Goal setting has been a key factor in the overall shift in performance management in the past few years. The emphasis in performance management has moved away from the dreaded annual appraisal (the ‘teacher’s report’) to continuous performance management — an ongoing performance development approach. Within the field of performance management, one of the areas that has evolved significantly is goal setting. With the rapid evolution of organisational change, goal setting techniques need to be re-evaluated and changed.
Traditional goal setting
When Peter Drucker launched his seminal ‘Management by Objectives’ goal-setting model in 1954, it was ground-breaking to involve employees as stakeholders in the objective-setting process. It looked good on paper, and its objective cascade process from senior leadership through the hierarchy to the bottom of the pyramid worked well for the more predictable times.
Employees were expected to set 12-month objectives, despite the fact that they would likely be out of date by the end of the first quarter. Why? Because what mattered was having something documented that could be measured and assessed later. Employees and managers knew it was a pointless exercise, but it ticked a box.
But times have changed, and it’s time for goal setting to be modernised.
Goal setting needs to focus on performance improvement — not purely on performance measurement. Goals need to be near-term so that they are motivational and meaningful. In our experience, most goals should be achievable in the next 1 – 4 months to keep employees focused and motivated. Goals need to be regularly reviewed to stay relevant meaningful (for example, every quarter).
What does this mean in practical terms? What has to change?
Time to move on: replacing ‘SMART’ with the 5A’s test
How many times have you heard the words “your objectives need to be SMART?” You can probably recite the acronym: Specific, Measurable, Achievable, Realistic, Time-bound. The trouble with ‘SMART’ is it only tells part of the story in modern, complex, rapidly evolving, collaborative organisations. For that reason, we think it’s time for a new way of thinking about objectives, and we have devised a new test: the 5As test. Progressive organisations should ensure their employees and managers create jointly set objectives that are assessable, aspirational, aligned, accountable and agile:
- ASSESSABLE means an objective can be clearly measured so that it’s clear when it’s been achieved
- ASPIRATIONAL means an objective is stretching and delivery drives high performance
- ALIGNED means an objective aligns with, and drives, the wider team and organizational goals
- ACCOUNTABLE means an objective is within the employee’s control, and it is clear where there is shared ownership with collaborators
- AGILE means that the objective is near-term (for example, achievable in the next 1 – 4 months), and it is reviewed at a cadence that keeps it relevant and meaningful (for example, every quarter)
Practical tips on how to have a good goal-setting conversation
It’s not a bad idea to give your managers and employees some guidance to ensure they have a really great goal-setting conversation. You may want to share some of our top tips with them:
Agree on priority performance goals
Agree on a few high-quality goals which clarify your key priorities for the forthcoming period. Ask yourself what is critical for you to deliver this period — it’s much better to have a few critical goals than a huge wish list.
Agree on personal development goals
It’s also important to set personal development goals which will inspire and enable you to achieve personal success at work. These might relate to personal strengths or areas of interest that you can leverage for yours and the team’s benefit. Or they could be areas of personal development which you need to address to improve your personal performance.
Use the ‘5As Test’ to set high-quality goals
To ensure your goals meet the 5 As test, ask yourself these key questions:
- Is it clear what you are expected to achieve and what success would look like (whether measured in terms of quantity or quality)?
- Is it clear what measures and targets will be used to track progress against the goal?
- Is the goal stretching and challenging whilst still achievable?
- Would successful achievement drive high performance at an individual and team level?
- Are the challenges or obstacles understood and manageable?
- Does the goal align with your team’s, department’s and company’s wider objectives?
- Will success drive the organization to deliver its strategic goals?
- Is the goal relevant to you and your role?
- Is the goal directly owned by you and within your control?
- Do you share ownership for success with any collaborators?
- Do these collaborators also have this goal in their set of agreed goals?
- Does the goal have a motivational, realistic, near-term timeframe for delivery (for example, is it achievable within the next 1 – 4 months)?
- Can the entire goal be achieved within the near-term (if not, consider setting interim milestones to maintain focus and track progress)?
- When will you review (and if appropriate amend) the goal to keep it relevant and meaningful?
Once you’ve set your goals, you should schedule a date for your next check-in to discuss progress.
Learn more about goal setting
Watch our webinar to learn more about goal setting. This webinar explores “What SMART goals are being replaced with in successful organizations.”