Many successful people determine their success by achieving specific goals and objectives. The same holds true in leadership, especially when measuring employee performance.
Performance goals serve multiple purposes: They give employees meaning and a feeling of ownership with regard to their job responsibilities; as well as guide employees to align with company needs. Well set goals will also educate and empower employees regarding their individual role and impact on the organization’s success.
Why do businesses need to set SMART goals?
Specific, Measurable, Achievable, Relevant and Time-bound goals create structure for employees so they clearly understand what is expected of them. Let’s break down the components of the “SMART” goals and why they are important.
S.M.A.R.T. – Breaking it down
Employee performance goals must be specific, clear and easy to define – they should answer the questions: who, what, when, why, and how. Setting a goal is pretty easy; however, making it very specific can be more challenging. For example, simply stating that you would like an employee to increase revenue by 6% is vague and lacks direction; however, stating you want revenue increased by 6%, over the total annual 2018 revenue, through increased sales by the December 31, 2019, is more specific, clear, easy to define.
The goals that are set must be measurable by quantity, quality and timing. Can you measure your goals, how will they be measured and how often will you measure them? If you can’t measure the goal, how do you know it was successfully achieved?
In the example above, the employee must increase revenue by 6% from 2018 to 2019. The percentage increase in revenue and by what method is what makes the goal measurable. The expectation on when the goal will be measured is at the end of 2019; however, measurement periods, or what I like to call, “check ins,” may be set throughout the year to determine if the goal is on track and if the employee requires additional resources to achieve the goal. It is smart to monitor the progress throughout the time perimeter to help ensure the goal is achieved within the allotted time.
Is the performance goal attainable – can the employee realistically attain the goal within the allotted timeframe? Does the employee have access to the necessary resources, such as financing, internal management support, additional talent, time, etc., needed to attain the goal? All factors in the employee’s control must be considered when measuring the attainability of the goal. External factors, such as a layoff or loss of the company’s most profitable client, should be accounted for when determining if all of the components of achieving or not achieving the goal was in the employee’s control. If the goal isn’t attainable, the goal will not be achieved, resulting in failure.
It is important to understand whether or not the performance goals make sense – are they relevant to the employee’s job responsibilities, the current state of the business and the company’s overall business goals for 2019? If the company’s goal is to cut expenses and retain existing clients; therefore, they must lay off 25% of their staff to reduce expense, increasing revenue by 6% probably may not be attainable or relevant to the current state of the business due to the reduction in staff. Understanding and aligning the business goals with the performance goals will assist and promote the success of achieving these goals.
All goals should have a specified time frame for completion and achievement. In the example, if the company were to simply state, “increase revenue by 6%,” and not provide a specified time frame, the goal is not clear and the expectations are not defined. Be sure to set a deadline for the goal, be realistic and flexible knowing that external factors out of the employee’s control can directly impact the achievement of the goal. By creating a stringent time frame, the employee is put under a tremendous amount of stress. Employees should be challenged when trying to achieve a goal; however, extreme stress can also lead to unhappy employees who are unable and unwilling to achieve their set performance goals.
What is the purpose of Performance SMART goals?
SMART goals help identify and evaluate an employee’s performance for a specific period of time, and should be used in conjunction with Employee Performance Feedback or Appraisals. If an employee doesn’t have specific performance goals and objectives to meet, how can you effectively evaluate their performance at the end of the year? SMART goals are an effective way to evaluate an employee’s performance. SMART goals can also help provide motivate employees and provide them with a sense of purpose and direction. SMART goals give employees the necessary steps needed for professional success and how to achieve specific goals.
By creating SMART goals, employees fully understand the specific purpose of their goal, how their goal will be measured, how they can attain their goal, if the goal is relevant to their position and the business and timing for completion and achievement of the goal.
Are you ready to start 2019 with Specific, Measurable, Attainable, Relevant and Time-Bound goals? It’s time to be SMART in 2019!