Dorf, who is managing director of Compensation Resources, Inc. in Upper Saddle River, NJ., recommends following the SMART approach in developing goals:
- Specificity
- Measurement
- Attainability
- Results-oriented
- Timing
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!
Performance Objectives By Employee Level
Typically, goals are differentiated by employee level, Dorf says. For example:
- Senior/top management goals focus on overall company performance
- Middle managers focus on business unit/functional performance
- Professional/technical goals are often project related
- Staff goals (when needed) focus on individual development
Maintain ‘Line of Sight’
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.
Multiple Performance Objectives Are Required
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:
- Establish goals that drive the business plan
- Consider goals that look at performance against peers, that is, industry comparators
- Look at financial metrics that are key indicators of performance, for example:
- Loan reserves within commercial banks
- Market share for manufacturing companies
- Number of new clients for professional service companies
Wage and hour simplified? Yes, we’ve done it with BLR’s trusted guidebook, Wage & Hour Compliance Solutions for HR.
Here’s Dorf’s goal-setting worksheet:
Sample 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:
|
Level |
Corporate Performance |
Business Unit Performance |
Individual performance |
|
CEO |
100% |
0% |
0% |
|
Business Unit Management |
50% |
30% |
20% |
|
Department Management |
40% |
40% |
20% |
|
Professional/ |
20% |
40% |
40% |
|
Individual Contributor |
10% |
40% |
50% |
Wrap Up Story
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 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.
Reality is, be sure you know what you’re asking for.
Setting good goals, one of dozens of compensation challenges, and in 2012, there’s not much taking as much time and energy as wage and hour—off-the-clock work, calculating “regular rates,” dealing with exemptions, complying with the Fair Labor Standards Act (FLSA), it can be confusing and challenging for even the most savvy compensation practitioner.
Worse, the law’s complex requirements can easily land companies on the wrong side of a lawsuit or DOL investigation. In fact, there are more wage and hour lawsuits pending in the federal courts than all other employment claims combined.
You need guidance and there’s no better go-to desk reference –than BLR’s Wage & Hour Compliance Solutions for HR.
This handy reference provides you with detailed guidance on how to comply with the FLSA and takes you step-be-step through the most complicated wage and hour issues that HR practitioners encounter.
Overtime hassles? Exemption hassles? Off-the-clock work? FLSA-related lawsuits are hard to fight and expensive to settle. Avoid them with BLR’s trusted guidebook, Wage & Hour Compliance Solutions for HR.
Wage & Hour Compliance Solutions for HR features:
- Real-world examples of wage & hour challenges, and how to solve them
- Multiple quizzes, so you can see where you need to review more carefully
- An overtime exemption audit checklist, so you never make the wrong call
- State-specific charts, for comparing your multi-state obligations
- Sample policies, easily modified to fit your specific preferences
- A quarterly newsletter, Wage & Hour Compliance Bulletin, to keep you aware of the latest developments in the law, and what you have to do to comply.
- Not just a manual; you also get a CD with customizable forms and checklist
Correctly apply the FLSA at your workplace and remain the go-to expert with this comprehensive guide–save hours of research and time creating policy or forms from scratch.
To order or get more information: Wage & Hour Compliance Solutions for HR