Setting goals for employees is not a new strategy. Companies have been doing it for decades. But what many are finding out in the era of big data is that the mere setting of goals alone doesn't do very much. In fact, goals can actually hinder performance. It is all in how goals are set, managed, and achieved.
If your company still relies on a system of rigid goals and annual performance reviews, you might not be getting the kind of return you think you should be getting. It could be that your goal-setting strategies are even alienating workers. Rest assured there is a better way.
Goals Should Include Employee Input
Right off the top, the benefits of setting goals are muted by not including employees in the decision-making process. Employee input is often not solicited under the mistaken belief that only managers understand what goals are appropriate. Reality says otherwise.
Employees are the boots on the ground. They are the ones actually doing the work for which managers are responsible. No one knows better than them what constitutes a goal that can actually increase productivity. Moreover, soliciting employee input gives said employees some measure of ownership over what they do with the set goals.
Goals Should Be Reasonable
A prominent complaint among workers subjected to annual performance reviews is that their goals for the previous year were unattainable. Whether or not that's a matter of perception is up to employees and their managers to figure out. However, we can say that goals should be reasonable.
A good way to understand this is to think about getting out from underneath a heavy debt load. Financial experts routinely suggest setting a series of small, easily attainable goals. Every goal attained triggers another goal until the debt is paid off. Without those smaller and more reasonable goals, people may be overwhelmed and never manage to pay off their debts.
Work goals should be similar. It is better to create a series of five or six smaller, more reasonable goals as opposed to just two larger ones. Goals need to be attainable within reason.
Goals Should Reflect Business Objectives
Companies still stuck in the old ways of doing things have a tendency to fall into the trap of setting goals that really have nothing to do with business objectives. For example, let us say you run a company that teaches English to international business customers. One of the goals you set for your teachers is to meet a set of arbitrary training criteria that allows your company to advertise itself as being ISO compliant.
That goal is a viable goal if it enhances the business objective of teaching English. But if the criteria are more about process than teaching, are students learning anything from it? And if not, your company has established a worthless goal that only wastes time. This is a good way to discourage your teachers.
Goals Should Be Adaptable
Finally, if you want your goals to actually enhance productivity, they need to be adaptable. The reality is that things change on a day-to-day basis. Setting an inflexible goal for an entire year just doesn't make sense. Short-term goals are just that. As for long-term goals, they need to be flexible enough to adapt to changing conditions in real time.
Setting goals for employees is a necessary part of running a successful business. However, it has to be done right. Setting arbitrary goals that do not involve employee input, are not flexible, and don't address actual business objectives are worthless. They often do more harm than good.