Smart Goals : A Performance Multiplier

The CEO had not defined any specific objectives to be achieved during the year.

Nothing was quantified as the corporate goals, nor any measures were laid down to monitor performance.

No Head of the department knew exactly their deliverables for the year & no one was formally reviewing any progress.

Everyone was working hard , but no supervisor in any department was tracking daily/ weekly output from his/ her subordinates. Every one was over busy with routine activities & no one could specify what could not be achieved during the month.

There was an all pervading sense of complaisance amongst the employees that their output was far more than their immediate competitor.

Mandatory Goals for all Managers & Supervisors at all levels

Two goals as under were made mandatory for all employees & the weights allocated to these goals were 20 % each:

Performance Appraisals for all subordinates (direct reports) to be completed by the respective Managers within 15 days of the closing period (i.e, by 15th January) every year. Performance monitoring will be goal - based. (Manager HR to track completion of the Goal setting process for the year 2006 & give status reports to the CEO by 01st February 2006).

All employees will undergo skills/ competency development training for a minimum period of 6 working days during the year 2006. (Training needs for their direct reports to be identified by the respective Managers & communicated to the Manager Training by 31st January. Status report on this to be generated by the Manager Training & discussed with CEO).

Corporate Objectives

All functional Heads / Heads of departments will align their departmental goals to the following objectives of the company for the current year :

Revenue to double every four years: increase during the current year to be 20%.

Current year's profits after tax (PAT) to increase by 2% over the previous year.

Recoverable outstanding to be reduced from existing 42% to 25% of revenue during the current year.

Inventory carrying costs to be cut by 1% during the year.

Employee to Company Turn-over' ratio to improve by 5% over the previous year.

PCMM level 4 certification to be acquired by end of the next year (2007).

Top-down Approach

Allocation of individual goals, which are aligned to the organizational Objectives, shall commence with the setting of goals for the direct reports of the CEO (CEO to complete this action within a week)..

Key Result Areas (KRAs), linked with individual Job Description, to be considered as the base component of an employee's responsibility. KRAs for the department for 2006 will be identified first. For each KRA, specific goals will be allocated by the Managers to each of their subordinates.

Each individual to have 5 to 7 KRAs -based goals which are to be specific, measurable, achievable & trackable. These will be jointly discussed between the Manager & his subordinates (direct reports) at all levels.

Goal Sheets for each employee to be signed off by 31st January 2006. This will include the weights to be allocated to each goal & the linkage with one or more of the six Corporate Objectives discussed above.

All employees shall also identify one self-development goal in consultation with their respective Managers.

Unfinished goals will be transferred by the Manager to another employee who replaces the individual making an exit from the company. This will be kept in view throughout the year as a matter of policy.