Performance Management Objective Setting p 1 Why MBOs

Performance Management Objective Setting p. 1

Why MBOs? Ø Managers should avoid the « activity trap » , getting so involved in their day to day activities that they forget their main purpose or objective. Performance Management Ø MBOs aim to increase organizational performance by aligning goals and subordinates objectives throughout the organization Ø However, “It’s just another tool. It is not the great cure for management inefficiency…MBO works if you know the objectives, 90% of the time you don’t. ” (Peter Drucker 1993) p. 2

MBO Principles are : Ø Cascading of organizational goals and objectives Performance Management Ø Specific objectives for each member Ø Participative decision making Ø Explicit time period, and Ø Performance evaluation and feedback p. 3

Steps in Management by Objective (MBO) Process Ø Explain goals for department or group in joint meeting Ø Agree on objectives for next planning period with each employee individually Performance Management Ø Review subordinate objectives at target dates Ø Review results for period and establish goals for next period. Ø Begin process again p. 4

Key Elements of an Objective Ø An objective: – Is a specific and measurable description of a specific performance Performance Management – Describes the intended result – the ”how much or what by when” – Is jointly agreed and prioritized between the Manager and Employee. – Should be set at the beginning of the appraisal period. – Should be reviewed regularly to ensure they remain relevant – Provides a framework of measurable performance standards for individuals to work towards within an agreed timescale. p. 5

On the Road to Success. . . Performance Management Set clear SMART expectations Specific Measurable Achievable Result-oriented Time-limited p. 6

SMART Ø Specific Performance Management • Exactly what is my objective? – – A specific outcome has to be accomplished Ensure there is no ambiguity in the objective The outcome is stated in a clearly defined manner Be specific with a single key result – Vague, too many objectives p. 7

SMART Ø Measurable Performance Management • What would a good job look like? – – How will you know he/she have progressed Is there a form of measurement in the objective? If possible, state the objective in a quantifiable manner Action verbs are observable and better communicate the intent of what is to be attempted – e. g. to write, to apply, to install, to select, to assemble, to develop… – – Lack of performance criteria If cannot be measured it will be difficult to assess Avoid statement of objectives in generalities Infinitives to avoid include : – to know, to understand, to believe… p. 8

SMART Ø Attainable Performance Management • Is my objective feasible? – Must be achievable with the given market conditions, time period and resources allocated. – It must be realistic – What barriers stand between you and your objective? – How will each barrier be overcome and within what time frame? – Too easy or too difficult p. 9

SMART Ø Result-oriented & relevant Performance Management • Is my objective meaningful? – The objective should be central to the goals of the organization – The successful completion of the objective should make the difference – How will this objective help the organization move ahead? – Is the objective aligned with the mission of the organization? – Not linked to department priorities – Resources not available p. 10

SMART Ø Time limited Performance Management • Is my objective traceable? – – Enable time to be set Time to be used on objectives that really matters Are the time lines realistic? Will other competing demands cause delay? – No deadlines p. 11

How SMART Is This Objective? Performance Management Financial support: • Administer the financial operations of the unit within budget constraints. Smart version: • For November 1 st, develop and start providing monthly status report of the unit’s financial operations, based on the agreement with the Director. Monitor the gap between the budget and the year-to-date revenues and expenditures, while providing suggestions to improve the unit’s financial management. p. 12

10 Tips for Setting SMART Objectives Ø Sort out the difference between objectives and aims, goals and/or targets before you start. Aims and goals etc relate to your aspirations objectives are your battle-plan. Set as many objectives as you need for success. Performance Management Ø SMART stands for Specific, Measurable, Achievable, Realistic and Timely. Ø Don’t try to use that order. M-A/R-S-T is often the best way to write objectives. Ø Measurable is the most important consideration. You will know that you’re achieved your objective, because here is the evidence. I will know too! Make sure you state how you will record your success. p. 13

10 Tips for Setting SMART Objectives Ø Achievable is linked to measurable. Usually, there’s no point in starting a job you know you can’t finish, or one where you can’t tell if/when you’re finished it. How can I decide if it’s achievable? – – Performance Management you know it’s measurable others have done it successfully (before you, or somewhere else) it’s theoretically possible (i. e. clearly not “not achievable”) you have the necessary resources, or at least a realistic chance of getting them – you’re assessed the limitations. Ø If it’s achievable, it may not be realistic. If it isn’t realistic, it’s not achievable. You need to know: – – – who’s going to do it? do they have (or can they get) the skills to do a good job? where’s the money coming from? who carries the can? Realistic is about human resources/time/money/opportunity. Ø The main reason it’s achievable but not realistic is that it’s not a high priority. Often something else needs to be done first, before you’ll succeed. If so, set up two (or more) objectives in priority order. p. 14

10 Tips for Setting SMART Objectives Ø The devil is in the specific detail. You will know your objective is specific enough if: Performance Management – – – everyone who’s involved knows that it includes them specifically everyone involved can understand it your objective is free from jargon you’re defined all your terms you’re used only appropriate language. Ø Timely means setting deadlines. You must include one, otherwise your objective isn’t measurable. But your deadlines must be realistic, or the task isn’t achievable. T must be M, and R, and S without these your objective can’t be top-priority. Ø It is worth this effort! You’ll know you’re done your job well, and so will others. p. 15

Benefits of Objective Setting Ø It sets specific targets for the employee to achieve which are linked to Business / Development Plan Performance Management Ø It states how the performance of the employee is to be measured to assess progress Ø It provides direction for the employee Ø It allows progress, targets and successes to be monitored and measured by the manager. p. 16

Benefits of Objective Setting Ø It helps build working relationships between the employee & the manager, and improves overall communication Ø Helps to focus on a specific task Performance Management Ø Increases staff motivation Ø Helps to Prioritize Ø Allows reviews to be undertaken Ø Enables success to be measured p. 17

Performance Management What not to do! Don’t set vague objectives Everyone will have trouble interpreting & measuring them Don’t set vague or unrealistic targets This will demotivate the employee – can’t help but not achieve the objectives Don’t impose objectives Everyone must agree to objectives and take ownership for them Don’t make the process to complex or bureaucratic Needs to be easy to use and relevant. Keep it Simple. Don’t forget to refer back to the objectives regularly Otherwise they are irrelevant and a waste of everyone’s time and energy. Employee will potentially be demotivated at wasted effort and lack of interest in their progress. p. 18

Acid test of MBOs Ø Better no MBOs than bad MBOs • Consider what incentives you are giving employees in each objectives. Performance Management – Will the objective point to the employee in the direction of serving customer better? • Ask yourself what signals you are giving with each objectives – Are you directing employees toward what is most important? • Specify the objective, but leave the means of achieving it to the individual. – You don’t want to be a micromanager, do you? p. 19

Leadership & Management Ø Seven Habits model - Steven Covey • Be proactive Control one’s environment, rather than have it control you, as it is often the case Performance Management • Begin with the end in mind Need to be able to see the desired outcome and concentrate on activities which help in achieving that end • Put first things first Managers need to personally manage themselves and implement activities which aim to achieve the desired outcome. • Think win-win This is the most important aspect of interpersonal leadership because most achievements are based on cooperative efforts p. 20

Leadership & Management Ø Seven Habits model - Steven Covey (continued) – Seek first to understand to be understood Developing and maintaining positive relationships through good communication – Synergize Performance Management Creative cooperation. Work as a group to attain a purpose – Sharpen the saw Learning from previous experience and encouraging others to do the same p. 21