Research shows, that specific hard goals produce better performance by 90% than medium, easy, "do your best" or no goals (Locke et al., 1981). This means that setting goals for your employees such as “increase sales this year”, “come up with innovative ideas on how to increase business growth” or “do better than last year” aren’t going to lead to desirable results.
Firstly, these are rather broad, vaguely articulated outcomes. Chances are few employees will take the time to think about how to make these goals more specific - once the work day begins.
They’re more likely to dive into making these outcomes happen, only to realise 6 months later that their methods of achieving the goals may have been unrealistic, not measurable, or unachievable after all.
Secondly, how about employees who have already been doing well? How would their new goals challenge and stretch them in the new year? Without specific guidance and expectations, stretch goals are less likely to happen on their own.
Use our template to create specific & hard goals that will produce better performance!
Three Types of Goals
There are three different types of goals:
1. Expected results - goals that can be expected to reach if the employee carries on as at present
2. Standard / minimum standard - goals that an employee is expected to reach and held accountable for not reaching
3. Stretched goals - goals that promise improvement of a certain aspect and that are challenging but realistic
The goals that drive performance are the stretched goals. After appraising the performance of your employees, make sure to inspire them to create goals that actually drive work improvements.
Checkpoint 1: Prioritisation
This may a struggle for those who confuse work activities with actual goals. They often end up setting multiple “goals” in many work areas that lead to a bunch of half achieved outcomes.
Initiate a discussion about the priorities of your organisation and work, ensuring that your employee understands their key result areas (KRA) and what they're hired to do. Have them set no more than 4 goals if possible, with goals linked to each KRA.
Checkpoint 2: Focusing Resources
After the goals have been established, ask your employees what resources are needed to achieve them. Do they need support from colleagues, yourself or external agents? If a budget is necessary, is it realistic? Is relevant information accessible to the goal owner?
Checkpoint 3: Motivating Employees
The goals set can be a motivating factor for your employees, if they’re challenging but realistic, and there is a sense of ownership.Goals can motivate one if they’re associated with rewards or penalties, both tangible and otherwise. .
In this case, it’s important that you understand how your employees are motivated - some are prone to intrinsic (internal) motivation, like overcoming a challenge, some are prone to extrinsic (external) motivation, as in working towards rewards and avoiding penalties or failures.
Goal setting is an essential, yet varied, process within organisations. The mere act of setting them has a profound, positive effect on employee performance. Leaders and managers can further accentuate the positives of goal setting by adhering to a disciplined approach. Here are the four principles you should follow:
Goal Setting Principles
1. Be Clear
Goals have to be clear and simple as your employees will keep revisiting them through the year, given the dynamic work environment. As most job scopes now involve collaborative effort more and more, it’s also important that team members can quickly understand what the goals are about.
2. Realistic but Challenging
When creating goals, it's important that they aren’t impossible to achieve, but be challenging to reach. In other words, the goals should be motivating your employee just enough. Mihalyi Csikszentmihalyi's Flow theory suggests that there’s an optimal balance between boredom and anxiety, challenge and skills. Do and your employees know where their optimal balance lies?
3. Benchmark: past performance, market performance and organisational goals
Look at your employee’s past performance and achievements and at what the competition or people in similar functions are doing in other industries. The gathered information can serve as a benchmark for setting the goals.
With this information, ask your employee to consider how they can add and create constant value. The sure way to do this is to always be improving himself/herself year on year. Also make sure that the goals are aligned with the organisation’s goals so that employees know how they're contributing to growth and success.
While the whole point of goals is that they’re effective because people try to achieve them, not meeting a goal is not necessarily a sign of failure.
Aspirational or stretch goals may not be met within a performance year, but may have still led to improvement and be motivational.
When goals are not met, there’s still an opportunity to focus on what has been achieved, to make a rich assessment of that learn from this experience, for the next performance year!
Supporting your employees' on creating their own goals can be challenging. Our guide on coaching employees on setting goals will lead you through the process, ensuring that the goals you establish with them will lead to achieving them!