People and teams will miss goals. When this happens, there need to be consequences. Unless there are mitigating circumstances, follow through on incentive plan implications. If missing the goal was beyond the team's control, assess how much of that miss was attributable to them and how much responsibility lies elsewhere. Hold people accountable accordingly.
- People are going to miss their goals, things happen, but when it happens, there need to be consequences for missing that number. Unless there are mitigating events, follow your incentive plan's implications. I know one business unit that missed its top-level revenue goal and its bottom-line profit. Even though there were explanations and excuses, the bottom line is, the business unit didn't adjust quickly enough. They didn't plan well enough to be able to still hit their goals, even with these market changes.
That year, their incentive payout was zero. The organization held them accountable. The impact of that was the next year, they planned a lot better. They acted more quickly when they saw issues come up. They did a better job of linking their goals to activities. That year they hit their stretch and they got a big payout. If missing the goal was beyond the team's control, assess how much that miss was attributable to them and how much responsibility lies elsewhere.
Hold people accountable accordingly. I know a retail business unit that had a revenue and customer satisfaction goal. There were several major IT outages over the course of the year. Those happened because of a new system implementation. This retail business unit lost out on web sales. There were service issues because their customer service reps couldn't handle customer calls well. Their goals were adjusted downward because IT was out of this organization's control.
And by the way, IT was held accountable for poor implementation of the system and it showed up in their goals. When teams miss goals, make the tough call out of fairness to everyone. Pain is a great teacher and you have to remember that if one team misses their goal and another hits their goals, that team that hit their goals and worked really hard will be pretty frustrated when they see the other team get an incentive they don't deserve. Be fair about it, hold people accountable accordingly, so they know their goals mean something to the organization.
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- Set corporate and business unit goals.
- Define driver metrics.
- Explain the concept of supporting goals.
- Identify benefits of tying goals to strategy and incentives.
- List ways to troubleshoot and communicate goals.
- Describe how to hold others accountable and avoid pitfalls.