Putting SMART into Company Goals
Goal setting is the foundation for business success. Developing Specific, Measurable, Achievable, Results-Oriented and Time-Sensitive (SMART) milestones helps the company achieve its mission and vision for the future. Effective business leaders also understand that the difference between success and mediocrity is how well employees understand how their work, what they do and how they do it, directly impacts their company’s success. When employees don’t see how their actions tie in to the end result, they don’t recognize that their performance is important and valued. Aligning employees with the company’s goals and strategies to reach those goals is a powerful tool in building operational success.
Goal setting begins at the executive or board level, putting focus on what needs to be accomplished over a defined timeframe. Goals at this level are broader in scope, setting the direction for the company with timeframes for achievement, and clearly defined outcomes. These goals paint the pictures for what the business will look like, 1 year, 2 years or even 5 years from now.
Goal setting enables more effective execution of strategy by allowing management to align resources to the appropriate projects. Managers can focus their employees in key directions, reducing the opportunities duplication and misdirection. From the strategy level, goals cascade through the business units, departments and teams to provide vision and focus on daily activities with the eye always on the overall business strategies.
Goal management can also help with a true pay-for-performance compensation system. By communicating the company goals to the employees and subsequently linking their goals and performance expectations to the overall goals, employees become a strategic link in the business outcomes. This establishes a measurable, understandable link between performance and pay. As you look down into the organization, the employees’ work is less linked to strategy and more about improved performance in their individual tasks. This requires a performance plan that is more focused on individual tasks and less on strategy. Mid- level managers will have a mix of goals, some based on strategy while the rest are based on the performance of their teams and themselves as individuals. The higher up the ladder, the more the focus of goals will be on strategy, especially at the executive level.
But managers often cite developing objectives and performing evaluations as their most disliked tasks. The process is cumbersome, time consuming. Systems require ongoing attention to ensure they keep aligned with changes in indicators and strategies. Scoring and weighting measures can also be cumbersome to use and may require sophisticated mathematical calculations. So, how do you keep managers on track with goal setting requirements in a successful pay-for-performance system?
Technology! Today’s HR technology systems provide user-friendly solutions to time intensive problems. Electronic appraisal systems allow businesses to incorporate company goals at multiple levels, tracking milestones, adding, deleting or modifying goals during review periods. Calculations and weighting measures are handled by a key stroke. Ease of access permits managers, directors and even executives to have “line of sight” access to performance of individuals, teams, departments or business units in achievement of goals. Automated reminders keep everyone on track and graphical indicators can provide tools for reporting status in strategy meetings.
By implementing a technology based, goal management, performance appraisal system, businesses employ a powerful tool driving success. Through a company-wide goal management system, businesses can provide validity to the links in their reward system and employee performance. Employees will be incorporated to the overall success of their employer and the entire business will have a consistent vision of the future.