Goals describes in general terms what an organization, a subunit of the organization, a program, a project, a team of employees, an individual employee or a private person would like to achieve.
Searching the internet, you will find many goals related terms:
- Overall goal, long-term goals, organizational goals, strategic goals, departmental goals, operational goals
- Team goals, individual goals, personal goals
- Financial goals, capacity goals, production goals, performance goals
- Etc.
You will also notice that there are differing definitions of these terms.
It is therefore essential that you define clearly your understanding of goal related terms when you are involved in this topic within your organization.
Performance goals describe an output, outcome or impact that
- Somebody within or outside the organization will see as a success or as acceptable. This could be a direct superior, the head of a department, the Chief Executive Officer, a customer, a donor etc.
Performance goals should be expressed in clear, declarative sentences.
If you want to make it clear on which organizational level a performance goal applies, you could use terms like
- Organizational performance goals
- Strategic performance goals
- Departmental performance goals
- Individual performance goals
- Etc.
A performance objective helps to accomplish a performance goal.
You might have a number of performance objectives that relate to one specific goal.
Objectives will specify as far as it is necessary:
- What should be changed, preserved, avoided or done.
- The direction of change.
- Who will benefit from the change, respectively from preserving, avoiding or doing something
- How much something will change.
- Until when something will happen
Approaches to developing goals and objectives
Graphic 1: Basic approaches to developing goals
Top-down approach
The to-down approach starts at senior management level.
1) Senior management (such as the Chief Executive, the founder(s) determine the strategic goals for programs and management functions based on the organizational mission.
2) The heads of programs and management functions determine the goals and objectives for their area of responsibility based on predefined strategic goals. This process may involve a number of management functions (department).
3) Supervisor set performance objectives for employees.
Advantages
The top-down approach links goals and objectives to the organizational mission. This will lead probably to more ambitious goals and objectives than a bottom-up approach.
The organization will be more challenged and moved forward as long as goals and objectives are realistic.
Disadvantages
Ambitious goals and objectives become a problem when the top management is too removed from the reality within the organization and sets unrealistic goals.
There is also a danger that staff is not fully committed to goals and objectives because they had no say in the process.
Bottom-up approach
The bottom-up approach starts at the lower levels of the organization.
How does it work?
Employees set goals and objectives for themselves that result in goals and objectives for programs and management functions.
Advantage:
This approach will most likely lead to more realistic goals and objectives than through the top-down approach as people involved have a good insight in what is possible under current conditions.
Staff will be more committed because they strive for goals and objectives that they determined themselves.
Disadvantage:
There is the danger that goals and objectives are too conservative because the staff involved wants to minimize the risk of failure.
Furthermore, strategic goals may not be aligned to the organization´s mission when they are the result of a bottom-up process.
A compromise: The participatory approach
The participatory approach involves staff from at least two different hierarchical levels in different stages of the goal setting process.
It is a mixture of top-down and bottom-up approaches.
How does it work?
1) Senior management, leaders of programs and of management functions determine together the mission and strategic goals.
2) The leaders of a program or a management function and their staff determine goals and objectives on program level and level of management functions.
3) Individual employees propose what they will contribute to the goals and objectives of programs and management functions and come to an agreement with their superiors.
Advantages/Disadvantages
This approach promises to combine the advantages of the other two approaches without suffering from their negative aspects.
Developing organizational performance goals
Performance goals on organizational level are directly linked to long-term goals and through them to the overall goal of an organization (graphic 2)
They include information about what is considered a success or requirements that have to be met.
These performance criteria can take many forms:
- A comparison to other organizations (e.g. among the top 3, leader, 1st quartile), practices (good practices or practices used by leaders in the field) or people (e.g. like a native speaker).
- An absolute figure (e.g. output of at least 60 solar panels per day).
- A % change (e.g. 10 % reduction of unemployment).
- A word like “maintain” or “avoid” or “all” (e.g. avoiding any interruption of energy supply, all students pass their examinations).
Graphic 2: From overall goals to organizational performance goals
Examples of organizational performance goals
- “We want to be the leading supplier of solar panels in our province”.
- “All participants of our educational program will pass the entrance examination to Higher Education”.
- “Our university will be in the first quartile of all national universities”.
- “All houses in the community will have access to clean water”.
- “At least 50 % of all income will come from sales of products and services”
- “Staff involved in financial management will have at least 3 years of working experience”.
- “Our service will be available 24 hours a day and 365 days a year”
- “The organization strives to meet all requirements of the WANGO Code of Ethics and Conduct”.
Guide to further reading (available online)
C.McNamara, Strategic Planning (in nonprofit or for-profit organizations), at: http://managementhelp.org/plan_dec/str_plan/str_plan.htm
National Minority Aids Council, Strategic planning, p.61, at: http://www.nmac.org/index/oes-english
USAID, Fundamentals of NGO Financial Sustainability, at: http://www.abtassociates.com/reports/NGOSustainability.pdf
Reference for business, Goals and goals setting, at: http://www.referenceforbusiness.com/management/Ex-Gov/Goals-and-Goal-Setting.html