The SMART Goal Concept: Effectively Managing Performance
Writing SMART Goals (With Examples)
A colleague once told me “I have a goal in life…I want to climb Mt. Everest, someday.” While he was absolutely serious in his demeanor and spoke at length about why he wanted to do it, the short conversation revealed he had never done any climbing before. Further, he had hardly done research into what it actually took to climb the world’s tallest peak. And while I can in no way critique his personal ambition, his lack of research or a plan indicated to me that he was not likely to achieve his goal. What does this have to do with management? Many managers make the same mistake my colleague made when we set goals for our organization; when goals are poorly thought out and unreasonable, we set our employees (and our teams) up to fail.
Why Set Performance Goals for Employees?
Whether or not your organization has a formal performance management system, it’s always a good idea to set goals for your staff each year. Why? First, by establishing goals for employees, you are setting expectations. For example, if you set a goal for your employee to generate one customer intelligence report every month, your employee knows that at the end of the year he or she will be on the hook for twelve reports.
Further, when done correctly, the employee’s goals should align his or her work to the broader business strategy and initiatives. If your company wants to grow sales by 10%, for example, your sales team members should have goals that tie directly to that 10% of growth in some manner (for example, grow each of their territories by 10%). If you set goals that have no connection to the business objectives, your employee will struggle to see how his or her efforts support the organization’s mission.
However, performance goals are not simply about meeting metrics or driving employees to work hard. Rather, you should also include goals that go beyond an employee’s day-to-day activities and that will drive the overall enhancement to your organization. For example, the goals you give your employees might also include things like developing a new process, reducing product cost, or filling some gap that exists in your firm. All of these push the employee beyond just doing their job and ask that they contribute on a higher level.
Finally, setting performance goals helps challenge the employee and give him or her a chance to learn and develop their skills during the process. Be creative when setting individual objectives for each employee, and tie goals to their specific developmental needs, where possible. In short, performance goals should drive employee behavior, challenge your staff personally, and ultimately help the business improve.
Employee Performance Goals Should:
- Set expectations for the upcoming year.
- Tie employee’s activity to the overall business goals and vision.
- Drive behavior and activity.
- Challenge the employee as a means of developing skills.
- Drive towards an enhanced state of the business.
The S.M.A.R.T. Concept for Goal Setting
But how do I set goals that drive behavior? The answer is easier than you might think. Simply make the goals S.M.A.R.T.: Specific, Measurable, Attainable, Realistic, and Time-Based. Unlike “climbing Mt. Everest someday,” by using the S.M.A.R.T. concept you will ensure the goals you set for employees are detailed and reasonable. Let’s explore each component of S.M.A.R.T. a little further.
When setting goals for your staff, be specific in what you want them to achieve. Ensure that the targets you set are clear and easily understood. By contrast, if your goals are vague and extremely broad, not only will your employee struggle to perform against them, but you will have a hard time assessing the employee’s success when it comes to writing your performance evaluation at the end of the year. (Example: “Improve product performance” is not very specific. Instead, set a goal like “Improve Enviro-Lite bulbs life by 6 weeks.”) When goals are specific and detailed, it drives accountability and clearly establishes what the employee needs to achieve without the ambiguity.
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Please describe the tool your organization uses for annual employee performance reviews:
The most common mistake managers make when setting goals is that we often set targets that we simply cannot measure. Not just that they are vague or non-specific, but they define targets we can’t even assess as achieved or not. I can’t tell you how many times I see goals that read like this: “Support the Sales team.” How do you measure support? You can improve goals by including performance targets that can be measured in a straight forward way. Goals should be quantitative and descriptive (“Develop 5 new proposals for the Sales department.”) They can also be written to describe a degree of progress that is to be achieved. A little secret when it comes to making goals measurable: think numbers.
The goals you set for your employees must be achievable, at least within the context you set around the goal. It doesn’t mean the goals should be easy – by contrast, effective goals should stretch the employee and challenge them. But still, performance goals should not be impossible for the employee to satisfy, either based on the targets set, or by the nature of the goal itself. For example, your human resources employees should not have goals to develop new software products. It’s not what HR does. Equally, your Sales team should not have a goal to double sales in the first quarter if you’ve never had more than a 5% growth in a single quarter before. In both cases, the objectives set are not appropriate.
When setting goals for employees, make sure that the targets you establish are realistic. By realistic, it means your goal should reflect something that is practical, when compared to historical achievements. Further, to make goals realistic, they should take into account things like resources, financials, available skill set and other objectives. As in the case of my colleague who dreamed of being a mountain climber, while a noble idea, he would need years of training and tremendous financial backing to achieve his goal, making it unlikely for him to succeed.
Another one of the most common mistakes we make when setting goals for employees is not specifying a time by which they need to achieve the goal (“climbing Everest…someday”). To make your goals S.M.A.R.T., they need to have a timeframe established. The timeframe can be a specific date, a time of year, a quarter, a month, etc. The point it to make sure that there is an end to the period when the goal should be achieved. Additionally, the time-phasing of various pieces of goals can help outline steps and sequences by which the goal is to be achieved.
I Need Examples of SMART Goals
Finally, after a bunch of words and discussion, let’s talk examples!
|Non-S.M.A.R.T. Goals||S.M.A.R.T. Goals|
|Reduce inventory||Reduce raw material inventory at the West Oak plant by 10% by end of year.|
|Increase sales revenue||Increase sales revenue by 10% in East territory by year end.|
|Redesign the pipe fitting product line||Redesign 10 pipe fitting products with a budget of $20k, in order to achieve 5% cost reduction in Q1.|
|Design and deploy leadership training||Design and deploy leadership training to factory staff members within 1 year.|
|Decrease product costs||Decrease production set-up cost of the Eco-Trap product line by 20% by end of June.|
|Support the Sales team||Develop 3 customer proposals for new capture efforts by year end.|
|Increase staff||Increase factory staff by 40 people by year end, or 10 per Quarter.|
|Reduce workplace injuries||Implement Workplace Safety Guidelines by end of Q1 to reduce injuries by 25% through end of year.|
|Improve product quality||Decrease internal rejection rate by 18% within 9 months.|
|Develop new technology||Develop new technology and protect the intellectual property by filing for at least 2 new patents by the end of this year.|
|Support Production||Attend weekly Production Issues meeting and complete assigned actions before next meeting.|
|Improve Customer Satisfaction scores||Improve Customer Satisfaction scores by reducing caller wait time from 3.5 to 2.5 minutes by end of Q3.|
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