And why do we need them?
Employee performance objectives, also widely referred to as performance goals, are one of the biggest determining factors for employee performance success. Performance objectives are designed to provide employees and teams with a clear and structured understanding of what they need to achieve, whether the goal be performance-based or development-led, and they serve as an essential measure of performance outcomes.
Typically, the goal-setting process involves assigning short-term objectives with clearly defined deliverables, and which crucially, must be achieved within a specified time period. Setting performance objectives in this way enables managers - and indeed, employees themselves - to continually track progress against goals and optimise end outcomes.
The art of good goal-setting for performance objectives
Of course, not every goal is a good one. A great many miss the mark because they’re vague or unattainable - and it’s a point that emphasises the importance of good goal-setting.
Good performance objectives help employees to focus on achieving their outlined deliverables in a way that supports wider business outcomes. In contrast, bad goals - those that are non-specific and/or poorly understood by the employee - can actually serve to impede performance rather than improve it. Unfortunately, research from Gallup suggests that poor performance goal-setting is a widespread practice, with only half of employees saying they strongly agree when asked whether they know what’s expected of them at work.
The biggest problem associated with obscure goal-setting is reduced productivity. When an employee works and doesn’t know what’s expected of them, they’re more likely to waste precious time and energy on peripheral tasks that don’t directly support the achievement of their objective. Over time, and at scale, that presents significant losses, both in terms of productivity and profit.
So we’ve established that clarity is key when it comes to employee performance objectives and performance evaluation, but what else supports best-practice goal-setting?
Connecting employee goals to business goals
Tracking and measuring individual employee performance has long been thought of as the primary purpose of goal-setting. But, while this certainly provides immense value, the benefits don’t stop there. The beauty of performance objectives is that, when done well, they can also act as a driver for employee engagement and motivation. We start this by setting smart goals that are clear and time bound.
So how does good goal-setting help to engage and motivate?
Team members who understand the purpose behind what they’re doing will be more able to understand how they’re contributing to the ‘bigger picture’ and problem solving. This context provides a vital connection - and as Dan Pink explains in his three-step motivation model, it’s one that is key to creating intrinsic motivation.
With that in mind, the importance of tying employee goals and performance objectives to organisational goals cannot be overstated.
Learning how to do this is a process in and of itself, but it’s one that can be supported by an effective performance management system. In fact, a study by McKinsey showed that 91% of companies with an effective performance management system are linking employee goals to established business objectives.
A collaborative (and engaging) process!
Performance goal-setting can support improved engagement and motivation in other ways, too.
At OpenBlend, we advocate for a collaborative approach to smart goals and goal-setting. One in which the employee or team takes an active role, together with their manager, in helping to define their own objectives. This approach presents a myriad of benefits, but perhaps the greatest win is this: employees who participate in setting their own goals are more likely to take accountability for their performance, and more likely to feel an engagement-building sense of ownership.
Crucially, collaborative goal-setting also promotes increased communication and transparency. It prompts employees and managers to openly discuss professional development goals, how employee can achieve their goals, raise concerns, ask questions, put forward suggestions, and listen to one another before an objective is set. Needless to say, that makes for a much better end result and improves performance reviews in the long term.
Frameworks for successful goal-setting
There are a number of different methodologies that can be applied to support employee performance evaluation and goal-setting and the SMART framework is arguably the most well-known and widely used. First developed in the early 1980s, it cites five key criteria that goals need to adhere to in order to be considered ‘SMART’:
Specific
Measurable
Achievable (sometimes swapped out for aspirational)
Realistic
Timebound
✅ An example of a good SMART objective: increase revenue by 5% on Q4 by hosting two prospect events in London
❌ ...and a not-so-SMART objective: increase sales by making more telemarketing calls.
Another objective-setting framework - and one that we live by at OpenBlend, is GROW. Developed around the same time as SMART objectives, the GROW model guides employees and managers along a structured path from goal assignment to goal completion. Here’s how it works:
Goal: set a clearly defined deliverable with a specified end point
Reality: factor in regular status checks to discuss any issues and monitor progress
Obstacles & Options: identify and communicate any obstacles preventing the employee from achieving their goal, and collectively agree how to manage these in order to stay on track (these are the options)
Way Forward: those options are then actioned, enabling the employee to see a way forward and successfully achieve their goal.
When applied in the right way, goal-setting frameworks such as these will support the creation of clearly defined and measurable objectives. That’s a big win, but there are some potential drawbacks, too. For example, SMART is sometimes criticised for its lack of flexibility - something that, if not carefully managed, can cause serious detriment to productivity and performance.
Let’s take a deeper dive into this need for agility and flexibility...
Agility beats rigidity
Agile performance goals, sometimes referred to as adaptable goals, can be easily adjusted in line with changing micro and macro events. So rather than forging ahead with a goal that has been rendered irrelevant by the shift to remote work, for example, an agile goal can be easily realigned before employee engagement and productivity begin to decline.
In his book, ‘Measure what Matters’, John Doerr introduces Objectives & Key Results (OKRs) - a goal-setting methodology that is especially popular for its amenity to change. OKRs are designed to be regularly revisited and realigned in accordance with evolving employee and organisational needs. For this reason, they’re particularly well suited to high growth companies, as well as organisations that operate in fast-changing industries.
At OpenBlend, we believe goal realignment should be a continual process underpinned by meaningful conversations, ongoing collaboration, and an effective performance management system. We reference the importance of communication and collaboration here because as humans, we are inherently resistant to change. The key to overcoming this lies in facilitating lots of open and honest discussion so that the employee understands why their goal needs to be changed and can become re-invested in achieving their new goal.
Performance tech: creating clarity and conversation
Of course, in the new world of remote work where goals are now largely discussed and agreed upon with the help of virtual communication platforms and performance management software, there’s an even greater need for meaningful performance conversations and clear goal-setting. As part of this, employees should have 24/7 access to a record of their goals, as well as visibility of company objectives so that they can see the company’s vision, and understand how their work is contributing to achieving that.
With the right combination of methodology and technology, good performance goal-setting can - and will - support business growth. To learn more about the OpenBlend performance management tool and how it can support performance management in your organisation, book a demo with us today. Or, for more information, you can contact us on 01628 613040 or email hello@openblend.com. We’d love to hear from you.
