Making sense of the different methods of goal setting
Performance management can appear on the surface quite complicated, associated with lots of specific terms and acronyms. However, its core aim is very simple – ensuring employees are working effectively to reach their full potential.
To do this they need to know the answers to the following questions:
- What are they aiming to achieve?
- How are they going to achieve them?
- When will they know when they've been successful?
Objectives provide the answers to these questions. There are many different types of objectives with various theories behind them. However, they all have the same aim – to provide focus and purpose. More emphasis may be put on company alignment, building unity or inspiring individuals to excel, but at heart they are all trying to do the same thing.
Which approach you choose is very individual. What works for one organisation might be completely ineffectual for another. It depends on the culture, heritage, and structure of the company.
Different methods of goal setting
SMART stands for:
- Specific – relates to a particular task or activity
- Measurable - includes something, usually a figure, to benchmark success against
- Achievable - something that can be done by the individual or team the objective relates to
- Relevant – relates to the current focus of the team/department/organisation and the external business environment
- Timed – has a timescale attached to it by which it should be achieved
For more information on SMART objectives, read our guide on how to set them effectively.
SMART objectives were first articulated by Peter Drucker in the 1950s. He created these as part of a wider strategy management model - Management by Objectives (MBO). This aims to improve the performance of an organisation through clearly defining objectives that are agreed to by both managers and employees. The theory is that by having a say in their own goal setting it encourages participation and commitment from employees as well as fostering better alignment.
Critics to the approach say that it leads to employees trying to achieve their goals at any costs. This can create unhealthy internal competition and make people work alone instead of fostering collaboration and teamwork.
In this framework, objectives are meant to be challenging, but achievable. Employees need feedback on their progress and the focus is on reward not punishment, with personal growth and development emphasised. Drucker never intended it to be a magic bullet for managers, but a tool to help them perform better.
OKR stands for Objectives and Key Results. They were developed by IT giants, Intel in the 1990s. Since then, they’ve been adopted by many organisations, most famously Google. They were designed to help employees dream big, with large scale, ambitious goals designed to challenge.
The objectives set should be SMART and the key results quantitative and measurable. Each objective should be measured against between two and five key results. They are often confused with KPIs. These measure an ongoing process while key results are how close you are getting to your goals.
For more details, read our simple guide to OKRs.
V2MOMs were created by Salesforce CEO Marc Benioff in 1999 when he co-founded the company. They are based on the following five questions:
- Vision – What do you want to do?
- Values – What’s most important about that vision?
- Methods – How will you get the job done?
- Obstacles – What challenges, issues and problems stand in your way?
- Measures – How will you know when you’ve succeeded?
The objectives are based on the answers to these questions and are created at organisation, departmental and team level. These are shared across the business, so everyone knows the purpose and direction of the company and all objectives are aligned with an overall strategy.
To find out how V2MOMs work in practice, read about how global software organisation, Exact use them.
These have evolved from V2MOMs and the acronym stands for vision, priorities, methods, obstacles, and measures. They are expressed as a one-page document communicating these five areas of strategy. In VPMOMS, the word values has been substituted for priorities. This is to focus attention on the most urgent requirements and avoid confusion with the core values of the organisation. As with V2MOMs, they are designed to apply to the whole company and alignment is the most important intention behind them.
This is a strategy execution and goal tracking framework described by Chris McChesney, Jim Huling and Sean Covey in the book, The 4 Disciplines of Execution. In some ways the approach resembles OKRs with a similar emphasis on focusing on important goals. The goals best suited to 4DX are ambitions in scope, but the intention is to achieve them.
The 4 disciplines are:
- The discipline of focus – concentrate on what’s most important, or as they put it in the book: Focus on Wildly Important Goals (WIGs).
- The discipline of leverage – consider your limits on time and resources, concentrate on the goals that you can achieve.
- The discipline of engagement – bring employees with you on the journey by tracking progress regularly.
- The discipline of accountability – ensure you follow through with actions. This is the most crucial part.
Here are more details about how to put this approach into action.
Whatever approach you choose to use, we can help make it work for you. Our Customer Success team are experts at putting plans into action. Speak to the team to help make your process as effective as possible.