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Performance Review and Individual Development Enabler

Goal Setting Guidelines

INDEX
1. Goal Setting Context & Guidelines

2. Goal Setting Templates

3. Sample Goals
Goal Setting:
Why is goal setting important?
Without dreams and goals, there is no living,
only merely existing, and that is not why we are
here. - Mark Twain

If you do not know where you are going, every

road will get you nowhere.
- Henry Kissinger

Employees are more likely to achieve goals if they are set and written down
- Harvard Study
Goal Setting

• Why?
To have a clear understanding of what is expected during the year
• Who?
Appraiser and Appraisee
• What?
Agree on clearly defined goals in line with key dimensions of the job

• Setting of Goals is central to the entire process of Performance Management

• Goals are documented Performance Expectations - clearly defined priorities that

describe specific results that need to be achieved for the business or function

• Goals are prioritized by assigning appropriate weightage

• Goals are S.M.A.R.T

• Effective Goals add measurable value and are action-and-result oriented

Creating Goals & Measures – Using SMART
Framework
Example
Specific
S Focused on a key outcome - clear and concise statement ✓ % Achievement of the targets
of what will be accomplished
✓ % of vacancies filled within
Measurable:
M Concrete, observable statement of what will be different scheduled timelines
once the objective is achieved
X Satisfactory resolution of
Attainable: customer complaints
A Feasible in terms of time, costs, and the challenge the
objective presents
X Liaison with the Corporate
Relevant: Procurement Team
R Important to your role and function along with
organizations objectives
✓ % deviation from the plan to
conduct ‘Train the Trainer’
T Time Bound: Workshops
Achievable within a certain time period

Guidelines to keep in mind while identifying Goals

►Unplanned work should not be included while framing Goals

►Goals should be outcome oriented, quantifiable and measurable
►Language of Goal should lead to an end outcome or should result into something tangible that can be measured
►Goals should be within the control of the Role Holder to achieve
SMART Framework
SMART OBJECTIVES
SPECIFIC

Clear & concise statement of what will be accomplished

• The clearer you can be about what your objective and measure is, the better
chance you will have of achieving it,
• Lower the hierarchy level in the organization, more specific the objective and
measure becomes

Enhance Customer
Satisfaction

Enhance Customer Enhance Customer Satisfaction

Satisfaction through speedy through educating customer on
and accurate response risk/return
SMART Framework
SMART OBJECTIVES
MEASUREABLE

Concrete observable statements of what will be different once the objective is

achieved
• Describe how results will be quantified or how observable events and
behaviors will indicate achievement of the objective
All objectives should have measurable results that can either be Quantified or Verified
Verified: Two individuals could agree on
Quantified
whether or not the measure was reached

• Productivity: Number of new products to • Submission of monthly report by… day

the Market of the month
• Cost: Cost Savings • Preparing customer satisfaction survey
• Time: Overtime and getting approval from the
• Quality: - Customer Satisfaction Rating manager
- Number of Complaints • Use action verbs such as “execute,”
- Percent of tasks completed to “acquire,” “demonstrate,” “create,”
standards and “sell”
• Agree on event - “How will we know”
SMART Framework
SMART OBJECTIVES
ATTAINABLE

Feasible in terms of time, costs and the challenge the objective presents:

- To determine whether or not an objective is attainable, ask:

• Do you have the time, material, and people resources that you will need
to achieve this objective? If not, can you obtain these resources? Can
you adjust the time frame?

• Do you have the information/ skills and knowledge you will need to
achieve this objective? If not, can you get this information/develop skills
and knowledge?
SMART Framework
SMART OBJECTIVES
RELEVANT

Tied specifically to organizational objectives

To evaluate an objective’s relevance, ask:

- Does the objective relate to the role and responsibilities of your
function?
- If you achieve the objective and measure, how will it benefit your
function? You? Your customers? The organization?

For Eg. Improve customer satisfaction by 10% through speedy and accurate
information; which will reduce churn (customer turnover) thereby reducing
cost of customer acquisition
Relevant
SMART Framework
SMART OBJECTIVES

TIME LIMITED

Includes a specific timetable for achievement

– SMART Objectives and Targets are attainable within the performance

period specified

Improve Customer Satisfaction by 10% through speedy and accurate

information; which will reduce churn (customer turnover) by 10% by 2022

Timeline
Develop the set of performance metrics to monitor
progress

➢ Ensure measures are linked to business strategy

➢ Ensure measures are relevant

➢ Ensure measures are easily understood and have a common

definition across the organization

➢ Ensure as far as possible that measures are quantitative

➢ Ensure that data against measures identified is accessible

➢ Ensure a good mix of lag and lead indicators

Metrics should include lag as well as lead indicators

Lag Indicators Lead Indicators

• Measures focussing on results at the • Measures the drive or lead

end of a time period, normally performance, normally measuring
characterising historical intermediate processes and
performance activities
• Normally easy to identify and • Predictive in nature and allow the
capture organisation to make adjustment
• Historical in nature and do not based on results
reflect current activities; lack of • May prove difficult to identify and
predictive power capture

Examples: Examples
▪ Market Share ▪ Hours spent with customers
▪ Sales ▪ Proposal written
▪ Empanelment of customers ▪ Absenteeism
▪ Quality ▪ Response time
Goal Setting Guidelines

➢ 4-8 Goals are to be identified by each individual

➢ Goals for the Appraisee to be identified based on the goals of the Reporting
Manager and role of the employee, involving joint consultation between the
Appraisee and his/ her Reporting Manager.

➢ Joint consultation helps ensure that the actual job being done by the
Appraisee is sufficiently covered for evaluation during Year-end review

➢ All goals should have weightage ranging between 5% and 30%. The sum total
of weightages for all goals must add up to 100%

➢ Goals to have right mix of quantitative and qualitative performance metrics

Goal Setting Template

Sr. No. Goal Goal Performance Target Weightage (%)

Definition Metrics (KPI)
1
2
3
Goals - Goals are your key priority areas for the year. It should be identified basis the key dimensions of your Job and
in line with the goals of your Reporting Manager e.g. Increase Revenue, Increase Profitability, Customer Satisfaction
etc.

Goal Definition - Defines a goal in a specific, measurable, action oriented, realistic and time-bound (SMART) manner
as defined in goal setting guidelines. e.g. Reduce customer turnover by 10% by Q2 2022; Improve Customer
Satisfaction by 10% through speedy and accurate information

Performance Metrics - Key parameter/metric defined to track progress on the goals identified. It is important to
establish appropriate tracking mechanism to establish objectivity towards performance measurement at the end of
the year i.e. Market Share, Sales, CSAT Score, Cost of poor quality, Adherence to project plan etc.

Target - Targets define the desired outcome from the goal. It should be set with sufficient amount of stretch built in,
while at the same time keeping in mind any constraints or external factor beyond your control.

Weightage - Weightages defines the relevance/criticality of the Goal and the effort required to accomplish the same.
The sum total of weightages for all goals must add up to 100%. As a guideline, all goals should have weightage
ranging between 5% and 30%.
Balanced Score Card Approach: can be used for
identifying goals
Financial Goals can be divided
How do we look into four
against the financial perspectives to gain
objectives of our
owners?
a wholesome picture
of targets

Customer Mission Internal Process

How do we look to Values What must we excel at for
the customers that Vision our customers?
we want to attract?

Learning & Growth

How do we get better at
improving?

The Balanced Scorecard is a way of using financial and non-financial measures to

provide a well-rounded perspective on past performances as well as an indication of
future performance
Linkage of Strategic Objectives – establishing Causality

Financial & Business Customer

“And we will keep/get “Then the customers
more business….” will be delighted…”

Internal Processes Learning & Development

“Doing the right “If we have the right skills
things” & technology”
Effective Cascade

• While choosing Goals, it is imperative to ensure that there is effective cascading of

Organizational priorities to Individual Goals
• Ensure that Individual level Goals are effectively cascaded down from Organization
objectives & Department level measures as per the levels decided by individual
functions
• Employees who would not be covered as part of the mandatory goal setting
exercise, rating at the year end would be basis key contributions

Organisation’s Objectives

Goals of MD

Goals of Business Head

Goals of Reporting Managers

Individual Goals
Sample Goals
Sample Goals 1
Sr. No. Goal Goal Definition Performance Target Weight
Metrics (KPI) age (%)
1. Return on capital Manage investments to ensure Return on 13% 20%
defined return on capital throughout capital
the year employed
2. Cost Optimization Leverage relationship with investors Weighted 8% 15%
to get capital at effective rates average cost of
capital
3. Operational Efficiency Consolidate and finalize financial Annual report 15th 15%
statements and annual reports as per on time May
timelines
4. Process Standardization Standardize critical internal processes Adherence to 100% 20%
i.e. costing, budgeting, annual project plan
business planning to improve
efficiency within defined timelines
5. Risk, Compliance & Manage, Risk, Compliance & Number of 0 15%
Governance Governance through internal audits repeat NCs
for FY 2022-23
6. Employee Ensure development of employees by Adherence to 100% 15%
Development completing their performance timelines of
appraisals and development planning on
PMS
time
process for the
department
Sample Goals
Sample Goals 2
Sr. No. Goal Goal Definition Performance Target Weigh
Metrics (KPI) tage
(%)
1. Cost Optimization Ensure adherence to organizational Adherence to 100% 15%
budget by presenting appropriate organization
reports within defined timelines budget
2. Operational Efficiency Ensure timely evaluation and Budgeting on 15th 15%
validation of annual business time March
planning, budget preparation and
communication
3. Operational Efficiency Prepare product costing and Annual report Qtrly/A 20%
reconcile with PL every month on time nnually
4. Operational Efficiency Complete cost audit and reconcile Annual report Qtrly/A 15%
with Financial Statements within on time nnually
defined timelines
5. Process Invoice Processing Adherence to 100% 20%
Standardization laid SOP
6. Risk, Compliance & Manage, Risk, Compliance & Number of 0 15%
Governance Governance through audits for FY repeat NCs
2022-23
Thank You!