Well, as it turns out, quite a lot. There are plenty of examples of when this process has ended in disaster. One of the most extreme cases is the Ford Pinto. Employees were set the seemingly simple goal of “building a car that weighs under 2,000 pounds, costs less than $2,000 by 1970.” What this goal failed to stipulate is that the car should be roadworthy. In order to meet the deadline, corners were cut, safety tests were overlooked and the car was designed with the petrol tank in a dangerous position. If the car was involved in a rear-end collision, the tank was likely to be hit and go up in flames. This led to numerous fires causing dozens of deaths and life-changing injuries before the Pinto was eventually withdrawn.
While this may be an extreme example and most poor objectives won’t lead to such fatal results, it does show how important it is to take time and care over this process. What can at first glance seem like reasonable objectives, with a little more scrutiny can be revealed to be flawed, doing more harm than good.
If my objectives are SMART, that’s enough, right?
Well, it’s not quite that simple. Making objectives SMART is certainly essential, but that alone shouldn’t be the end of the process. As a reminder, SMART stands for:
- Specific – related to a particular person or team, and to a concrete task.
- Measurable – include a figure to act as a benchmark which success can be judged against.
- Achievable – be realistic and appropriately stretching given the business context.
- Relevant – related to the current focus of the department or business, and the external environment.
- Timed – have a timescale for when it should be achieved, such as within three months.
If we go back to the Ford example, what went wrong? What started out as a laudable goal failed catastrophically as it was too narrowly focused on achieving the goal at all costs, without input from important voices from across the business, such as health and safety. It cleared wasn’t reviewed and reassessed at any time. All eyes were on hitting the deadline, rather than making sure the car was not only built, but safe to drive. An affordable, lightweight, safe car could have been produced if the objective had been adjusted to allow the necessary checks to be completed.
The goal was concentrated solely on the company's needs, forgetting those of the customer. When setting performance objectives, it’s vital to consider the whole picture and everyone who might be affected.
Who should be involved in creating performance objectives?
Effective objective setting should be a collaborative process, involving the manager and their employees. It is important that there is a joint understanding of what really matters to make sure everyone is on the same page. It should also be clear that these can be adjusted if priorities change for any reason or if it becomes obvious that the objective is unrealistic.
Creating objectives in a vacuum can be dangerous. Thinking about the wider business, other departments and stakeholders, like customers or investors, grounds them in reality and helps to prevent serious disasters.
The right objectives can help employees fly, driving them on to achieve bigger and better things. If they believe in what they are doing and can see the impact of their efforts, they’ll have the desire to get the job done. Setting poor objectives, rooted in fantasy and misconceptions can have the exact opposite effect.
Getting performance objective setting discussions right
To help managers avoid the potential pitfalls and set their employees on the right track, we’ve produced two handy guides.
The first, How to…. prepare good objectives and hold an effective objective-setting discussion sets out what managers should do to prepare for objective setting discussions to make them as productive and successful as possible.
The second, How to…. set good objectives (top ten do’s and don’ts) helps both managers and employees think about what they should include in their performance objectives, and importantly, what they should avoid doing.
Our Customer Success team has worked with hundreds of customers to help them set effective performance objectives. If you need more support in setting better objectives that focus and motivate your employees, get in touch.