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.
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 (3−4)
- 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:
- 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.
- Success factors
- Why does the goal need to be delivered?
- What does success look like?
- How will you know that you’ve delivered the goal well?
- What will have happened when you’ve made a success of the goal?
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.