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Adjusting Performance Goals
Submitted by Leslie Allan on March 13th, 2012
How frequently does your organization change its strategic goals? How often does your department modify its operational goals? Twice per year? Three times per year? More often than that?
When the goal posts change so often, how then do you evaluate the extent to which each of your employees reached their annual goals? By the time the annual appraisal comes around, each of your employees is already beating to the sound of a different drum. And the situation has not got any more stable since the GFC. It has only got more volatile and is destined to remain that way for some considerable time into the future.
On top of that, appraisal time can become very highly-charged emotionally if your organization is also tying financial rewards to employees achieving their goals. Workers can rightly feel cheated when they miss out on a bonus simply because the goals were adjusted part way through the year.
What can an organization do to mitigate these problems with shifting goals? Firstly, if your business strategies and goals change often, then this is another good reason for not linking financial rewards to performance appraisals. I have written in other posts on the folly of tying financial incentives to performance appraisals, so won’t say more about it here.
My second word of advice is that you may be stressing unnecessarily. Most people’s jobs don’t rely directly on the company’s overall goals. For example, a Purchasing Officer’s goal might be to reduce the number of errors in their purchase orders by 50% over the next year. A Training Administrator’s goal might be to submit at least 11 out of 12 monthly reports on time. These goals are relatively unaffected by the top level business strategies, although they do contribute to the overall health of the company.
The situation is different for employees with tasks that have a higher proportion of strategic importance, such as department managers, project managers, executives, and so on. For these employees, their individual goals will need to be reviewed and modified whenever the company’s targets change. This does mean having a much more flexible system than the usual once-per-year appraisal. While you are at it, you will also need to redesign the system of annual bonus payouts or get rid of them altogether.
You have before you two basic options. You can calculate the percentage of goal attainment at the point where the goal is adjusted and use that value as the performance rating. Alternatively, you can recalibrate the performance rating period and target value to match the new objective. Either way, be sure to agree the method with each employee beforehand. There is no quicker way to lose credibility in your performance management system and trust in managers than unilaterally changing the rules mid-stream.
What do you do with people who spend a lot of their time working on projects? For these employees, a performance review should be done at the end of each project. Such a review can encompass both team performance and individual performance at the same time.
Whatever your company’s appraisal cycle and however often goals are adjusted, there is no substitute for managers sitting down with each of their direct reports and their team on a regular basis. And by “regular” I mean once per week or once per month at the absolute maximum.
I’ve worked in systems where the manager alternates on a weekly basis. One week they sit with the whole team and the next week they hold individual meetings. The key idea here is that it’s the continuing conversation, the genuine two-way dialogue and multi-way conversation, that motivates each individual and the whole team.
What challenges have you met with moving goal posts in your organization? What did you do about it? Please share.
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