There was a time when goals weren’t used to evaluate people’s performance. The goal setting process was owned by the business rather than the HR department. Goals were used for managing the business, not people. Over time for well-intentioned reasons HR departments co-opted those business goals intertwining them with their performance management process. When that happened, business goals became personal. Achievement or failure against those goals became a proxy for an individual’s competence and contribution. In theory that made sense. We’ve all heard that what you measure is what you get. In practice, things aren’t always so simple. You may get what you measure but sometimes doing so comes at the cost of what you wanted. When people’s individual performance reviews are based on business goals, those goals often lose their effectiveness. It’s time to put goals back into the business and find more effective ways of evaluating people’s contribution.

Traditionally, goals served three important purposes:

• Creating focus around what needed to get done
• Providing benchmarks against which to measure progress (not people)
• Clarifying the key levers and drivers of business success

Goals weren’t about measuring people. They were about monitoring and measuring the health of the business. When goals weren’t being met it was a signal that new actions or decisions were required to get the business back on track.

When goals became part of the HR process some of that got lost. Goals still created focus. However, once goals start to influence an individual’s career the focus can become more about creating the illusion that things are on the right track rather than actually keeping them on the right track. That may be good at annual review time but it’s not good for sustaining a business.

When career success is linked to achieving goals the goal setting process gets flipped. Instead of starting out with what needs to be accomplished (the goal) and figuring out what needs to be done to achieve that, people start out with what they believe they can achieve and define that as the goal. As a result goals become less about driving change and making progress and more about maintaining the status quo. How many times have you seen individual goal statements that are really nothing more than a statement of an individual’s job (e.g., finish on time and on budget, meet service level agreements, etc.)? Goals should move the business ahead, not just keep it afloat.

Equating business success with personal success also creates a disincentive to raise issues or report progress clearly. I can’t tell you how often I’ve heard leaders tell me that they no longer use the color red on their scorecards because they don’t want things to look too bad when others see the report. That’s like disabling the alarm bell in your smoke detector because you don’t want people to know that your house is on fire because it might make you appear careless. It creates a good impression but you’re probably going to get burned.

Goals are meant to help you understand the health of your business. When your business is in trouble, you should raise every possible flag necessary to capture and rally people’s attention to get the problem solved. However, when business success and personal success are so tightly intertwined, instead of fixing problems, people often find ways to mask and distort them.

In addition to understanding the health of the business, goals should help you diagnose and take action. A good goal is a driver and component of a larger more encompassing goal. When the big goals aren’t being met, progress against smaller goals should be able to help you quickly identify where your problems lie.

When leaders know that they will be evaluated on their achievement of their goals, they often don’t select goals that reflect critical business outcomes or drivers. Rather they select tactical, activity-based goals that are much easier to achieve. This ensures that they are always hitting their targets and continually racking up their performance management “points”. Unfortunately this often can create an illusion of progress rather than reflecting actual progress. Activities don’t equal outcomes.

Activity-based goals make diagnosing and acting on business issues more difficult. When the big goals aren’t being hit, problems are masked because while the sub-goals (i.e., activities) are being met nothing is changing in the business. It makes it hard to isolate problems.

Good goals are essential to running your business. Individuals still need goals. However, those goals should be used to focus, measure, monitor, and drive business success. They shouldn’t be used in the performance management process. Goals should be about the business rather than the person.

Avail Advisorscan help you define outcome-based goals that help you drive business results throughout your organization. Check us out today at: http://www.availadvisors.com/services/creating-outcome-based-goals-and-accountability/

———————

Brad Kolar is an executive consultant, speaker, and author with Avail Advisors. He can be reached at brad.kolar@availadvisors.com.