Money - Business
By: - at May 25, 2013

How To Set Business Goals And Objectives

GoalsResearch and common sense tell us that goals work. In fact, there is no area of the organizational sciences that has received as much support or attention over the years, as goal setting. For individuals, groups, and organizations, the proper use of goals improves performance. The idea is simple.

For an individual or group, goals direct finite time and energy towards desired outcomes. They are the ultimate tools to help us achieve focus, however, like any jewel; they must be used correctly to have a positive impact. So first let us talk about the goal setting process. And then we will address the essential components of any goal. For our purposes here, I will assume the perspective of you as a leader, working to establish goals from one of your employees.

Establishing Goals
setting and establishing goals measuring progress
To get started the process begins with your individual effort to establish draft goals for the employee, based on performance standards and your knowledge of the person's ability. You will set initial targets for any relevant areas of work over the upcoming quarter or year. Next you will collaborate with the employee in question. You are in charge of starting the goal setting process.

But forming a collaboration or partnership with the employee is vital because when they feel ownership in the process right along with you the motivational impact of goals increases significantly. After goals have been set, agree upon measures. Measures help you chart progress towards goal completion. Strive for a very small number of high quality fairly easy to use measures. Otherwise good measures that are wildly difficult in terms of data collection will not help the process. In addition to measures, you must be able to clearly define all expected milestones.

Define Milestones
defining milestones and monitoring progressMilestones represent the major sub parts or chunks of a goal. For example, in a sales process, you might say, $1,000,000 is the annual goal. Sales-per-week is the measure and increments of $250,000 are the milestones. Using measures and milestones allows you to adequately track performance on calendar overtime. Once under way, you must track performance. That's the feedback component. The system you use is up to you.

Every organization is different. It might be a highly automated process, or it might be simple conversations used to track performance. And then we have the most important part of the goal setting process, accountability.

Accountability refers to holding someone liable for their performance relative to their goals: Based on performance, does the person deserve a simple pat on the back, or is their performance so strong they deserve a promotion? In the opposite direction, do they need to have their responsibilities reduced? Would they benefit from coaching to improve their output? Be positive and helpful, but make sure you hold people accountable. Without accountability, goals actually can be a waste of time.

job performance work meeting

The point is the outcomes need to properly match the performance. Now you are ready to engage the goal setting process. Follow the ideas outlined here, and give your employees the clarity they need to be productive.

The Elements Of Effective Goals
Likely the most important part of the goal setting process is actually defining great goals. The most famous and I think the most useful approach to crafty goals is to use SMART Goals. This stands for Specific, Measurable, Aligned, Reachable and Time-bound. Let us briefly consider each element.

S Is For Specific
Great goals are not vague, unclear or otherwise ambiguous. They strive to be very concrete. For example, instead of telling an employee they could provide better customer service, you might set a goal to increase customer satisfaction survey results by 10% over the next two quarters. The more specific the goal, the more useful the goal.

M Is For Measurable
Next, M is for measurable. It has often been said if you can't measure it, you can't manage it, and that's true. We don't monitor goals through intuition. Measures matter. But as noted a moment ago, be sure to use a small number of measures to capture any truly needed information. The idea is to track progress, but at the same time, we must be careful to not create an unnecessarily huge measurement burden.

A Is For Aligned
This is followed by A, for Aligned. Goals are said to be aligned when they support each other and do not otherwise work at cross purposes, such that pursuing one goal impedes your ability to successfully pursue another goal. The classic example here is to demand a strong increase in work output or quantity while also asking for an increase in work quality. These two goals might not be mutually supportive.

R Is For Reachable
Next, we have R for reachable. Here we are referring to the level of performance to be obtained. Now in classic goal theory, a goal is motivational if it is viewed as challenging but reasonable and reachable. You don't want a goal to seem terribly easy to accomplish, and you do not want to set the bar too high. Because you're going to use a collaborative goal setting process. You have a good chance of finding a useful level of difficulty that pushes the employee, while still remaining reasonable.

T Is For Time-Bound
Finally T is for time-bound. This component of goal setting is well knowing but it is often, misunderstood. Because we are so busy at work and because it is tough to estimate how long things will take, we often underestimate how much time is needed for any given goal. Here's a great rule of thumb. Make your honest estimation, then add a little bit more to be safe. Trust me, adding a little room to complete a goal can make all the difference.

In Conclusion
business success with goal settingThere you have it. Goals should be smart. As useful as the smart acronym might be, I would like you to consider one more thing. The need to provide adequate resources. If your goal setting process is crystal clear and you have crafted thoughtful goals that conform to the SMART model, you have to be sure your employees are properly armed to be successful.

Think through the tools, hardware, software, personnel and other resources they will need. Make sure they have everything needed to reach their goals. Goals have long been known as very useful devices in organizational life. Especially if you remember that every goal should be SMART: specific, measurable, aligned, reachable time-bound and supported by adequate resources.





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