Organizational objectives and personal objectives:

‘Objectives’ setting for corporate excellence

Dr K Kuhathasan

The term “objective” implies desired result or situation in the future. It is something expected or hoped for at a point of time in future. According to Ansoff, “Objectives are decision rules which management to guide and measure the organization’s performance.”

A statement of objectives should answer the following questions:

* What is to be achieved?

* How much to be achieved?

* When it is to be achieved?

* By whom it is to be achieved?

Take some time to consider examples of objectives for job roles in your own organization. It is quite likely you initially think of numerical targets such as:

* Improve sales by 20 percent

* Decrease errors by 70 percent

* Achieve an efficiency ratio of 95 percent on production machines

*Halve the number of customer complaints

* Produce 3,000 units in the next month

* Recruit 30 graduate trainees by September

* Reduce the level of unauthorized absence to no more than six days per person in the rolling year.

*Bring down labour turnover to under 6 percent

When realistically set, these numerical objectives are useful and they could apply at various levels. Organizational, departmental or individual. If set for one person this type of target is geared towards the individual contributing to the wider aims of the business. Certainly if it is possible to build a realistic figure into such a target.

This will help both manager and subordinate share the same understanding of what is to be achieved. This will make assessment much easier at a later stage and ensure that there are no awkward discussions about what was originally agreed in terms of the degree of difficulty of standards.

First, it is important when expressing an objective target in quantitative terms to provide some guidance on how the individual might achieve the numerical aspect of the target. If the figure relates to a departmental or organizational goal the target should be broken down to provide more specific guidance.

Second, when setting objective targets for a member of staff it is vital to strike a balance between targets which focus on the departmental or organizational goals and targets which are specifically intended to develop the individual.

Clearly stated objectives, also provide a basis for monitoring progress towards the mission. Without clear objectives, it is difficult to know how it should proceed to achieve its mission. Similarly, without measurable objectives it is difficult for a Corporation to realize just how it is progressing towards its mission.

Selection of the target areas may to based on, for example:

* Linking the job to organizational objectives

* Developing managerial skills.

* Developing inter-personal skills

* Improving ability to perform current tasks

* Preparing for the future

* Improving communications

*Broadening knowledge

* Achieving qualifications

* Generating income, sales, fees, etc.

A typical objective in business planning is to maintain or increase sales volume. Sales volume is a primary source of liquid resources (e.g., cash, accounts receivable and notes receivable), which managers can use to finance the firm’s activities. Factors beyond the control of management also affect sales.

Such external factors include the price of competing and substitute products, competitors’ marketing and sales activities and general economic conditions (expansion, recession, inflation). Although managers cannot control many of the factors that determine sales volume, forecasting remains a valuable managerial tool.

“Smart” Formula

When developing objectives, it is necessary to adopt to the Smart formula. Your objectives must be,

* Specific

* Measurable

* Achievable

* Realistic

* Timely

Here are few examples of objective setting.

* “Achieve a 15 percent return on investment.”

* “Maintain a 40 percent share of the market.”

* “Develop middle managers for executive positions.”

* “Held to ensure that clean air is maintained in all geographical areas in which the firm has plant locations.”

* “Provide working conditions that constantly exceed industrywide safety levels.”

* “Manufacture all products as efficiently as possible”.

* “Maintain and improve employee satisfaction to levels consistent with those in our own and similar industries.”

Plans define expected behaviour. In management terms, expected behaviour are performance standards. For example, the success of a plan by a bank to improve service quality is highly dependent on the expected behaviour of the individuals carrying out the task.

If bank employees are unable to provide customers with quick decisions, a minimum of waiting, personalized caring service, and front-line responsiveness and empathy, then the plan to improve service quality will most definitely fail.

As plans are implemented throughout an organization, the objectives and course of action assigned to each individual and group are the basis for standards, which can be used to assess actual performance. In some instances, the objectives provide the standards: A manager’s performance can be assessed in terms of how close her unit comes to accomplishing its objective. In other instances, the courses of action are the standards: A production worker can be held accountable for doing a job in the prescribed manner.

Through planning, management derives a rational, objective basis for developing performance standards. Without planning, performance standards are likely to be nonrational and subjective.

Setting Goals and targets for individual job holders

Once divisional or departmental goals have been determined, the next step is to translate them into personal objectives for everyone. This process of target setting is the mechanism through which corporate goals are eventually achieved.

Breaking Down Goals

Goals Breakdown is the process of translating operational goals into personal targets at every level and for every person in the unit or department. The following example uses the theme of attendance rate to illustrate how this can be achieved.

Divisional Goal

* Achieve attendance rate of 97 percent by March 31 this year.

Operational Level Goal

* Propose action to reduce absence to the lowest level consistent with research into frequency, duration, date of absence with particular reference to the divisional target of 97 percent attendance.

* Proposal by December 15 this year. Implement actions when agreed, on January 1 next year.

First Line Manager Targets (Objectives)

* Analyze absence by frequency, duration, date, by November 15 this year.

* Review possible methods of reducing absence and calculate attendance rate with reference to the unit target of 97 percent by November 30 this year.

*Carry out return to work interviews on the day of return from absence, from January 1 next year.

* Establish sick reporting on the first morning of absence from January 1 next year.

* Communicate the emphasis on attendance to staff by December 22 this year.

The purpose of targets (Objectives)

You may need to get managers to think about just what the overall purpose of targets is and this is best done in your short workshops set up to introduce performance management. The obvious answer is to achieve the goals, but there are other reasons too. For example:

* To develop individuals and train them.

* To change priorities where circumstances dictate.

* To encourage a continuous improvement of performance.

* To re-establish ‘slipping’ targets.

* To promote innovation.

* To broaden skills.

* To develop new areas of work.

* To achieve things that otherwise get neglected.

* To focus attention on priorities.

* To assist work planning.

* To improve job satisfaction. Why strategic planning fails?

* The Chief Executive dominates the decision-making process.

* The culture, leadership style, products and services of the organization are perceived as being unchangeable.

* Change is introduced for the sake of novelty rather than in response to a new vision or internal or external forces.

* Time cannot be found to fully develop strategies and develop a comprehensive written plan.

* Hidden agendas and company policies are allowed to motivate contributions.

* The people involved are not committed to ensure that the organization does measurably better as a result of planning that it has ever done before.

* The plan is not communicated to all those whose efforts and commitment will be needed to make it work quickly; in simple concrete language.

* Reasonable aspirations of employees, management, shareholders and other stakeholders are ignored.

* The establishment of objectives is rushed and goals are vague.

* The company is so close to going ‘belly up’ that long-term planning is irrelevant to survival.

* The Chief Executive does not believe in the planning process and senior management is not committed.

* The top management team fails to demonstrate its commitment through its consistent behaviour.

Implementing the plan

Implementation is carrying out the steps specified in the objectives. It is where the organization goes from the “think” mode to the “doing” mode.

Typically, the plan describes the steps to be carried out but not how to carry them out, especially what decisions are to be made at each step and what information must be known to make the decision. In a clothing store, implementation calls for purchasing the items of women’s clothing to be sold.

How much? What specific items? What quality and style? Decision-making is a major managerial task that requires, among others, technical and interpersonal skills. In addition, it also calls for the management activities of organization, leading, and controlling.

The implementation stage is where many plans come undone. Many managers think of implementation as being merely “administrative” or “technical” and not worthy of full managerial involvement. Nothing could be further from the truth. A plan means nothing unless it is actually carried out and it contributed to the accomplishment of the organization’s major goals.

Thus, if the above organization creates a plan for “x” but implements poorly-selecting poor quality clothing that the customers reject-then “x” will not accomplish his goals. “X” must ensure that the plan is implemented fully. This requires realistic decision-making at each step of the implementation. Hasty decisions not based on facts are often very costly.

Evaluating the results of the plan

Did we get there? Evaluating the results of planning is essential. A well-done assessment of the outcomes that resulted from the plan provides valuable feedback. The company can learn which goals are possible and which may not be, as well as which steps can be implemented easily and which cannot. Evaluation should, in most cases, be relatively easy and straightforward.

Goals should include information about how much of what should be accomplished, by when and what is to be measured.

Evaluation means that the information specified in the goal statement is gathered and compared against the results of the plan.

Techniques of goals achievement

A good leader insists on positive outcomes for both short-term goals and for the long-term vision. Make sure that team members know what your desired result is and monitor their performance as individuals and as a team in terms of output.

Monitoring progress

It is essential to keep an eye on how plans are progressing so that you can spot problems early on. If all is going well, you may want to raise targets to exploit the opportunity. The key is to make progress measurable. For example, build in key dates and quality targets and compare budgets with actual expenditure. Regular checks should help you and your staff to adjust targets, budgets and so on, while keeping teams on course to achieve the desired outcome. As a leader, you are in a good position to see the overall picture - if several aspects are going bad, drastic action may be needed.

Choosing a monitoring system

Written Reports

Staff provide written summary of actions, results, and figures. Encourages staff to organize their thoughts and review their actions clearly.

Personal Reports

Regular meetings are held with each team member to assess progress. Allows for informal updates and facilitates early airings of potential problems.

Open-Door Policy

Individuals are encouraged to discuss day-to-day problems at any time. Shows strong support, but may prevent team members from using their initiative.

Appraisal

Formal interviews are held to assess performance and set improvement targets. Appraisal produces improved results if practised continuously and informally.

Judging output

Are your staff contributing enough towards the overall desired outcome? If the answer is “Yes”, your leadership has passed the first and most important test. If the reply is “No”, you have two options. Either tell people precisely what you want from them and how you want it achieved, or be clear about the outcome but leave the choice of route and methods to them.

Raising output

Annual appraisals provide an opportunity for a leader to discuss performance and output with staff and to set targets for improvement. However, you will find the process far easier if you practise continuous appraisal, talking to everyone about their jobs. This informal contact helps to keep people focused on desired outcomes, as well as keeping you up to date with their progress.

Provide feedback to ensure that staff feel a sense of direction and achievement; ask for and act on their input; and provide support and training readily when necessary. Continuous involvement should help to boost morale and thus raise output.

Helping people to improve output

It is important to talk to people regularly about their jobs and how you and they think performance could be improved. Remember to include your own role in the discussion.

Always use positive questions, such as the following:

* “Is there anything that could be done better?”

* “Can I be of some help to you to complete the assignment?”

* “Can I do something that would help you to excel?”

* “Is there any way in which we could change the design to achieve better results?”