Business Bites: Setting goals for your business

Nick Walsh FBDO
ABDO sector skills development officer

“What you get by achieving your goals is not as important as what you become by achieving your goals,” Henry David Thoreau

The Chartered Institute of Personnel and Development technical report, ‘Rapid evidence assessment of the research literature on the effect of goal setting on workplace performance’, describes goal setting as: “…one of the most powerful and evidence-based interventions for enhancing performance, if moderating factors such as goal attribute, type of task, organisational context and employee characteristics are taken into account“.

The report suggests that: “the theory of goal setting states that there is a positive, linear relationship between a challenging, specific goal and task performance. Thus, the theory makes it explicit that setting challenging, specific goals leads to higher performance than urging people to do their best, and that this positive effect is present in both self-set and assigned goals as well as individual and group goals.

“The theory, confirmed by hundreds of high quality empirical studies, can therefore be regarded as one of the most ‘evidence-based’ interventions in organisation and people management.

“In addition, the evidence clearly demonstrates that the effect of goal setting can be enhanced when it is combined with some form of performance feedback or progress monitoring (in particular when the outcomes are reported or somehow made public), and when people specify when, where and how they will achieve their goals“.

Applying the principles of success

Probably the best-known theory on goal setting comes from Edwin Locke and Gary Latham in their 1990 book, A Theory of Goal Setting and Task Performance (Englewood Cliffs, NJ: Prentice Hall).

In their book, Locke and Latham identify five principles that can help lead to success:

1. Setting clear goals
2. Setting challenging goals
3. Securing team commitment
4. Gaining feedback
5. Considering task complexity

By understanding goal-setting theory, you can apply Locke and Latham’s principles to your own goals. Their research confirms the usefulness of SMART goal setting, and their theory continues to influence the way that we measure performance today.

Let’s see how these principles are explained in the articles ‘Locke’s goal setting theory’ by MindTools, and ‘What is Locke’s goal setting theory of motivation’ from

1. Setting clear goals
• Set clear goals that use specific and measurable standards. For example, ‘reduce job turnover by 15 per cent’
• Write down the metrics that you will use to measure your team members’ success. Be as specific as possible, and make sure that everyone on your team understands how you will measure success

2. Setting challenging goals
• Use the Inverted-U model (also known as the Yerkes-Dodson Law) to find the best balance between pressure and performance when you set goals
• Think about how you will reward team members when they achieve challenging goals
• If possible, create some friendly competition between team members or departments. Competition can encourage people to work harder

3. Securing team commitment
• To be effective, your team must understand and agree to the goals – team members are more likely to ‘buy into’ a goal if they have been involved in setting it
• This doesn’t mean that you have to negotiate every goal with your team members and secure their approval. They are likely to commit to it as long as they believe that the goal is achievable, it is consistent with the company’s ambitions, and the person assigning it is credible

4. Gaining feedback
• In addition to selecting the right goals, you should also listen to feedback, so that you can gauge how well you and your team are progressing
• Feedback gives you the opportunity to clarify people’s expectations and adjust the difficulty of their goals
• Learn how to give your team members feedback that is objective, useful and positive
• Create a timetable to schedule regular feedback for your team
• Use the Stop – Continue – Start model for quick feedback sessions

5. Considering task complexity
• Take special care to ensure that work does not become too overwhelming when goals or assignments are highly complex
• Your team members might need additional training before they work toward their goal. Give everyone a training needs analysis (TNA) to identify any knowledge or skills gaps
• If you notice that any team members are overwhelmed, consider putting them into a coaching or mentoring relationship with a more experienced colleague