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Thursday, January 13, 2011

What is the motive or the theory behind Performance Appraisal? V (More on Goal Setting)

Click on the earlier post for reference

Now we are prepared for the Goal Setting exercise to commence. I think more emphasis to be laid on the Goal Setting exercise than the Performance Evaluation in the whole life cycle of Appraisal – why because if goals are loosely set then even the performance of a competent person will also affect and further the evaluation will not be done properly and it will leave a bitter taste for the Appraises and will demotivate them to Perform further and they may even look out for change. Now first let’s discuss the steps in Goal Setting in detail and then we will understand with some examples.

We can divide the Goal Setting exercise in 6 steps. They are:-

Step 1 - Vision

The first step in setting goals and priorities is to personally develop what the organization should look like at some point in the future — a vision. A junior leader, such as a supervisor or line manager, will mainly be concerned with a department, section, or small group of people, while senior leaders set the vision for the entire organization. However, both types of visions need to support the organization's goals.

Step 2 - Goals

The second step involves establishing goals, with the active participation of the team. Goals are also stated in unmeasurable terms, but they are more focused. It’s like selecting a path, a way, a road to the vision. For example, "The organization must reduce transportation costs." Or “The Sales Department must reduce the rejection rate.” Or “The Admin Department must reduce the Daily expenses without cutting on the facilities”. Or “The IT Department must reduce the turnaround time for any ticket raised.” This establishes the framework of the vision. 

Step 3 - Objectives

Definable objectives provide a way of measuring the movement towards vision achievement. This is the real strategy of turning visions into reality. It is the crossover mechanism between your forecast of the future and the envisioned, desired future. Objectives are stated in precise, measurable terms such as "By the end of the next quarter, the shipping department will use one parcel service for shipping items less than 100 pounds and one motor carrier for shipping items over a hundred pounds." Or “All salesperson will reduce their rejection rate by 30% by next quarter.” Or “We will reduce the daily expenses by 15% in next six months.” Or “We will reduce the response time to minimum for any ticket.”  The aim is to get general ownership by the entire team. 

Step 4 - Tasks

The fourth step is to determine tasks. Tasks are the means for accomplishing objectives. Tasks are concrete, measurable events that must occur. An example might be, "The transportation coordinator will obtain detailed shipping rates from at least 10 motor carriers." Or “Each salesperson will do a complete homework on the client before the final assault.” Or “Fresh quotations would be invited from various vendors and finalized after the rate is bargained to a lower level.” Or “Develop a mechanism for a speedy ticket raise and automatic approval by manager.”

Step 5 - Timelines

This step establishes a priority for the tasks. Since time is precious and many tasks must be accomplished before another can begin, establishing priorities helps your team to determine the order in which the tasks must be accomplished and by what date. For example, "The shipping rates will be obtained by May 9." Or “The new rates from fresh quotations will be finalized within a week.” Or “The new mechanism will be up and running in a month.”

Step 6 - Followup

The final step is to followup, measure, and check to see if the team / person is doing what is required. This kind of leader involvement validates that the stated priorities are worthy of action. For the leader it demonstrates his/her commitment to see the matter through to a successful conclusion. Also, note that validating does not mean to micro-manage. Micro-management places no trust in others, where as followingup determines if the things that need to get done are in fact getting done. 

I think now you have got a clear picture on how to set goals and what are the important steps in the exercise that ensure the positive and fruitful conclusion. I would like to point out to all the stakeholders that though this exercise is a part of performance appraisal system where the performance of appraise is evaluated on this dimension it should be conducted with a mindset of performance improvement system. 

If we have mentioned the word mindset then lets discuss the mindset while setting SMART goals to achieve. SMART is a methodology of goal setting which I will discuss along with a much fresh methodology on the block.

So, we were talking about the mindset. All the things that we have discussed in the goal setting till now seems like an academic chapter which generally gives you a base on which you yourself have to cultivate your thinking and methods. 

Now let us discuss as to how actually we settle on a goal. Like if we have zeroed in a Goal e.g. “Reduce the overlay expenses by 20% “ or “Reduce the rejection rate by 30% without increasing the cost”, and then this discussion will clear your apprehensions as to how to come up with such specific goals. 

As we all now know that for the goal setting exercise to commence the manager and the employee should be clear about the job, tasks, responsibilities, functions, competency of the employee etc.

Now, the following questions need to be asked and accordingly answered:-

  1. What do you want that you don't have? (Achieve)
  2. What do you want that you already have? (Preserve)
  3. What don't you have that you don't want? (Avoid)
  4. What do you have now that you don't want? (Eliminate)

Make a grid like structure as illustrated below:-


And jot down all the relevant answers in the grids. Now the only thing that you have to do is to jumble up the words to come up with a sentence and EUREKA !!!! THIS IS YOUR GOAL.

Isn’t simple???? Do you want me to explain it with some live example???????

I will appeal to all that we all should set personals goals for ourselves  and make our growth path a well identified, marked track where there is minimal chance to deviate or go wrong.

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