The idea of setting performance goals for your employees is always a bit daunting, and many managers aren’t quite sure where to begin. So if you’re a bit perplexed about putting pen to paper, you’re not alone . . . Let’s make this easier on you—the executive or front-line manager—by asking questions that encourage your team members to develop their own solutions and draft SMART individual goals that tie in seamlessly to your department’s and company’s broader objectives.
You probably already know the SMART acronym in the context of writing performance goals. Well written goals should be: specific, measurable, attainable, relevant, and time-bound. Next, understand the role of goal setting in the employee performance review process. While issuing performance reviews and scores is a historical exercise that’s important to codify past achievements and areas for development (as well as award merit increases), the more important half of the annual review process lies in setting future goals (which typically tie to bonuses). After all, that’s where your and your employees’ futures lay. So don’t think of the process of goal-setting as an afterthought once the backward-looking annual performance review is given: see it as a new way for your staffers to reinvent themselves in light of the new challenges that may be coming your company’s way.
In addition, understand how your organization’s goal setting exercises drive employee behavior and performance and tie directly to the company’s short-term (i.e., one year or less) incentive plan. Because of this practical connection, goal setting remains an important pay-for-performance measure that will directly impact your staffers’ pocket books a year from now. You’ll probably want to have your employees create three to six goals that drive their future focus over the upcoming year, and those goals could relate to company, department, and individual performance, weighted in whatever way makes most sense. Strategic company goals typically include increased revenue, decreased costs, enhanced quality or efficiency, improved customer satisfaction, and the like. How these macro issues relate to your particular department or division’s focus should make for an interesting and enlightening discussion.
Goal setting and “goal sharing” exercises recognize that employees want to be involved in the business and understand how their contributions tie into the bottom line. Goals likewise set employees up for success by keeping them focused, understanding that everyone is in this together, and providing them the creative freedom to customize a solution according to their own style, talents, and approach to problem solving. Hence, the goals themselves become the focus of your efforts and energies and thereby improve morale, engagement, job satisfaction, and mental ownership.
Scott Adams on Goals vs Systems
It’s important that you share the broader picture of the organization’s challenges and allow your team members to draft their own goals for your review that address their unique ways of contributing to the bottom line. Here’s a simple, three-point questionnaire to roll out the ideas of structuring goals when you address your team in a group meeting:
- What are our organization’s top five financial and non-financial goals for the upcoming plan year? What could subordinate goals look like to reach these “big picture” objectives?
- What challenges are driving our department’s performance currently, and what kinds of deliverables should we strive for as a team in light of the organization’s broader challenges?
- What individual performance objectives can tie into these larger organizational and departmental goals? What personal interests, talents, and areas that you want to explore (e.g., vertical growth, expansion into lateral areas of responsibility, additional education and certification, and the like) will logically connect to the broader, macro initiatives in question?
Remember, your role in the goal setting process is not to give top-down orders: the key to effective goal setting lies in shifting the responsibility of the exercise back to your individual employees, where the activity rightfully belongs. After all, you can’t know exactly where they see themselves in their development, where they’d like additional guidance and direction from you, and what their future goals and measurable outcomes should look like . . . Only they can tell you that. You, however, can guide and coach them once they’ve presented their ideas, and that’s your ultimate role in the goal-setting process: counselor, coach, and career guide, not unilateral decision-maker and problem-solver over your subordinates’ futures.
With the overarching goals in mind, which you establish as a base line, spend one-on-one time with each of your direct reports giving them a chance to articulate what their contributions might look like. The key will lie in allowing them to create and customize a plan, commit to the measurable, periodic outcomes that will benchmark success, and then get out of the way. Allow your employees to make this their own goals, course-correct when necessary, and gain traction over time. No micro-management necessary: these are adults, plain and simple, and goal setting at annual performance review time is their opportunity to shine.
Finally, remember to ask your staffers to schedule follow-up meetings with you at least on a quarterly basis to review their progress toward their goals. At the end of the day, look to the goal-setting process as an opportunity to reinvent and strengthen your relationship with your staffers and instill a sense of shared accountability for making themselves part of the solution.
Trying to set goals to resolve a particular problem? Check out our webinar: Crash Course in Solving Employee Performance Problems.
Looking for particular phrases to solve performance problems? Check out Paul Falcone’s best-selling books.
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