Setting SMART Goals. Is it really that easy?

Performance Appraisal Time

It’s that time of year again when the performance management cycle in most organisations generally kicks off. The process varies from one employer to the next ranging from dusting off the annual appraisal forms to more regular reviews, with others having claimed to have ditched appraisals altogether in favour of more regular, snappy ‘performance conversations’. The latest CIPD report ‘Could do better? What works in performance management’ explores this notion further by highlighting that there is a ‘good deal of hype’ surrounding this, yet what is happening in reality is that those employers are actually abolishing the one-off annual review and replacing it with ongoing discussions and assessments of performance. This is in fact nothing new, merely the practice of effective performance management and continuous feedback.

Strategic alignment

The start of the cycle should include the alignment of corporate goals with departmental and individual ones to ensure effective cascade and alignment. The aim is to ensure that teams and employees are not off doing their own thing, so that ultimately everyone is playing their part in the success of the business. The Balanced Scorecard approach to setting and cascading organisational objectives, first developed in 1990, is a more holistic method of examining organisational performance beyond purely financial metrics and is a useful tool to consider.

How SMART can we be?

Once the corporate and departmental objectives are in place, in come our SMART objectives during performance appraisals. We’re all familiar with the acronym ‘Specific, Measurable, Actionable, Realistic and Time-bound’. This would appear to be a relatively straightforward task if we simply apply this systematic approach to goal-setting. The following Ted talk offers a short, easy-to-follow guide on how to set SMART goals:

It is clear that SMART objectives work very well where outcomes can be easily measured like in the Ted example, or within Sales or Customer Service teams. For example, a SMART sales goal may look something like ‘win 10 new customer deals within the first quarter of 2017’, or for customer service roles, ‘ensure that at least 100 customer calls are responded to daily’.  But what about roles that are less tangible, or those that are complex with frequently changing demands? I have seen managers struggle to set goals a year in advance when priorities can change frequently and goals quickly become out-of-date. Another concern I have heard managers raise is around setting goals for relatively routine roles where there is little opportunity to stretch beyond the requirements of the job. Examples include maintaining an efficient front-of-house service or in supporting services such as internal IT functions. How do we apply the SMART acronym in these cases?

Can we always be SMART?

The above referenced CIPD report provides strong evidence for adapting goals to different circumstances. The findings highlight how ‘specific and challenging goals work well for relatively straightforward tasks, but not in ‘complex’ tasks that involve navigating interrelated steps, adapting to unfamiliar cues or acquiring new skills or knowledge.’ The report goes on to recommend how ‘Goals must, therefore, be made as difficult but as realistic as the individuals can cope with in order for them to be motivating.’ It warns that where goals are not realistic and are beyond capabilities, employees can end up avoiding them altogether for fear of failure.

So what about those routine tasks that do not frequently change or roles that do not easily integrate with corporate objectives such as supporting an organisation’s internal IT infrastructure? This is where goals can be adapted depending on the type of work that is carried out. The CIPD report recommends that ‘when employees need to acquire knowledge or skills to perform a set task, or when the task involved is complex, behavioural goals and learning goals tend to have a more positive effect on performance than outcome goals.‘

In cases where goals may change frequently, or become redundant altogether then the process of setting them a year in advance clearly does not apply. Timescales for completion could, therefore, be set on a short-term basis throughout the year and reviewed regularly. Goals can then either be amended, marked as complete or abandoned with new goals set for the next short term period where necessary.

Keep an eye on your business

Admittedly none of this is easy as at the same time, departmental goals also need to remain aligned with corporate ones. The performance management system should involve ongoing strategic assessment of business plans which have a knock-on effect on what each department should be doing.

Performance rating; something different

And finally, at the end of the performance cycle comes review and usually some form of performance rating; a potentially contentious, and arguably flawed process particularly when linked to pay. Perhaps a discussion for another HR Update, but for those interested, here’s a novel approach to rating performance that plots employees on a quadrant and maps both performance and goal completion against behaviours such as interpersonal skills, communication and teamwork. Known as the ‘Employee Performance Continuum Four Square Model’ the process is designed to facilitate discussions around the overall effectiveness and value of each person.  Your top, high potentials, mid-level, developing and low performers will quickly become apparent.  The pot of money can then be divvied up accordingly. Take a look: