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What is replacing SMART goals in successful organisations?

Goals video

Part 1: Per­for­mance Man­age­ment: Why is it rel­e­vant again?

Part 2: What is replac­ing SMART goals in suc­cess­ful organisations?

Part 3: What’s stop­ping you from chang­ing how you do per­for­mance management?

One of the most com­mon ways organ­i­sa­tions apply expec­ta­tion set­ting to per­for­mance devel­op­ment is by requir­ing indi­vid­u­als to have per­for­mance goals, objec­tives or pri­or­i­ties. It depends on the organ­i­sa­tion as to the ter­mi­nol­o­gy they use but they gen­er­al­ly all aim to achieve the same thing.

Three questions to kick start your performance management revolution

How do goals work? 

Agile goals pro­vide direc­tion when they guide employ­ees to focus on the most impor­tant con­tri­bu­tions they can make to the organ­i­sa­tion. When employ­ees goals con­tribute to the suc­cess of the team or the organ­i­sa­tion, they are like­ly to be even more motivational. 

Goals are most effec­tive when they are: 

  • few in num­ber (34)
  • focused on the near-term (nor­mal­ly around 3 months)
  • aligned to indi­vid­ual strengths 
  • clear in ratio­nale so the employ­ee under­stands why they are important
  • agreed using a coach­ing approach (so the employ­ee can take full ownership)
  • set and reviewed reg­u­lar­ly to ensure they are still aligned 

The dif­fer­ence between a goal and an activ­i­ty is that an activ­i­ty is a task that needs to be com­plet­ed and a goal is an ambi­tion that needs to be met. In foot­ball, kick­ing the ball would be the activ­i­ty and scor­ing would be the goal. 

Exter­nal sources of eval­u­a­tion e.g. a manager’s expec­ta­tions and feed­back, rather than self-eval­u­a­tion, moti­vate peo­ple to per­form bet­ter. This is why reg­u­lar­ly dis­cussing how indi­vid­u­als are get­ting on and the progress they’re mak­ing against their goals, tends to lead to high­er lev­els of performance. 

Per­for­mance and devel­op­ment goals

The pri­ma­ry pur­pose of goals should be to dri­ve per­for­mance in the right direc­tion, but they can sup­port indi­vid­ual devel­op­ment too. 

It is impor­tant to sep­a­rate per­for­mance and devel­op­ment goals although devel­op­ment goals can con­tribute towards the suc­cess­ful achieve­ment of per­for­mance goals. Both of these types of goals can be cap­tured in the Clear Review system.

Why keep­ing goals flex­i­ble is important?

It’s impor­tant to adapt goals as often as need­ed and adjust­ing goals dur­ing the year avoids wast­ed effort by employ­ees, pre­vent­ing goals from drift­ing into mean­ing­less­ness by year end. Where com­pa­nies man­age per­for­mance effec­tive­ly, they are more like­ly to revis­it and revise goals regularly.

The com­ple­tion of goals can­not be guar­an­teed due to their aspi­ra­tional and devel­op­men­tal nature and they can often be influ­enced by the needs of the team or the organ­i­sa­tion. There­fore, it can be accept­able to not ful­ly achieve a goal if the man­ag­er and employ­ee are agreed that enough progress has been made or that the goal is no longer relevant. 

Goals need to be spe­cif­ic and measurable

Clear and spe­cif­ic goals have a pos­i­tive effect on per­for­mance, com­pared with non-spe­cif­ic goals or do-your-best instructions. 

The struc­ture for goal set­ting is there­fore impor­tant, and the infor­ma­tion agreed when estab­lish­ing a goal. Most peo­ple are famil­iar with the SMART acronym (Spe­cif­ic, Mea­sur­able, Attain­able, Real­is­tic and Time­bound), but it can over com­pli­cate goal setting. 

A sim­ple and effec­tive struc­ture for goal set­ting is to focus on two key elements:

  1. Impact
    • What are the few things that you can focus on in the near term that will have the great­est impact on the organisation’s or team’s goals? 
    • What will make the biggest dif­fer­ence right now?
    • What aspect/​s of a longer term goal can be com­plet­ed in the near term? 

Impact focus­es on people’s think­ing and helps them to pri­ori­tise the work that will make the biggest dif­fer­ence. Whilst it’s impor­tant to agree on goals that will have a pos­i­tive impact on the team and organ­i­sa­tion, it is also impor­tant to take into account the impact on the indi­vid­ual and what their devel­op­ment needs, aspi­ra­tions, and strengths are. 

  1. Suc­cess factors
    1. Why does the goal need to be delivered?
    2. What does suc­cess look like? 
    3. How will you know that you’ve deliv­ered the goal well?
    4. What will have hap­pened when you’ve made a suc­cess of the goal?
Three questions to kick start your performance management revolution

These are often referred to as Suc­cess Mea­sures or Key Results.

It’s impor­tant for man­agers and employ­ees to work in part­ner­ship when set­ting goals, as peo­ple are more moti­vat­ed to deliv­er when they are involved in shap­ing their own goals. Even where the goals them­selves can’t be devel­oped togeth­er, work­ing on the suc­cess fac­tors togeth­er is impor­tant if employ­ees are to own their own goals. 

The Clear Review sys­tem will help you to cap­ture this infor­ma­tion effectively. 

Indi­vid­u­als must expect that work­ing toward the goal will pro­duce a pos­i­tive result, and they must be able to mea­sure their progress along the way to see if they are on track. The more spe­cif­ic and mea­sur­able the goal, the more like­ly it is that an employ­ee will achieve it. This means being clear about what a suc­cess­ful out­come would be and why.

The neu­ro­science behind goals

Mak­ing progress towards goals and achiev­ing them gen­er­ates dopamine in our brains which makes us feel good. Dopamine also helps us to be focused and to have a pos­i­tive state of mind. So, break­ing longer-term goals down into near-term, spe­cif­ic deliv­er­ables and track­ing progress, tends to be more motivational. 

We also know that what we pay atten­tion to, we’re more like­ly to achieve. Our brain’s salient net­work decides where to put our men­tal resources. There­fore, agree­ing on a small num­ber of goals focus­es the brain to help us deliv­er. It’s also use­ful to have your goals in sight and so reg­u­lar­ly refer­ring to them and review­ing what they are, keeps them front and cen­tre of the mind. 

Giv­ing praise and recog­nis­ing progress against goals is moti­vat­ing but even more so when peo­ple know why what they did was good so that they know what behav­iours to repeat. Praise and recog­ni­tion make us feel good because it releas­es dopamine and helps to put us into a pos­i­tive toward’ state which will enable us to per­form bet­ter. Unex­pect­ed rewards gen­er­ate even more dopamine and so are even better. 

Peo­ple also report stronger well­be­ing when pur­su­ing goals than when they actu­al­ly attain them. So, giv­ing feed­back and review­ing progress whilst work­ing on goals is more ben­e­fi­cial than a sin­gle review once a goal has been completed. 

Part 3: What’s stop­ping you from chang­ing how you do per­for­mance management?