In my last post I asked that you at least question whether you need an objective section within your annual performance appraisal. It is though the most common section, so let's look at it in some detail.
The basic tenet of objectives is that they should be SMART (Specific, Measurable, Achievable, Realistic, Timely). While, this is a useful place to start it is worth recognising that SMART tended to be used in project management or marketing circles first. We recommend that you set your objective questions with SMART in mind but you are not restricted to it – for example, the subtlety of achievable versus realistic is often unnecessary.
So, you want managers or individuals to set objectives that are specific and difficult (remember you goal theory). But, here is where the problems lie. It is not necessarily in the individual's interest to set difficult objectives. Not from an inherent laziness (I firmly believe that employees are not inherently lazy) but if the performance appraisal process has consequences then it requires a particularly brave person who sets themselves a challenging target. We suggest that you follow the steps below to ensure objectives are well-set and that you generally have managers set objectives rather than the individual themself.
This is not cast in stone, and we are not advocating this process happens without a dialogue but in the end, the manager sets the objective.
Our general recommendation is that you reduce the time-period for goals. An annual goal is subject to a large number of external influences that make it unlikely to lead to sustained effort. It is likely to be affected by influences outside of the appraisee's control, it is difficult to remain motivated to the goal should you start to over- or under- perform against it, and it may need to change over the course of a year.
An attractive but elusive goal of objective setting is to allow the organisational objectives to cascade through the company. The theory is deceptively simple – we set the organisational strategy and the senior team set their objectives based upon it. The next level down set their objectives in order to achieve their manager's objectives – cascading down a set of well aligned objectives.
Our experience of cascaded objectives in performance appraisals is less positive. First, you should consider the practical problems of the time taken to allow the cascading to take place. Most organisations struggle to let it happen. Second, it relies on objectives to be clearer and somewhat simpler than they tend to be. Third, it assumes omnipotence on behalf of the senior team – they need to get the strategy so right and their own objectives so accurate that others beneath them don't need to create objectives outside that are actually needed.
There is a simpler and we believe better way of achieving alignment without prescription in this way. Our suggestion is that all objectives should be allocated against broad themes set by the organisation. Frankly, there are times when people set objectives that have little to do with the business or focus of the organisation and the theming brings this in line.
In summary – keep this section simple: what am I going to do, when am I going to do it (not too far away), what do I need to help me do it and what measures am I putting in place.
Excerpt from our performance appraisal white paper.