Goal Setting: The Impact on Organization Productivity

At the end of each year, we naturally reflect upon our accomplishments for that year. Have we been successful in achieving what we set out to do? Have we exceeded our expectations as well as those of others? If we haven’t met expectations, what will be done to improve? After evaluating our performance, we focus our sights toward setting goals for the upcoming year. 

This article addresses the annual goal-setting process within the business environment, and offers tips for crafting viable individual goals and an individual development plan.

SMART Goals

Developing goals is essential to both the manager and employee for evaluating performance and establishing a plan for continuous development and improvement (Kouzes & Posner, 2002). There shouldn’t be any ambiguity around what’s expected of employees. Miscommunication of goals and expectations causes undue stress and adversely impacts productivity (Huse, 1980). 

A widely accepted business practice involves developing SMART goals. This acronym defines goals as: 

Specific

Your goal must be clearly defined and address what is to be accomplished. You must also outline how to do it and why (i.e., what’s the reason for or the benefit of achieving the goal?). 

Measurable

Short-term or periodic milestones should be identified to evaluate progress in meeting the goal. These milestones help gauge progress and determine if the goal will be completed as planned or if there’s a need to readjust and reforecast it. 

Achievable

Have you set a goal that will challenge you? Do you possess the knowledge and skills to complete it? Setting a goal that is unattainable may adversely impact your morale and motivation. To help ensure an achievable goal has been established, it’s a sound practice to have agreement between manager and employee on the set goal. 

Realistic

Your goal must be results-oriented and relevant to the organization. And, it should be achievable with the appropriate employee knowledge and available resources. 

Timely

Every goal should be defined with a timeframe for completion. The timeframe should present a challenge and precipitate a sense of urgency in providing a tangible, quality result. 

Alignment of Employee Goals and Organizational Goals

The next step in the annual goal-setting process is critical. If your goals aren’t aligned with your organization’s goals and objectives, it doesn’t matter how “smart” they are. You won’t receive support from the leaders and managers in your organization to meet those goals. Further, you may encounter significant resistance and disdain toward conducting activities that will benefit your personal growth and development at the expense of the organization. In this scenario, you haven’t established a SMART goal, but a DUMB goal (Gardner, 2009). A DUMB goal can be characterized as one that is: 

Detrimental to the organization’s objectives
Undermining the organization’s objectives (and/or is unreasonable)
Misaligned with the organization’s objectives
Broadly defined without enough specifics to be understood or accurately evaluated

Part of the leader’s role in the organization is to reward employees who consistently demonstrate the organization’s desired behaviors and attitudes, and who deliver its desired results. Developing and attempting to execute DUMB goals will provide the opposite leadership reaction. Employees who aren’t aligned with the organizational goals, objectives and mission will be alienated and will not be rewarded.

Implications of Setting DUMB Goals

If your individual goals and development plan do not align with the organization’s goals and objectives, you won’t have the support of your management team in achieving your goals. If your personal goals require financial assistance, or time away from the job for classroom training, you may not receive that assistance. Moreover, the degree of resistance could result in termination. For example, your organization’s goal for 2010 may be to improve profitability by decreasing operating costs. The desired method for cutting costs may be reducing staff and eliminating unnecessary tasks. If your personal goals and individual development plan don’t support this organizational goal, you could find yourself as part of that planned workforce reduction. 

Tips for Crafting SMART Individual Goals

In order to receive support for individual goals and development, you must first understand the organizational goal, ensure your individual goals will contribute to its success and clearly articulate the expected results and benefits to the organization. In addition, make sure to include periodic milestones to gauge your progress. These milestones can serve as an ideal mechanism for communication and interaction with your manager/leader on your work performance. 

Finally, the goal-setting process must be an open, honest dialogue between manager and employee. All established goals should be agreed upon by both parties. Employees involved in the goal-setting process and committed to achieving those goals are highly motivated (Gallos, 2006). Lack of communication leads to ineffective and unproductive employees. Open and honest dialogue ensures that both manager and employee have a vested interest in successful completion of the goal, and facilitates a much simpler and stress-free end-of-year performance review.

More information on goal setting and the performance evaluation process can be found in my recent book, Corporate Leadership Selection: Impact on American Business, Employees, and Society (AuthorHouse). 

References

Gallos, J.V. (2006). Organizational Development. San Francisco, CA: Jossey Bass.

Gardner, R. (2009). Corporate Leadership Selection: Impact on American Business, Employees, and Society. Bloomington, IN: AuthorHouse.

Huse, E. (1980). Organizational Development and Change. (2nd ed.). St. Paul, MN: West Publishing Company.

Kouzes, J.M., Posner, B.Z. (2002). The Leadership Challenge. (3rd ed.). San Francisco, CA: Jossey Bass.