CHAPTER 1

The Characteristics of Effective Goals

Setting clear goals is the starting point of managing performance. Goals define the results that your people should aim to achieve in a given period of time. When you work with your employees to establish targets, you help ensure that their time and energy will be spent on the things that matter most to them—and to your organization. Doing so enhances motivation, provides accountability, and boosts performance.

Agreeing on specific targets is only part of the goal-setting process, however. You must also define how your employee’s progress toward these objectives will be evaluated and how to measure results and gauge behavioral expectations. Defining this information at the outset will make assessing performance easier for you later, and your employees will have a clear understanding of how to proceed throughout the year.

You will work with your people directly to craft a set of goals that are suitable for them. Before jumping into a goal-setting discussion, though, you need to know what characteristics goals should have and where to draw potential targets from. Finally, you must understand how challenging to make these objectives.

Attributes of Well-Defined Goals

Most managers are familiar with the SMART acronym, a set of five criteria that goals should meet: They should be specific, measurable, attainable, realistic, and time-bound. These five traits can be used to assess whether a goal statement has been constructed properly—like a spell-checker that can flag any misspelled words. But simply passing a SMART test isn’t enough to make an objective valuable to your company or employees. A goal can be SMART without being important, challenging, or congruent with unit or organizational strategy.

Instead, consider different criteria. Effective goals must be:

• Aligned with organizational strategy and beneficial to the company. They focus your people’s time, energy, and resources on the work that matters most.
• Specific and measurable. Spelling out the details of what your employee plans to achieve ensures that both of you will know when they have reached their goal.
• Framed in time, with clear deadlines. Including a target date for reaching a goal increases the likelihood that your employee will meet it.
• Achievable but challenging. Stretch goals that require individuals to reach can be energizing.
• Future focused. They should be geared toward improving current performance and spurring future growth.
• Tailored to the individual. When people are involved in setting objectives, they feel a valuable sense of ownership—and they’ll naturally be more committed to things they own.
• Documented but not forgotten. Most organizations require that each employee’s targets be written down, but too often, once they’re filed away, they can fall off the radar till the next goal-setting meeting. Keeping these objectives front of mind and regularly assessing progress will prevent them from getting buried in day-to-day work.

These characteristics will help ensure that your direct reports focus their time and resources on the results that will most benefit the organization while still providing room for individual growth. Some of the attributes in this list align with SMART criteria, but you’ll also see additional traits that point to a larger purpose. As you think about your employees’ goals, strive to meet all of these criteria.

Sources of Goals

Each of your direct reports should have a set of goals that is based on their role, skill level, and development aims. Do this by drawing from a variety of sources directly related to your employee’s needs, such as:

• Organization, division, or department plans and strategies. How could the employee contribute to bigger priorities? Consider your company’s broader objectives, team aims, or your own targets as a manager in the process of developing an individual’s goals.
• Goals from previous review periods or those that are linked to critical job responsibilities. Some objectives will be evergreen, and others will evolve: A salesperson will always have the goal of increasing sales, but specific numerical targets will change from year to year.
• Comments from previous performance reviews and feedback discussions. Perhaps there are performance gaps to close, strong skills to develop further, or greater responsibilities to take on once skills have been mastered. Performance management is a continuous process, so it can be helpful to link one period’s goals with those of the next, especially when they are tied to an employee’s ongoing growth or improvement.

You can also consider the “cheaper, faster, better” rubric, described by performance management expert Dick Grote in his book How to Be Good at Performance Appraisals. Start by thinking about the areas of an individual’s job where they spend most of their time or that make the biggest impact. How can expenses be reduced (cheaper) or less time spent (faster) while still improving quality (better)? How can an employee’s time and energy best be redirected to contribute to departmental or organizational success? These questions may be more apt for those with entry-level or support roles than for those in leadership positions; seeking ways to perform cheaper, faster, and better may already be a routine part of these higher-level jobs and unnecessary to identify as an additional goal.

You may be tempted to draw goals from a person’s job description. After all, a well-written job description can be a clear way to define a position and its essential functions. But job descriptions tend to be more about the content of the role than about the aims that managers and their employees agree to pursue.

For example, consider this job description for an executive assistant:

The executive assistant to the director will plan, schedule, and coordinate meetings; record and circulate meeting minutes; manage and track communications by providing timely responses and distributing messages; assist in drafting, editing, copying, and distributing project reports and other materials; handle travel arrangements; assist with expense documentation and reimbursements; manage complicated schedules and day-to-day office systems; and perform other job-related duties as required.

There are many activities listed here, but not a single identifiable goal. The description doesn’t provide any clarity on the objectives of the director or the organization—or about the professional ambitions of the employee. Using this write-up alone to establish effective targets for this role would be ill-advised.

As you think about potential goals for your employee (and they do the same), dig deeper than a simple job description. Think about the difference between “handle customer complaints” and “reduce customer attrition by 10%.” Or “participate in a quality-control training program” versus “Cut production waste by 20%.” The first is an activity, while the second is an end result to work toward. Aim toward descriptive, measurable targets in your goal setting.

The Tricky Balance of Challenge

Possibly the toughest factor in goal setting is how to make desired outcomes achievable but challenging. Stretch goals are objectives that require extra effort to reach. They’re an important element of a high-performing culture and of employee development. People respond positively to challenge, and when motivated to reach a tough target, employees can push themselves to achieve more than they previously thought they could. Ambitious goals can create energy and momentum, spurring the greatest effort and highest performance. Conversely, aiming too low can lead to mediocrity. When people choose goals that are too easily attained, they don’t see a need to push themselves, and they may disengage from their work.

Because they require significant effort, there’s no guarantee these objectives will be achieved. And when they’re too unrealistic, stretch goals can backfire. Employees may discount outcomes that are unreasonably ambitious. Faced with an impossible task or an overly aggressive objective, your direct report may end up frustrated, unmotivated, or demoralized. Worse, when faced with unrealistic targets, employees may act immorally. Michael E. Raynor and Derek Pankratz of Deloitte Consulting and Deloitte Services, respectively, have written that when trying to reach unrealistic goals, “people may feel increasingly tempted to cut corners or to resort to unethical or illegal behaviors that they would otherwise be loath even to contemplate.”¹ That’s not to say that all people faced with tough targets will cheat or misrepresent their performance. But driving to meet unachievable goals can pressure your employees in dangerous ways. You want your people to stretch, not to break.

Keep in mind, though, that what’s an impossible ordeal for one person may be an exciting test for another. Ask an aspiring executive to lead a new team, and they may light up with excitement; ask a stellar solo contributor who had no interest in management to do the same, and you’ll likely be disappointed with the results.

When developing a plan for your direct reports, collaborate with your employees to craft goals that are challenging, strategic, and in line with individual skill sets and aspirations. The next two chapters will give you the skills you need to do this.

NOTE

1. Michael E. Raynor and Derek Pankratz, “A Way to Know If Your Corporate Goals Are Too Aggressive,” HBR.org, July 13, 2015 (product #H0278K).