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Employee Goal Setting and Organizational Practices

Submitted by  on December 3rd, 2010

In my previous post on the latest Sibson Consulting survey, I recounted the disappointment that senior human resources professionals felt in their performance management systems. In this post, I want to pick up on one important theme that goes to the heart of any employee appraisal process. That theme is goal setting and measurement.

In the Sibson Consulting survey, 36% of respondents named poor goal setting by managers as the greatest impediment to an effective performance management system in their organization. When asked the types of goals that are set in their organization, this is how the senior HR people answered:

  • goals based on primary job accountabilities (76%)
  • goals based on performance against quantitative metrics (53%)
  • goals based on demonstration of competencies (41%)
  • goals based on acquisition of new skills (22%)

Respondents to the survey could select more than one type of goal in their answer, so the total exceeds 100%.

With only half of organizations that set goals for employees using quantitative measures, I am not at all surprised that 63% of respondents to the survey said that their appraising managers lacked the courage to have difficult performance conversations with their reports. Don’t get me wrong. Targeting competency and skill development is crucial in this fast changing business environment. However, if the only type of measuring stick used by managers is a somewhat subjective Likert scale, then we can only expect managers to shy away from arguments over “opinion”.

Another important indicator of the usefulness of an appraisal process is how well the goals set align with the strategic and operational objectives of the organization. At senior management level, the news is good. At this level, 77% of respondents reported strong goal alignment. Degree of alignment, however, is less obvious at the next level down. At middle-manager level, only 45% of respondents agree that goals are strongly aligned.

When we get to the level of frontline employees, the level at which the organization’s work is done, only 17% of respondents judge that workers’ goals are strongly aligned to the organization’s goals. A staggering 40% of respondents consider goal alignment to be very weak or non-existent at the coalface. With these stark findings, I am not at all surprised then that 47% of respondents felt that performance management is viewed in their organization as an HR process instead of as a business-critical process.

As I work with managers, supervisors and team leaders, I see first hand how they struggle in writing goals that are relevant, measurable and comprehensive. They need to be relevant to what the organization is trying to achieve and they need be measurable. Everyone in the organization needs to be able to use a common yardstick with which to evaluate progress dispassionately.

I also add here that the goals need to be comprehensive. I say this because it is so easy to write goals that drive counterproductive behaviors. For example, a common misapplication is setting a target for speed, such as setting a maximum time to close a Tier 1 support call. There have been many instances in which customer support representatives, when challenged with this type of goal, either cut the call short, upsetting customers, or all too readily escalate the call to Tier 2 support.

What puts all of these shortcomings into stark relief is that only half of all organizations are attempting to meet these challenges. That’s right. Senior HR professionals reported that only half of their organizations engage in goal setting as part of their employee appraisal process. The other half does not include the setting and monitoring of goals and objectives at all.

What types of goals are you using in your organization? Are you setting employee goals at all? How do your employees react to goal setting and performance tracking? What lessons can you share with us? In future blog posts, I’ll discuss other important findings of the Sibson Consulting survey and what we can learn from them.

Read my full commentary on the Sibson Consulting survey

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Posted in Change, Communication, Performance, Processes, Research | Comments (0)

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