Dorf, who is managing director of Compensation Resources, Inc. in Upper Saddle River, NJ., recommends following the SMART approach in developing goals:
Remember, says Dorf, sometimes the pay-for-performance goal is a milestone, not the full completion of a project. For example, he says, he worked with a client that was building an aircraft carrier—an 8-year project. Clearly completion was not a good annual goal!
Typically, goals are differentiated by employee level, Dorf says. For example:
Keep in mind that you can only hold someone accountable for those things he or she can impact directly. The “line of sight” concept helps you as much as possible to avoid the situation in which the major goals are not under control of the person with the goal.
Never have one performance measurement, says Dorf. It’s too easy to manipulate one measurement. For example, you can always increase net income by not paying bills, and you can increase revenue by cutting margins.
In setting goals, don’t forget:
Managing an HR Department of One was recently recognized as one of SHRM's "Great 8" best-selling products. Examine it at no cost or risk for 30 days and find out what all the buzz is about.
Here’s Dorf’s goal-setting worksheet:
Performance Goal: Provide a written statement summarizing the goal, including the expected end result(s).
Accountability: Indicate the individual(s) responsible to lead the accomplishment of this goal.
Performance Measures: Identify the key quantitative and qualitative performance measures that should be used to determine if, and to what extent, the goal has been achieved.
Timetable: Indicate the target date for completion of the goal.
Resources Needed: Identify the expected budget and staff requirements necessary to achieve the performance goal.
Influences/Constraints: Identify potential obstacles, prerequisites, and intradepartmental activities that could impact the ability to accomplish the performance goal.
Milestones: Identify the major milestones and corresponding dates that indicate the extent to which the goal has been achieved.
Documentation: Identify documentation needed to support the achievement of each milestone, as well as goal completion.
Goals should be weighted, Dorf says. Here’s his sample Weightings Schedule:
Business Unit Performance
Business Unit Management
Dorf collects wine bottle labels as a hobby. He was in a restaurant and loved the label on the bottle. He asked the waitress, “Can you get the label off this bottle for me?”
She said, “Sure.” Later she came back to the table holding the naked bottle, and said, “I had a hell of a time scraping that label off, but I finally got the bottle clean for you.”
The reality is, when you set goals, be sure you know what you’re asking for, Dorf says.
Setting goals and managing compensation—it isn’t easy in any company, and in a small department, it’s just that much tougher.
BLR’s Managing an HR Department of One is unique in addressing the special pressures small HR departments face. Here are some of its features:
Feel as if you're all alone in HR? Take on a partner—Managing an HR Department of One. Examine it at no cost or risk for 30 days. Get more information.
If you’d like a more complete look at what Managing an HR Department of One covers, click the Table of Contents link below. Or, better yet, take a look at the entire program. We’ll send it to you for 30 days’ evaluation in your own office with no obligation to buy. Click here, and we’ll be happy to make the arrangements.
Download Table of Contents
Order or Get More Information
If you have comments about this tip and want to post them on this page to share your thoughts with other HR Daily Advisor readers, simply enter your comments below. NOTE: Your name will appear on any comments posted.
Copyright © 2013 BLR Business & Legal Reports Reproduction in whole or in part without permission is prohibited.