This article first appeared in the October, 2003 edition of the Jacksonville Business Journal
Setting goals is part of organizational life and a powerful way to keep employees aligned and clear about expectations. But how tough should the goals be? How high should you set the bar?
How Challenging Should Goals Be?
Some leaders like to set goals at a low to moderate level, based on the concept that they want everyone to be successful. They believe that success increases employee motivation and satisfaction. A second approach is to set the goals fairly high, expecting that a good portion of the employees will achieve them, but every one has to work pretty hard to be successful. The third approach is to make the goals so high that only the very best performers might attain them.but not too often. This is based on the premise that if you set the bar really high then everyone will work their hardest to go as far as they can.
Which approach is right? The first approach - set the bar low enough for just about everyone to be successful - creates an organization that delivers consistently mediocre performance. If the expectations are low, everyone will lower their performance to the match it. People are not motivated if there is no challenge in their achievement.
The third approach - make the goals just about impossible - also has a negative effect, but for a different reason. If people are given goals that they don't believe are achievable, they won't bother to try at all. So the result is the same - under performance for both the individual and the organization.
The hallmark for successful goal is setting is captured by the "challenging yet achievable" phrase. Goals should be challenging and require a stretch - but employees should be able to see the possibility of achieving them based on their efforts and performance.
Stretch Goals for Top Performers
But what about your highest performers? How do you stimulate and challenge them? You could set different goals for them, but that often leads to the complaint that they are not being treated fairly. You could give them the same goals as everyone else, but achieving them would only represent mediocre performance on their part.
An approach that is especially effective with high performers is the use of stretch goals. Set baseline goals with your high performers that are challenging yet within the normal range of performance. And then work with them to set stretch goals that really demand the best they have to give. There is no penalty for not achieving stretch goals, as long as the baseline goals are achieved. But there must be some incentive, reward or special recognition for achieving stretch goals. It does not have to be a financial bonus. A special vacation, a prize, a promotion, greater responsibility, are all examples of the kinds of incentives and recognition that can come with the achievement of stretch goals.
Guidelines for Stretch Goals
For stretch goals to be effective, they should be developed with the employee. Stretch goals that are simply handed down or assigned will not necessarily inspire higher levels of performance. But taking the time to sit down with an employee, agree on the core goals for the job, and then developing a set of specific stretch goals over a defined period of time that really challenge performance can have an electrifying effect. Especially for your best performers. Stretch goals do not only have to be set at the individual level. They can be very powerful with teams as well.
When does a stretch goal become a stress goal? When have you pushed the envelope beyond reasonability? High performers typically don't like to reject a challenge. They might sign on for a goal or target that is so demanding (or impossible) that they work themselves, others and the organization into a frenzy trying to chase the impossible dream. The unintended result can be burnout for the individual and excessive pressure on the organization. Set the boundaries within a realistic probability of success. Then support high performance and be sure to recognize and reward it when you get it.
Although stretch goals have the most powerful impact with top performers, they can work with employees at all levels. Some companies use them with everyone. Other companies use them with selected individuals. Still other organizations make them optional. They set goals for everyone and then invite employees to work with their leaders to develop stretch goals if they would like to have them. This invites the "cream to rise to the top". And it usually does.
You don't get high performance if you don't ask for it. And you don't necessarily get it if you simply demand it. High performance comes when leaders set a personal example through their own performance and then inspire others to high performance by participating in developing challenging expectations with them. Goals are an essential part of the process. Stretch goals add jet fuel to the mix.