Why are Goals and Objectives Important?

You see it, hear it, read it, and often repeat it, “…the economy is doing down the drain, … competition is fiercer than ever and cutting into our profits, … lay offs are eminent, … you need to do more with less, and blah, blah, blah!”

So what are you doing to ensure your organization’s survival! Are you just complaining about the situation you got yourself into or have you decided to take a logical rational approach to improve your survival?

Why previous post about productivity resulted a flurry of emails to me asking me, “why I felt understanding productivity and goals and objectives are so important?” You have to be kidding me.

A frequently referred to set of statistics from Kaplan and Norton state;

  1. 9 of 10 companies fail to execute strategy
  2. Only 25% of managers have incentives linked to strategy
  3. Only 5% of the work force understand the strategy
  4. 85% of executive teams spend less than one hour/ month discussing strategy
  5. 60% of organization don’t link budgets to strategy

If these facts are remotely representative of most organizations, what the hell is everyone in your organization working on? You don’t need more resources, you just need to have them stop working on unimportant, non strategic activities and start working on the tasks that support your strategy.

According to Barney and Griffin, organizational goals serve four basic functions;

  1. they provide guidance and direction,
  2. facilitate planning,
  3. motivate and inspire employees,
  4. and help organizations evaluate and control performance.

Organizational goals inform employees where the organization is going and how it plans to get there. When employees need to make difficult decisions, they can refer to the organization’s goals for guidance.

Goals promote planning to determine how goals will be achieved. Employees often set goals in order to satisfy a need; thus, goals can be motivational and increase performance.

Evaluation and control allows an organization to compare its actual performance to its goals and then make any necessary adjustments.

How many of you honestly know your organization’s goals and objectives? How many of you know where to find the organization’s goals and objectives? What criteria are you using to ensure you’re making the right decision and subsequently, optimally allocating your scarce resources?

For organizations, managers, and employees to be successful more emphasis needs to be placed on making sure every employee and every manager knows what he or she needs to accomplish in the present and future. When employees understand needs to be done to succeed, it’s much easier for them to contribute. It’s also tremendously easier for managers to do their jobs, to improve productivity, and to manage proactively, rather than waste their time stamping out small fires after the fact. Clear purpose helps everyone succeed and, bottom line, that’s what we all want.

Organizations need to coordinate the work of individual employees and work units, ensuring that everyone is pulling in the same direction. Individual performance goals provide the fabric that allows this kind of coordination to occur.

According to Locke and Latham, goals affect individual performance through four mechanisms;

  1. goals direct action and effort toward goal-related activities and away from unrelated activities.
  2. goals energize employees. Challenging goals lead to higher employee effort than easy goals.
  3. goals affect persistence. Employees exert more effort to achieve high goals.
  4. goals motivate employees to use their existing knowledge to attain a goal or to acquire the knowledge needed to do so.

Setting individual performance goals provides a framework for translating the goals of the organization into smaller chunks that are then assigned or delegated to individual employees. This needs to be done for an organization achieve their overall goals to the extent that each employee does his or her part in completing the right job tasks in effective ways.

When an employee knows what needs to accomplished and what is expected, it’s a lot easier for that employee to work without constant supervision. Also, by helping employees understand how their individual work contributes to the overall goals of the organization, we enable them to make their own decisions about how to spend their work time so that their work is consistent with the priorities of the organization. The consequences are employees know what they must do, how well they must do it, and why they are doing it. Resulting in a team that is knowledgeable and therefore empowered, to do the right things with much less supervision/oversight. The teams can make decisions relevant to their work without having to consult the manager on every little question.

Clear goals and objectives allow employees to monitor their own progress all year ’round and correct their efforts as necessary. If employees know what they need to accomplish, they can look at their results as they go and identify barriers to achieving those goals.

Believe it or not, most employees want and need to know four things about their work so they can contribute and feel comfortable about where they are in the organization:

· What do I need to accomplish?

· Why am I doing what I’m doing?

· How well must I do it?

· How am I doing?

If you want to know how to get started, give me a buzz.

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