Making new year resolutions is a common norm all over the world. Every new year’s eve, people set certain goals and promise to stick by them. Learning a new skill, speaking up in meetings, and eating healthy are a few examples of new year resolutions people make. These goals provide them with focus and a definite path to follow the entire year. Goal setting in organizations is a similar and rather significant annual exercise.
Goal setting enables organizations in laying a solid plan for the upcoming financial year. The importance of goal setting for organizations is deep-rooted in its long-term success.
Goals with a top-down approach
A well-intended goal setting exercise lets leaders and management sit together and set clear goals for the organization first. These goals define a wider perspective of what the organization wants to achieve as a whole in the following year. Next, the organizational goals are used as a base for setting department and individual goals. Therefore, the top, middle, and lower-level members of the organization are all on the same page and are aware of what is expected of them.
It’s imperative to measure goals throughout the year. Certain quantitative and qualitative criterion is put in place to compare expected and actual progress. Measurement of goals is important to manage shortcomings and lack of performance. Moreover, the goals are spread quarterly, making it practical and convenient to keep a periodic track.
Track Individual and Collective Performance
Department and individual goals with their relative measurement methods enable managers to gauge the performance of an individual employee and that of teams/departments. For example, a 20 member Sales department of an Insurance company may be lacking behind its departmental sales target; however, 5 employees may be on track with their individual goals. The overall team result overshadowed the individual performances of those 5 employees.
Adaptability to Change
The business world is all about changing scenarios and unforeseen events. Therefore, a well-documented goal plan comes into play when an unexpected occurrence takes place. The goals can be updated, modified, or replaced if they are no longer relevant to the current business situation. The adaptability to change and staying aligned with the organizational vision is only possible through proper goal setting.
Empowerment and Autonomy
SMART (specific, measurable, attainable, relevant, and time-bound) goals give employees a sense of empowerment and autonomy. Employees are in charge of their projects and have clarity on the deliverables. Having the end goal in mind is key to planning and successful execution of targets and reaching intended outcomes.
Personal Accountability of Employees
Goal setting enables employees to take personal responsibility for their performance. Since the goals are documented and agreed upon, therefore, employees can track their target timelines. This allows for the identification of improvement areas and accountability for lacking behind.
Target Achievement and Rewards
Goal setting is linked with rewards. Employees who successfully achieve their work and performance targets are rewarded against defined criteria. The reward system boosts employee engagement, retention, promotes healthy competition, and provides motivation for hard work.
Our expert consultants at métier can help your company develop Goals, and Key Performance Indicators (KPIs), along with a comprehensive performance management system and rewards strategy. Reach out to us today for a customized solution for your organization.