Setting performance goals or objectives is often an integral and important aspect of a performance appraisal system. But ensuring that these goals are appropriate and effective is crucial for effective performance management. There are several processes and components that should be followed to help make these performance goals as meaningful and useful as possible.
First of all, the development of performance goals begins with communication between the manager and the employee. The employee should be prepared to discuss their thoughts regarding what they would like to accomplish. The manager should be prepared to discuss areas that are important to work on to meet department, division, and company goals and initiatives. The manager and employee can then meet to discuss what goals are most appropriate for the employee. These goals can then be documented so that both parties are clear on the expectations of performance.
When setting goals, there are several features that make a goal effective. A standard approach to this is using the SMART model. According to this approach, goals should have the following elements:
Specific: the goal should clearly state what is to be accomplished
Measurable: accomplishments should be able to be measured or evaluated according to a standard
Attainable: goals should be challenging yet attainable and realistic
Relevant: goals should have a direct and obvious link to organizational goals
Timely: goals should have timelines that provide due dates and milestones
One area that often needs to be focused on to ensure an effective goal is to define how success will be measured. There are various metrics that can be used to determine success. Again, this is where communication is important. Working with the employee, the manager can determine which of the following ways success will be defined:
- Timeliness – is the employee performing their work within important time constraints? (e.g., turning around requests for information within 24 hours)
- Quality – is the employee producing work of good quality? (e.g., work product requires little or no revisions)
- Quantity – how much work should be expected? (e.g., conducted two on-site meetings per month or responded to 50 requests for information per week)
- Financial – does the employee make efficient use of funds, revenue, profit or savings?
Challenges to creating effective goals:
- Ensuring consistency among managers – managers need to be sure that they are setting goals that are appropriate for the individual employees but also need to take care that there are not widely different expectations for individuals in similar roles.
- Ensuring goals are within employee control – care needs to be taken to ensure that accomplishments are achievable and that employee effort is central to these accomplishments. If an employee is dependent on external forces for their success, this will lead to frustration and an inability to achieve objectives.
- Testing out relevant impact of different team members – in some situations, individual goals are not meaningful. Team goals would be more appropriate.
- Setting goals in environments where the work is unpredictable and changes often – both managers and employees need to be flexible and willing to make changes to goals and expectations as the work or environment evolves.
Setting effective goals is itself a demanding exercise. But with care and collaborative effort, a manager and employee can identify meaningful and challenging goals that not only further the interests of the company but also help the employee. This process can open up dialog between the employee and manager and clearly define both the expectations and the difficulties they may face in striving towards these goals.
A key part of employee goal setting is checking back in to monitor progress, coach improvement and see if the change you’re making with your employees is having the desired impact. Make sure your communication is not limited to annual performance reviews. There’s no such thing as too much communication. To be effective you need to keep your finger on the pulse of every part of the employee experience.
Coming Up Next in this Series: 7 Ways Managers Can Improve Their Communication Skills
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