Before you can begin goal setting, it’s essential to create a blueprint for how the process will unfold
Recommends five points in the company plan:
- Mission statement
- Vision statement
- Fiscal year priorities
- Strategies
- Monthly monitoring and managing meetings.
Beginning with a mission statement, each step flows into the next — and goal setting begins after the mission and vision statements are finished. The process needs to be simple. “The more complex it is, the less people are enjoying it,” To be effective, goals should follow the “SMART” format. That means they should meet these criteria:
Specific
Measurable
Achievable
Results oriented
Time sensitive
As goals are set within the organization, finding the right amount of “stretch” — for growth — is crucial.
“Too easy” goals do not boost performance, so they are of little value, but studies show it is best to challenge employees, expect them to challenge themselves, with goals that are attainable, but with considerable effort.
Overdoing Financial Goals? — Often, CEOs fall prey to the allure of setting only financial goals. that compromises the other reasons they are in business — such as employing people and contributing to their communities.
Corporate Goal Categories — Goals in four areas — financial, customer service, employee-based (centering on learning and innovation) and internal business process, other categories, including image and reputation, community relations/philanthropy, sales and marketing.
Whichever categories you choose — or if you customize them for your own organization — the final product should reflect your corporate purpose and path.
Setting Employee Goals — In his work for the textbook “Organizational Behavior,” whether it’s better for employees to set goals in a particular environment, or for them to set goals by themselves, or whether they do best with assigned goals. No one method seems to be better than the other, in terms of outcome and performance.
The more closely a manager can match the employees’ wishes with the goal-setting style, the better the chances for an outcome everyone seeks.
Linking Monetary Incentives to Goals — Bonuses and other pay-for-performance incentives are gaining in popularity, but they work only under certain conditions.
Studies show that pay should not be linked to achieving goals unless:
- The performance goals are actually under the employees’ sphere of influence
- The goals can be quantified, then measured and
- Frequent, relatively large payments are made for achieving goals
If these three conditions aren’t met, undesirable outcomes are possible, Other studies have shown that quality suffers when quantitative goals are given highest priority.
Leadership in Goal Setting — Goals are only worth the paper they’re written on if leaders don’t bring them to life for the organization.
