Have you just spent the last two weeks working through your goal-setting for 2013?

If you’re like most of us, January is a time when you think about what you want to achieve during the year.  And in our professional lives we’re knee-deep in business plans, budgets and annual goal-setting.

Few management tasks consume more management time than goal-setting.  In conventional thinking, the way to deliver results is to set a goal and then create a plan to work towards it.  Defining specific, measurable, achievable, realistic, time bound (SMART) goals has been a mantra for generations of managers and HR people.

But, contrary to popular opinion, quality expert W. Edwards Deming noted how, in most organisations, goals and standards limit performance rather than improve it.  That’s not because goal-setting isn’t a valuable tool for managing performance.  It’s because managers don’t do goal-setting effectively.

Goal-Setting Mistakes

There are 3 big mistakes that managers make when using goals to manage performance:

1. Setting “challenging” goals. 

The most common goal-setting mistake is to set “challenging” or “stretch” goals.  Goals that are hard to achieve result in few opportunities for positive reinforcement and reward.  Although it may seem counter-intuitive, the best approach to goal setting is to set goals that are easy to achieve.  If the goal is easy to achieve, it increases the likelihood of success.  If the employee reaches the goal and celebrates success, they will be motivated to do even more next time.

2. Setting goals for the year. 

The other mistake managers make is to use too long a time frame.  Business planning and budget setting happens yearly so managers set annual goals for their employees.  But they will make much more progress if they use shorter time frames (days, weeks) and smaller goals than they will if they set big goals on longer time frames (month, quarter, year).

3. Setting the same goals for everyone. 

The third mistake managers make is to set the same goal for everyone.  As Vince Lombardi once said “Nothing is more unequal than the equal treatment of unequals”.  For example if we ask for 10% increase in productivity from everybody, it will be too difficult for the lowest performers and too easy for the best performers.

A more effective approach is to set attainable goals based on individual performance.  For each person you should set the first goal slightly ahead of their current performance, say a 1% improvement.  If you use daily or weekly goals, it won’t take long for a person who you regularly praise and reward for each of their I% improvements to reach the 10% target.  And when he or she gets there, you will have an engaged, motivated individual ready to progress even higher.  Compare that approach to one where you tell the entire team that everyone needs to improve by 10% and then wait until they get there before you reward or celebrate any achievement.  You might wait a long time.

Goal-setting does have the potential to improve performance if used in the correct way and that is to recognise that goals provide an opportunity to positively reinforce those behaviours and actions that deliver results.

The fastest way to change individual behaviour and therefore improve performance is to set small individual goals that employees can achieve in a short time frame, then positively reinforce progress and celebrate achievement.

So please look back at the goals you’ve set for the coming year.  What did you find?  Are your goals small, achievable and rewarding?  If not, perhaps there’s still some work to do to make sure you’re setting yourself and others up for success.