Do SMART Goals Improve Employee Performance?

There is an abundance of research that suggests that helping employees set specific, difficult goals leads to higher performance. In an article in American Psychologist, Edwin Lock and Gary Latham indicate through their investigations on goal setting and motivation that when managers and employers help employees develop clear, challenging goals, the benefits for the organization are higher than simpler forms of encouragement, such as exhorting employees to do “their best.”

Almost 40 Years of SMART Business

One of the most well-known strategies for goal setting is that of SMART Goals, which was first proposed by George T. Doran in 1981. Doran insisted that businesses needed to understand “the human side of the objective-setting process”: setting goals requires time that many employees and managers may not have, it can create a lot of stress, and it may feel unimportant for employees to set future goals when they feel pressure to produce in the present. Doran intended the SMART system to reduce some of these barriers to goal setting by providing employees and managers with clear instructions on how to efficiently write meaningful objectives.

The main principle of SMART actions plans is that when employees or businesses clearly define their goals, they will be more likely to achieve them.

Although the specific characteristics that the acronym represents can vary between its many theorists, the letters in SMART most often stand for the following:

  • Specific: Goals should clearly describe the desired result.
  • Measurable: Employees and managers should be able to determine whether or not an employee’s goals have been met.
  • Achievable: Goals should be realistic, based on factors which can be influenced or controlled. (For example, a hiring manager aiming for a 100% retention rate might be setting unrealistic goals, as managers cannot control all the factors that contribute to employee retention.)
  • Relevant: Employees should be able to see how goals are relevant to their roles and to the organization’s objectives.
  • Time-based: Goal-setters should choose a specific time frame for achieving targets.

These characteristics are reasonable enough and have been widely used. However, given that the system was created 40 years ago, some management experts wonder if personal and business SMART goals are still relevant in today’s business environment.

Are SMART Goals Actually Smart?

Several theorists have argued against the effectiveness of the SMART action plan, describing the strategy’s limitations, especially where businesses need to encourage innovation.

According to the MIT Sloan Management Review, goals that are specific and measurable are easiest to set in stable environments, as when a business operates in a market with relatively predictable trends. However, in environments that are more volatile, as when markets are rapidly shifting or technology developments occur at a breakneck pace, companies may need to encourage employees to experiment and innovate.

Setting goals that are too specific—a danger of the SMART system—may jeopardize innovation.

The Harvard Business Review (HBR) also questions the SMART system, since SMART action plans ensure the clarity of goals, but provide little assistance in determining whether a goal is actually a good idea: “a goal can easily be SMART without being wise.”

HBR also argues that SMART goal setting may encourage employees to set low goals—that is, goals that are clearly achievable—rather than setting challenging goals that will actually boost performance.

These concerns are valid, but these writers may be glossing over some of the finer points of the SMART action plan. SMART goals can still be relevant for today’s businesses and help them ensure optimal employee performance.

SMART Goals for Employees Can Bolster Company SMART Goals

First of all, employers and managers can think of personal SMART goals as the building blocks of, rather than the replacement of, loftier and fuzzier goals. If an employee wants to become an in-house expert on Computer Numerical Control (CNC) programming, then this nebulous goal of “expertise” could perhaps be broken down into smaller SMART goals, such as completing a course on CNC programming, spending 6 weeks shadowing an expert CNC programmer, etc.

Arguably, if an employee wants to contribute to innovation in the company, this goal of innovation could be similarly broken down—maybe by the employee participating in group brainstorming sessions once per week or setting aside regular time for research and development.

SMART goals can be concrete tasks that will support more challenging, larger objectives.

Finally, the SMART system contains its own answer to the objection that it does not help ensure that a goal is a “good idea.” The “R” in the SMART action plan stands for relevant: if employee goals are tied to organizational objectives, they will be much more likely to be worthwhile. This is one area where managers and coaches or trainers can be very helpful—they can assist employees in formulating and selecting goals that will bolster their satisfaction and empowerment, as well as make strong contributions to the organization’s success.

Resources to Achieve Business Goals

While you may have individual goals, what about business goals? If your business has 2020 goals to expand operations, hire recent graduates, purchase new equipment, etc., why not consider accessing government funding to support your strategic projects?

Mentor Works has recently added many industry-specific webinars to their events page. These webinars dive into available programs and eligibility criteria, and provide advice on how to get started with funding.

Register for upcoming Canadian government funding events!

Canadian Government Funding Events for Small Business

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Sunnie holds a PhD in English from Dalhousie University, and has published her writing in several academic journals, as well as in magazines, newspapers, and blogs. She combines years of experience as a professor in English with practical experience in the private sector as a trainer in writing and analytical thinking.

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