Goal Setting with the "SMART" System

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

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:

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:

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 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:

• Explanation of how HR supports organizational goals. This section explains how to probe for what your top management really wants and how to build credibility in your ability to deliver it.
• Overview of compliance responsibilities, through a really useful,         2-page chart of 23 separate laws that HR needs to comply with. These range from the well-known Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and new healthcare reform legislation, to lesser-known, but equally critical, rules such as Executive Order 11246. Also included are examples of federal and state posting requirements. (Proper postings are among the first things a visiting inspector looks for—especially now that the minimum wage has been repeatedly changing.)

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.

• Training guidelines. No matter the size of your company, expect to conduct training. Some of it is required by law; some of it just makes good business sense. Managing an HR Department of One walks you through how to train efficiently and effectively with a minimum of time and money.
• Prewritten forms, policies, and checklists. These are enormous work savers! Managing an HR Department of One has 46 such forms, from job apps and background check sheets to performance appraisals and leave requests, in both paper and on CD. The CD lets you easily customize any form with your company’s name and specifics.

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