Almost two decades ago, forward thinking business thinkers realized the idea that annualized reviews, evaluation, and goals (also their corollaries: annual raises, stock awards, and bonuses) were both demotivating and disconnected from the realities of work. Now, twenty years later, frequent informal communication is rapidly becoming the norm.
Let’s examine a critical piece of this frequent communication puzzle: goals.
There are myriad ways to set and review goals with employees, many of which have catchy acronyms like V2-MOM, CLEAR, PURE, FREE, MBOs, and OKRs. Some of these approaches bring interesting ideas to the process, but the most used technique is called SMART. When combined with other sound management techniques, SMART goals create more engaged and better performing employees.
SMART was first promulgated by George Doran in 1981 in the November issue of Management Review. Since then, the acronym has evolved to use a variety of similar words, but all based around the same core concepts in setting goals. One of the modern more optimal definitions of SMART is:
Specific. Measurable. Adjustable. Realistic. Time-Bound
Specific is self-explanatory. Measurable would seem to be as well, but the trick is to set objective numeric goals so that you can determine when you’ve exceeded them.
The “A” has traditionally stood for attainable, or before that assignable. However, adjustable is far more attuned with the modern work environment. The world moves significantly faster now with the advent of many real-time technologies like smart phone sand the internet. Things change rapidly and you don’t want to move at the pace of an organization from the 1980s. Sometimes a goal was set too high or too low, or it is clear the details need to change. Flexibility in business is integral to success and having adjustable goals is necessary.
Realistic is also self-explanatory. Time-bounding puts a deadline to every goal. Most have experienced Parkinson’s law, which states “work expands so as to fill the time available for its completion.” If there is no date when it has to be completed by, it might as well not be a goal.
Now, there are a couple of other techniques that are important to this process.
First, managers don’t just give their employees their goals. Nor do employees decide unilaterally. These goals are a collaborative effort, both in terms of setting the goals and achieving them. This doesn’t mean that the goal is not the employee’s, but rather that the manager’s role is to provide support. This can be done by removing obstacles or it can be about reminding or refocusing the employee. This is an important part of management and it happens at all levels of the organization.
A common situation might occur when a manager checks in on a particular SMART goal, and the employee says they are too busy with a more critical task and won’t hit the goal. The trick here is recognizing that it is time to go to “A”. Set a new goal to take care of the more immediate or more important task, then decide if the old goal is still pertinent. Typically it is still worth keeping, but it may be less critical and the time or details need to be adjusted. Employees will lose faith in the system and their managers if goals are set and not reassessed as conditions change. Generating a set of SMART goals and evaluating them a year later is a great way to demotivate even the best employee.
At the same time, it is important to make sure that not hitting goals has repercussions, and achieving goals is recognized and rewarded.
SMART goals are deployed by managers for a variety of purposes. Many managers use them to correct issues. Others use them for long-term goals. Still others put company key metrics into goals, so that output can be measured. It is usually good to have many SMART goals of differing temporal lengths (short-term, medium-term, and long-term), and at least one goal should always be a big hair audacious goals (BHAG). Employees don’t have to achieve every initial goal, and part of a winning set of goals is figuring out over time how to adjust the ones that turn out to be unrealistic.
It is important for employees to have both growth and performance goals. If you have only growth goals (i.e. things that are good for an employee’s career), you’ll end up with entitled employees who don’t feel like they have to produce. Likewise, a manager who only helps set performance goals will usually end up with low morale and employees with little loyalty, both to the manager and to the company.
Finally, it is critically important that when setting growth goals, each manager knows what an employee’s long term goals are. This is a really important conversation that needs to occur repeatedly over time. Without knowing and talking about what an employee’s long-term goals are, there is no way to approach setting meaningful growth goals. Further, the best SMART goals are those that align the employee’s goals with the company’s direction.