Running a successful business requires the owners to make impactful decisions daily. Decisions involve setting clear goals. When companies are not clear on goals that provide a point of focus for the entire organization, businesses fail.
With a centered goal, organizations prioritize and set the direction for employees to tread towards achieving them. When goals are not transparent or mapped out well, the organization's productivity and competitiveness rank low. An unclear project goal leads to more significant damage for organizations, and setting an effective goal management system should be a priority for every organization.
In 'The Management of Organizations', by Jay B. Barney and Ricky W. Griffin, organizational goals serve four essential functions:
George T. Doran worked for the Washington Power Company as a former director of Corporate Planning and was the first to use the acronym S.M.A.R.T in November 1981.
In his paper 'There's a S.M.A.R.T. way to write management's goals and objectives,' he defined S.M.A.R.T. goals with five elements:
Over time, the acronym's words have evolved depending on the need but have continued to be a simple framework for organizations to follow.
Why is Goal Setting Important?
Progressive Organizations focus on setting objectives and goals that are created jointly by employees and managers. Goals must evolve as an organization progresses, ensuring that achieving a goal does not result in a stopping point. Some of the important reasons for goal setting are:
Goal Setting in the bigger picture aids effective performance management of an entire organization. It's a powerful tool that can help challenge and motivate employees. Goal setting helps establish objectives and track their progress for better performance management.
Industries that rely on Goal setting for Performance Management are:
The fastest-growing workforce in the world is the healthcare industry. It employs doctors, nurses, interns, medical residents, support staff, administrative executives, and more. A workforce-intensive like the healthcare industry can face challenges in decision making and can affect an institution's performance on the whole. Some of the challenges that the healthcare industry faces are: limited advancement opportunities, lack of standard procedures to measure the performance of an employee, and the absence of measurable goals. Defined goal setting can tackle these challenges and can hold the medical staff accountable for their actions.
2. Financial Industry
The financial Industry and Banking Sector have adopted automation and a digital work environment to make the process more intuitive and transparent for clients and employees.
Automation has widely impacted H.R. as it has improved the onboarding process, monitored performance, track goals, and frequent performance reviews to improve the business process and make it smooth sailing.
Goal Setting in the financial industry focuses on maximizing employee engagement and play an active role in managing employee performance and growth.
3. Information Technology
A successful organization must attract and retain talented employees in a competitive market. This can be achieved when an effective system is in place that helps hire them, find the proper role, align their goals to that of the organization and take an active interest in their performance. Performance management includes joint goal setting, continuous progress checks, effective communication, feedback, and measurement for success and performance reviews. The I.T. industry focuses on goal setting to ensure that suitable projects are carried out at the right time. It also focuses on the subsystems within an organization working collaboratively to accomplish progressive results.
4. Legal Industry
In the legal industry, attorneys work with many partners and can thus be very tricky to set goals. Setting measurable goals is a priority as Peter Drucker famously says, "What gets measure gets managed." With goal setting in the Legal Industry, short-term and long-term goals need to be prioritized. Setting the right goals can determine a general direction for the employees and create a path to success for any firm that effectively manages and measures goal outputs.