Ask your employees to focus on razor-thin, challenging targets, and they might fail or do something unethical. Instead, use this 10-point checklist when setting performance goals for others:
1. Are the goals too specific? In the race to meet a specific goal, Ford created a car that had serious flaws—the Pinto. Be sure your goals include all critical components for success (both quantity and quality).
2. Are they too challenging? Offer training if skills are lacking. And avoid harsh punishment for failure to reach a goal.
3. Who sets goals? People who set their own goals are more committed.
4. Is the time horizon appropriate or does it foster short-termism? Consider eliminating quarterly reports, as Coca-Cola did.
5. Have you articulated acceptable levels of risk?
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6. How might the goals promote corrupt behavior? Example: Sears set challenging sales goals of $147 per hour for its auto repair staff. That prompted staff to overcharge for work. Set up multiple safeguards to keep employees from rationalizing unethical behavior.
7. Can they be tailored to individual abilities? Strive to set goals that use common standards and account for individual variation.
8. How will they affect culture? If cooperation is essential, consider setting team-based goals.
9. Do affected staff have an intrinsic motivation?
10. Consider whether learning would be a better target than performance?
— Adapted from “Goals Gone Wild,” Lisa D. Ordonez, Maurice E. Schweitzer, Adam D. Galinsky, Max H. Bazerman; Harvard Business School.
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- Improve performance by helping employees identify and overcome deficiencies and develop new skills and capabilities.
- Open lines of communication by providing a forum for dialogue between managers and subordinates. Managers can let employees know what’s expected of them. Employees in turn can express their feelings and discuss problems and training needs.
- Develop employee potential by identifying emerging talents, pinpointing problems, focusing on strengths as well as weaknesses.
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