKR methodology of cascading objectives in a waterfall effect through the organization may be a helpful tool to achieve this effect. Key Insight 3: Must Goals be Achievable? You need to ask yourself how important this is for your organization? Do your employees need to hit every goal 100%? Or is it better to give them stretch goals that may drive the organization further, but also bears the risk of non-achievement? Each manager and business owner will need to make their own decision on this as the answer is based on the business model, strategy and company culture. Key Insight 4: Timeframes are Critical No matter which approach is used, making sure that each objective has a deadline for its achievement is critical. It must be possible to measure the successful achievement of a goal within a set time period. If the goal is achieved outside of this time period then it can only be considered a partial success. Key Insight 5: Consider using all three as a framework. All three approaches may be used in tandem to create an effective framework for goal setting. This is probably the most important takeaway. Each different approach can reinforce the other leading to a synergistic approach where the whole is greater than the sum of the parts. Effective goal setting is one of the most important activities with which you can help your employees. By using these five key insights you can help them to achieve their true potential, while they support your organization in achieving its goals.  

Learn More About the Certficate in Performance Management What Topics Are Covered in this Certification Course? Module 1: Key terminology, acronyms and a basic introduction to the area of performance management. Module 2: Ensuring that performance metrics align with the organization’s vision, mission, strategy and objectives. Module 3: Understanding the relationship between performance management and related key activities such as recruitment, compensation and training. Module 4: Introduction and evaluation of different performance management strategies, techniques, tools and software. Module 5: Performance management cycle and purpose of the annual performance review. Module 6: Creating performance and development plans (including the provision of templates). Module 7: Appraisals: preparing for and carrying out. Module 8: The role of the team leader in achieving high performance. Module 9: Key characteristics of a high performing team and the stages of group development. Identifying core behaviors that drive high performance. Module 10: Nurturing a performance culture.