Make sure after all goals are set, you review them and reconcile them. Eliminate double-counting. Ensure people understand each other's goals so they can look for opportunities to help others succeed or to collaborate. Understand/highlight dependencies. For example, how one employee may not be able to achieve her goal until another employee implements system changes.
- Once you've gone through the goal setting process, you need to take a step back and look at all the goals in their entirety and reconcile them. Make sure after the goals are set you review them and reconcile them for things like double counting, and clearly define how you're going to measure each of the goals. You'll also want to look at having people understand what everybody else's goals are so they can look for opportunities to help one another or possibilities where goals may be in conflict.
Make those goals public. It'll help you understand what some of the dependencies might be. You may have a situation where I can't hit my goal until Joe hits his goal of implementing the system changes, so then you know if that goal doesn't happen, than this goal is at risk. Some of the biggest challenges you're going to find as it relates to goal setting and incentives are double counting and measurement. In terms of measurement, what's your baseline? Understand what the baseline is and make sure everyone in the organization knows where you're measuring from.
Is your baseline going to be what we did last year? Is your baseline going to be test versus control group? Lay out that baseline that they're starting from so at the end of the year or at the end of the goal period you know how much progress they made. Second, what reports and data are you going to use to measure. Let people know up-front we're going to pull the revenue numbers from this report, so when they're tracking their progress against their goals, they know what numbers they should be looking at.
The last challenge is de-conflicting your initiatives. You can only count a revenue dollar once. You can only count a profit dollar or a cost-savings dollar once. So many times, the initiatives you're going to pursue will have some degree of overlap, and if you add up all those goals at the end of the year, you may find that the organization is saying, "We made $20 million more than we made last year." When you look at your financials, you only made 10 more because you have double counting going on.
Every single improvement you make, every initiative you pursue, and every goal you say you're going to hit should foot to actual financial or operational results. When you identify a risk of double counting initiatives, make the reporting as precise as possible before finalizing the goal because on the back-end it's very frustrating to de-conflict those goals and decide who gets credit for delivering that one dollar of sales. You've set people's initiatives based on those goals.
Waiting until the back-end to get that measurement right is going to be problematic. Invest the time up-front de-conflicting goals and reconciling things. Look for the double counting, establish the baseline, understand what reports and data you're going to use to measure, and de-conflict initiatives so you can get rid of those double counts. It will make managing your goal setting process much easier when the goal period is over.
Along with providing guidance on how to link individual employee goals to organizational strategy, Mike walks you through the different types of goals, including bottom-up, zero-based, commit, and stretch goals. He also helps you use goals to change behaviors, build new skills among employees, and make goals actionable by using incentives and tying them to specific activities. He concludes with a comprehensive plan for setting and implementing goals, and some tips on dealing with challenges such as conflicting goals.
- Identifying goals and goal types
- Setting SMART goals
- Linking goals to business strategy
- Building goals from the bottom up or top down
- Creating stretch goals
- Outlining activities and resources to help employees achieve goals
- Reviewing and revising goals
- Reconciling conflicting goals