The Importance of Goal Setting

One of the most widely researched topics in the field of personal achievement is goal setting. Numerous studies over many years have substantiated that setting goals, particularly writing out goals, is the first and arguably the most important step to personal success (however that is defined).

This leads me to the topic of performance management. One of the keys to successful performance management is setting the right performance goals (or objectives if you wish) at the start of the performance period. Many organizations, and individual leaders, refer to this as the “performance plan”. It’s like a business plan for one. We are all much more likely to hit a target that has been clearly defined, to reach a destination that has been clearly identified and yes, achieve a result that has been clearly articulated and discussed (i.e. understood). Having clearly articulated goals is a must regardless of how those goals were established (e.g. in a participative manner with agreement and buy-in or handed down from the person in charge). It’s better to have written goals than not, better still to have clearly written goals established collaboratively and agreed upon; and best to have clearly written, collaboratively established goals in which the standards, metrics and accountability are clear.

Since we know that priorities shift and plans, in turn, have to change, performance goals may also need to flex. That’s why there is a need for ongoing discussion about the goals. Once goals are established, leaders should have ongoing dialogue with their employees about progress toward goals. Here’s where leaders provide performance feedback, coaching and redirection if necessary. One-on-ones may be used for this purpose and discussions centered on established goals can easily stay focused and meaningful. If problems or obstacles develop, they can be identified early and solved, corrected or used to consider adjustments and changes to the goals themselves. Sometimes, corrective action is needed and performance improvement plans must be established. Of course, occasionally individual performance is poor enough and so unresponsive to coaching or other developmental activity that the leader’s only recourse is a progressive discipline process.

The culmination of an effective performance management process is the completed performance review or appraisal (completed at least annually) that accurately documents the results achieved relative to the goals set or the results expected. From here, the new performance plan is developed and the cycle starts again.

On the subject of developmental plans, I personally think that establishing the performance goals or plan should include and integrate individual developmental goals so that these can be evaluated in the same manner as other results expected. New developmental goals should be “brought forward” into the next performance year so that there is continuity and a building from one year to the next on the business results and developmental progress.

In summary, an effective performance management process needs to start with “goal setting”; business goals; then individual performance goals aligned with the business goals; and finally, developmental goals aligned with, and in support of, individual performance goals. The overall process might look like this:

1. Establish performance and developmental goals in line with business goals/strategy

2. Identify competencies that need to be demonstrated for effective performance (or if a competency model is in place and being used)

3. Monitor progress toward goals and provide ongoing coaching, feedback and other necessary resources

4. Adjust goals as needed based on changes in strategy and priorities

5. Appraise performance informally at mid-term (e.g. 6 months)

6. Formally appraise and document performance at full-term (e.g. 12 months)

7. Establish new performance and developmental goals for the upcoming performance year


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