Tutorial: Performance Management (cont. 4)

2. PLANNING PERFORMANCE

The difference between GOALS and OBJECTIVES

GOALS comprise broad statements of desired conditions or outcomes, normally set by organisations or business units during strategic planning (e.g.: "To increase market share by 20%"). OBJECTIVES, on the other hand, are statements of specific results to be achieved by teams or individual employees to accomplish a goal, and are measured quantitatively or qualitatively (e.g.: "To achieve average sales of $300 000 per month from 1 June 2005).

Why set Objectives?

The setting of objectives effect performance in at least three ways:

• When employees are given specific objectives, they tend to perform better than when they are told to do their best or when they receive no guidance at all
• Specific objectives reduce uncertainty about what is expected, and focus behaviour in the direction of the objectives rather than elsewhere
• Objectives energise behaviour, motivating people to put in extra effort, to live up to the challenge of achieving them
  

Setting Objectives and Standards: A Participative, Collaborative Process

Objective setting should be a face-to-face, participative and collaborative process between employees and their line managers at all levels in the organisation. Collaboration will:

• Add to the quality of the decisions being made
• Increase an employee's motivation and commitment to achieve the agreed objectives
• Effect the employee's believe that the objectives are achievable
• Ensure more realistic objectives as an employee normally knows best what he is capable of achieving, and what resources will be needed

Mutual agreement regarding objectives and standards is the ideal (and preferable), but not always possible. In the end, the line manager will have the final say in this as long as he is reasonable in his expectations.

Some cascaded objectives may also be in the form of directives from above, and therefore not negotiable, but, at the very least, there should be mutual understanding, acceptance and buy-in

In the collaborative process of developing standards for a continuous objective or function, include all of those employees whose work will be evaluated according to those standards. For the sake of fairness and consistency, consider collaborating with other units in your organisation or department if employees reporting to different line managers perform the same tasks or functions.

Operational Sources for Objectives

In the previous section it was demonstrated how corporate goals are cascaded all the way down the organisation to the point where objectives for individual employees (or teams) are agreed. This is an important "strategic" source for individual objectives. But it is not as if we have to wait every year for this cascading process to reach individuals - this might take months!

There are many other "operational" sources for objectives that pressurise us continually - things that demand our attention and action throughout the year, such as:

• Existing Team/unit operational objectives
• Job/Role Descriptions
• Previous performance reviews
• New products and services
• New technology
• Anticipated market conditions
• Performance data, e.g. sales statistics, reports, production reports, client feedback
  Competitor moves
• Other threats, opportunities and crises posing themselves continuously
  
  

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