This item continues our series on so-called “classic business rules” that can become corrupted in practice by poor leadership.
As a leader you’ve been coached to make sure you “set stretch objectives for your people.”
This is good enough advice if you are careful to make the objectives realistic. Too often, however, the stretch goals are not carefully considered and the employee’s reaction is similar to that cartoon where the little guy is belly laughing while saying, “You want it WHEN?” If employees see the stretch objective as grossly unrealistic, they may reject the notion of doing the best they can because their failure is pre-determined. Instead they may do the minimum required, citing the unrealistic goal as a justification for mediocrity.
An employee needs to “own” a stretch goal and it’s not feasible to own something completely out of reach.
There’s a related issue regarding how individual bonuses are calculated for meeting individual objectives (as opposed to group or department goals). If a significant portion of someone’s bonus opportunity is tied to achievement of an INDIVIDUAL objective, out of balance with overall company goals, then the person pursuing the individual goal can harm overall results by paying obsessive attention to how the individual bonus will be affected. For the good of the marketing campaign, the marketing manager should take action A, but he’ll take B instead because B will maximize the personal component of his bonus. The company’s overall marketing campaign is secondary. If anyone objects the person will readily say “I am going to meet the goals MY BOSS TOLD ME I HAD TO MEET.” Happens all the time.
Leaders tasked with setting objectives for the financial bonuses of others simply cannot afford to be cavalier in setting the numbers or in defining individual targets out of step with broader company goals. Bad goals quickly demotivate entire departments and poorly-designed individual goals provide incentive for selfish behavior.
Coming soon in this series: What does it mean to tell everyone to “develop a sense of urgency”?