Goal Setting

Human Resources professionals enact the importance and criticality of having good business objectives to fuel the incentive systems.

By "touching the pocket" of employees, incentive systems tied to the fulfillment of objectives provide to the business with an excellent opportunity to effectively communicate success scenarios and the desired or expected behaviors to be successful.

Generally, the processes used for Goal Setting work well at the highest levels of the Organization. We refer to the CEO -or equivalent- and his direct reports. At this level it is natural to reflect the company's strategy in the objectives, and it is rare to see misalignment or lack of relevance in these objectives.



However, and as a consequence of decentralization, it is enough to advance only one level down the organizational pyramid to find inconsistencies of different types. And the further down the structure we go, misalignments and potential improvements tend to reproduce themselves exponentially.

Even assuming that the company uses methodologies such as Objectives S.M.A.R.T. (you are probably familiar with this acronym: Specific, Measurable, Achievable, Realistic and Timely objectives), and apply this tool conscientiously -which is not frequently-, even so, as we descend in the organizational pyramid, problems related to the "interaction of objectives" usually appear, such as:

• There are injustices and equity issues in terms of complexity or difficulty in achieving one's goals (e.g. "...my peer was given much easier goals than mine.")
• The weight or relative importance of an objective does not coincide with its complexity, difficulty to reach or even the probability of reaching a certain level of achievement (e.g. "...I abandoned my effort to reach this objective, it was very difficult and only weighed 10% of the total...").
• Objectives are set, the fulfillment of which is achieved by working in teams with others, without these others having the same objective (e.g. "...to achieve this objective I depend on the collaboration of so-and-so, but he was given other objectives...")
• There are objectives that, although useful, are not the most useful, or those that would best contribute to the creation of value or strategy of the company, or are not associated with the critical paths in place (there are tools such as Value Trees to address this issue).
• Too many objectives have been defined, and consequently it is difficult to achieve focus.
• Conflicts of interest appear between areas or functions (e.g. commercial vs. production, audit vs. finance). In matrix structures, there is usually a conflict between the objectives set by the primary/geographic report and those desired by the functional one, or vice versa.

It turns out that it is not enough to achieve SMART objectives, as this rating focuses on rating and improving only on individual objectives.

It is highly recommended to analyze the interaction and alignment between the objectives of different employees, teams, areas and management.

Correcting these problems takes time and effort, but...

The potential return is enormous!

There are few opportunities as clear as this one for Human Resources to show its approach and add value to the business.

From CompStrategy we have developed an effective methodology to help improve the process of Target Setting until the desired level of excellence is reached. Do not hesitate to contact us.