Chapter 8 Setting Goals

8- 2 Management 1e 8- 2 Management 1e 8- 2 Management 1e 8- 2 Management 1e Learning Objectives  Describe the primary goals of an organization  Explain the principles and different types of goal plans in an organization  Outline different types of goals and the characteristics that make them effective  Illustrate how managers secure team-level commitment to goals  Construct action plans consistent with goals to achieve individual-level performance  Describe how managers track progress of goal plans through performance dashboards

8- 3 Management 1e 8- 3 Management 1e 8- 3 Management 1e Setting Goals that Make a Difference (p. 202)  Goals must be set within a strategic framework consisting of mission, vision, and values  Goals are important because they: Give direction Provide a sense of purpose and achievement Reinforce our beliefs Enable reaching our full potential Boost our self-esteem

8- 4 Management 1e 8- 4 Management 1e 8- 4 Management 1e Setting Goals that Make a Difference (cont.)  Smart goals (p. 204) Specific – clearly defined goals help focus on the task Measurable – inform about the extent of progress Achievable – realistic and attainable Relevant – consistent with the organization’s mission, vision, and values Time-bound – provides a target for completion

8- 5 Management 1e 8- 5 Management 1e 8- 5 Management 1e Setting Goals that Make a Difference (cont.)  When goals go wrong they (p. 207): Involve excessive risk-taking Increase stress Create feelings of failure Become a ceiling for performance Ignore non-goal areas Promote short-range thinking Promote dishonesty/cheating

8- 6 Management 1e 8- 6 Management 1e 8- 6 Management 1e Goal Plans (p. 209)  Principles of goal setting Clarity – goals must be clear, specific, unambiguous, measurable, and set within a time frame Challenge – people are motivated by difficult but attainable goals Commitment – ‘buy in’ more likely when:  The task and its outcomes are perceived to be important  Goal achievement is perceived to be possible (p. 210) Feedback – clarifies expectations, assesses and adjusts (if necessary) process, and recognizes good performance Task complexity – goals must be appropriate for complex tasks  Appropriate resources (e.g., time and training) must be provided

8- 7 Management 1e 8- 7 Management 1e 8- 7 Management 1e Goal Plan Types and Components (p. 211)  Business plan Interprets an organizational strategy into a market- or community-based opportunity for division or departmental managers Budget – quantitative part of a plan that allocates available financial resources

8- 8 Management 1e 8- 8 Management 1e 8- 8 Management 1e Goal Plan Types and Components (cont.)  Standing plans (p. 211) Designed for repeated use in response to commonly occurring events Policy – describes how an organization and its members should respond to recurring or anticipated situations Procedures – provides the specific steps to be taken as part of a recurring process or in response to a recurring situation Rules and regulations – formal descriptions of how specific actions are to be carried out

8- 9 Management 1e 8- 9 Management 1e 8- 9 Management 1e Goal Plan Types and Components (cont.)  Goal plans are essential ways of committing departments, resources, and individuals to a future goal (p. 212)  Directional plan General, flexible plan that provides guidelines for an organization’s long-term goals  Tactical plan Covers an intermediate time scale and enacts divisional strategies by allocating people and resources  Operational plan Guides the day-to-day production or delivery of an organization’s goods and services, and which enacts a functional strategy Single-use plan – developed to achieve a particular goal or in response to an event that is not expected to be repeated  Option-based plan (p. 213) preserves flexibility in contexts of uncertainty by investing in several alternative plans

8- 10 Management 1e Management 1e Goal Plan Types and Components (cont.)

8- 11 Management 1e Management 1e Goal Plan Types and Components (cont.)

8- 12 Management 1e Management 1e Effective Goals (p. 213)  Types of goals Distal goals – primary or long-term goals (p. 214) Proximal goals – short-term goals that increase individual’s ability to reach distal goals by providing motivation and feedback Stretch goal – almost unattainable and requires the full capacity of an individual, manager, team, or organization to accomplish  Means-ends chain (p. 215) Integrated series of goals in which the accomplishment of lower-level goals contributes to the achievement of higher- level goals

8- 13 Management 1e Management 1e Team Commitment (p. 215)  Goal commitment Motivation and determination to achieve a goal Team members must share the organization’s vision  Management by objectives (MBO; p. 217) Management and employees agree to specific goals that are then used to evaluate individual performance

8- 14 Management 1e Management 1e Individual Performance (p. 217)  Action plans Specific actions, people, and resources needed to accomplish a goal

8- 15 Management 1e How Managers Track Progress (p. 218)  Performance dashboards Visual representation of an organization’s strategies and goals, which allow managers to track progress toward metrics and goals immediately Balanced scorecard – provided managers and information system designers a balanced approach to developing performance dashboards (p. 219)  Augments traditional financial measures with nonfinancial areas:  Company’s relationship with customers  Key internal processes  Learning and growth  Key performance indicators (KPIs)  Measurements that managers identify as vital to the company’s performance

8- 16 Management 1e How Managers Track Progress (cont.)  Balanced scorecard Figure 8.2

8- 17 Management 1e How Managers Track Progress (cont.)  Dolphin Inn Performance Dashboard Figure 8.3

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