1. Building A Culture of Goal Setting Presented by: Chris Bergeron - Director, Consulting Services, Salary.com July 23, 2010 1

2. Learning Objectives
Defining the goal setting process and how it fits with other processes and programs
Reviewing tactics for making goal setting relevant, consistent and impactful
Discussing how to get started 2

3. Start with the Strategic Plan Define Structure and Process
Agenda
“Organizational”
(Executive Team)
Start with the Strategic Plan
Define Structure and Process
Get Beyond Finance Measures
Highlight the Manager/Employee Conversation
Questions
“Individual”
(Manager/Employee)
Q/A 3

4. Annual Planning Meeting4

5. Start with the Strategic Plan
Define Overall Goal Setting Program Objectives and Guiding Principles
Help Facilitate the Annual Planning Meeting
Set the Timeline for Goal Setting and Related Processes
Work with the Executive Team to Create a Goal Setting Framework that is Broad and Diverse 5

6. Define Guiding Principles - Example
Single Combined Process
An integrated approach should be provided for goal setting, development planning, mid-year and end-of-year reviews with separate, weighted performance criteria for goals and competencies.
Drive performance thru the integration of “What” and “How”
Expanded Goal Setting Capabilities
The process should emphasize both “results” as well as “contributing” goals. HR should be a facilitator and enabler for helping to build organizational capability, maintaining standards and managing this process.
Enhance strategic alignment and planning
Collaborative Coaching Conversations
Executive and manager focused training for engaging in a goal setting as well as development planning and review discussions needs to be provided. Supporting tools and techniques for guiding collaborative goal setting and management should also be made available.
Require dialogue to reinforce individual alignment and development
Simple, Clear Guidelines for Compensation
The organization should have a consistent approach to incentive pay where the assessment of goals drives the bonus, and the assessment of competencies drives base pay increases.
Consider both business results and impact on areas of direct control 6 6

7. Get Involved and Set the Timeline - Example
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Goal Setting Process
Strategic Planning for New Year
Year End Results
Performance Management Process
Goal Cascade
Revisit Goal
Performance and Development Planning
Mid- Year Review and Discussion
Year End Reviews
(Goals and Competencies)
Succession Process
Succession Meetings
Compensation
Merit and Bonus Determinations
Payouts and Salary Actions

8. Define a Framework that Fits Your Objectives
Financial
Revenue
Cost
Return/Margin
Operational
Quality
Timeliness
Agility
Customer
Satisfaction
Referencability
Retention
People
Engagement
Alignment
Competency
Planning----Execution----Improvement
Adapted from The Balanced Scorecard and related works by David Norton and Robert Kaplan 8

9. Start with the Strategic Plan Define Structure and Process
Agenda
“Organizational”
(Executive Team)
Start with the Strategic Plan
Define Structure and Process
Get Beyond Finance Measures
Highlight the Manager/Employee Conversation
Questions
“Individual”
(Manager/Employee) 9

10. Define Structure and Process
Define goal setting terms
Set process guidelines
Determine rewards and consequences 10

11. Attributes of a Goal Owner Category Linked Goal
Statement, Description and Activities
Target
Weight

12. Attributes of a Goal (Cont.)
Owner – Individual to be reviewed on the goal
Category – Goal alignment to strategy
Linked Goal – Impacted higher level goal
Statement, Description and Activities – Detail of what will be done and what the result or outcome will look like
Target – Measurement and target or target date
Weight – Weight for the goal on their performance review of the owner

13. Goals Are NOT Activities or Job Responsibilities
Goals should be defined at a level above the isolated activity or job responsibilities (for example, “taking a training class” or “completing monthly reporting on time” do not constitute a goal).
Goals are intended to produce positive change Managers are responsible to test that each goal goes beyond job responsibilities and truly constitutes an effort to creating an improvement or produce a positive change. 13 13

14. Set Process Guidelines: Goal Numbers, Linking and Weighting Examples
Managers and employees should focus on the “critical few” goals that are most important in contributing to the desired results and outcomes
As general guidance, goal plans should include from to 7 individual goals for the year
Individual goals should be linked to higher level goals
Managers should be the ultimate decision makers regarding the number, linking and weighting of goals for their organization and director reports
Q/A

15. What Type of Goal Setting Process
Approximately 75 webinar participants, May 2010.

16. Set Guidelines for Cascading a Goal: Marketing Examples
Manager Goal Statement and Supporting Activities
Application of Key Principles
Direct Report Goal Statement and Supporting Activities
Not Cascaded:
Improves COGS versus 2008, by achieving Program spend of 10% of Sales
Director report has no control over outcome
Not applicable, except for coaching discussion about how his/her goals support or otherwise interact.
Individual should be aware of how to support manager’s goals and about how own goals interact with non-cascaded goals.
Fully Cascaded:
Achieves market share at 22.4% in fiscal year 2010, by completion of the following initiatives: Implementation of 16 selling classes, 8 Boot Camps.
Manager needs to clarify rationale for fully cascaded goals and how supporting activities will change for that individual.
Achieves market share at 22.4% in fiscal year 2010, by completion of the following initiatives: Implementation of 16 selling classes, 8 Boot Camps.
Even full cascading requires clear documentation of changes in “supporting activities” for implementation.
Partially Cascaded:
Implementation of 16 selling classes, 8 Boot Camps.
Manager focuses on the key contributing activity of the direct report
Delivers 16 selling classes with participant satisfaction ratings of more that 90% and new leads generated 10 % higher than last fiscal year quarterly.
Cascaded goal most often represents subset of manager’s goal related to one or more key activities
Added for Individual:
Facilitating the completion of the various initiatives that improve brand image.
Manager focus on the unique functional contribution beyond the manager goals that supports the result.
Specifies 3 new classes or dealer learning initiatives during the first 2 quarters of the year that gain approval for implementation by the strategy team.
Personal goals are most often related to either functional support activities or personal development goals.

17. Linking Goals to Compensation and Development
Evaluation Process
Compensation and Development
PERFORMANCE
“WHAT”
(Achievement of KPI and Objectives during the period)
Base Pay Adjustments
Ratings
(and Comments)
Short Term Incentives
Employee Ranking
(for succession purposes, not to be communicated)
Long Term Incentives
Overall Rating
COMPETENCY
“HOW”
(Demonstration of Knowledge, Skill and Ability consistent with high performance)
Ratings
(and Comments)
Training &
Development

18. Start with the Strategic Plan Define Structure and Process
Agenda
“Organizational”
(Executive Team)
Start with the Strategic Plan
Define Structure and Process
Get Beyond Finance Measures
Highlight the Manager/Employee Conversation
Questions
“Individual”
(Manager/Employee) 18

19. A Balanced Approach to Goal Setting
Communicate that both results and contributing goals are expected
Provide coaching and training for managers
Highlight the best plans as examples
Adapted from The Balanced Scorecard and related works by David Norton and Robert Kaplan and Path-Goal Theory by Robert House. 19

20. Results and Contributing Measures
Focus Area
Contributors
Results
Sales/Marketing
Marketing campaign implementation completion level
New product sales
Sales
Customer visits/leads
Sales revenue
Safety
Compliance with safety standards
Accident rate
Manufacturing
Preventive maintenance schedule compliance
Manufacturing line “up time”
Customer Service
Customer complaint responses
Product returns
Talent Management
Key developmental experiences completed
Competency change accomplished
Coaching
Number/quality of coaching conversations
Employee retention/motivation level

21. Measurement Approaches
Quality
Error rate
Customer/client feedback/satisfaction – interviews, surveys, etc.
Employee satisfaction
Conformance to requirements or specifications
Compliments or complaints
Brand/product recognition
Quantity
Usually expressed as the amount of work completed within a time period such as units per day, calls per hour or shipments per quarter
Skills level/acquisition
Expenditures
Sales achieved
Services provided
New products introduced
New customers acquired
Sales activity
Market share
Margins
Cost
Budgetary guidelines met or exceeded
Overtime costs incurred
Dollars spent or saved
Cost of good/material
Timeliness
Schedules met
Deadlines met
Specific timeframes met
Efficiency
Reduction in cycle time
Elimination of waste
Elimination of unnecessary steps

22. Start with the Strategic Plan Define Structure and Process
Agenda
“Organizational”
(Executive Team)
Start with the Strategic Plan
Define Structure and Process
Get Beyond Finance Measures
Highlight the Manager/Employee Conversation
Questions
“Individual”
(Manager/Employee) 22

23. The Manager/Employee Conversation
Clearly define roles and responsibilities
Build the process around the goal setting conversation
Emphasize ownership and (authorship) 23

24. Define Roles and Responsibilities
People Manager
Employee
“Set direction for goal setting, and define areas of emphasis”
“Define specific goals, activities and tasks”
Present and discusses organizational goal
Work with direct reports to define relevant goals for the coming year, related to the organizational goals
Document goal progress observed throughout the year and provide timely feedback
Coordinates mid-year review discussion
Completes mid-year review
Adjusts objectives as necessary for the reminder of the year
Coordinate end-of-year review discussion
Complete end-of-year review
Coach and re-directs behavior as required for the coming year
Meet with manager to discuss individual goals for the coming year
Help develop appropriate supporting goals and activities
Coordinate mid-year review discussion with manager
Complete mid-year self assessment
Meet with manager for mid-year follow-up discussion
Coordinate end-of-year review discussions with manager
Complete end-of-year self assessment
Meet with manager for end of year review
Goal Setting
Mid-Year
End-of-Year

25. Collaboration Discussion
Manager’s Agenda for Goal Setting Discussion:
Review organizational strategy
Review higher level goals
Propose or review (if completed by the employee) individual goals for the employee
Confirm alignment to higher level goals
Propose or review (if completed by the employee) weighting
Reinforce that goal achievement should be consistent with the Values and Behaviors of the organization (e.g. defining both the “what” and the “how”)
Confirm times for periodic review of progress
Q/A

26. Standards of Goal Quality, Going Beyond the “Critical Few”
Optimum number - Focus on the critical few factors that enable realistic prediction of performance.
Balances contributions and results - Balance measures for predicting the future and analyzing past actions.
Balanced level of precision - Value generated is precise enough to define information that can lead to productive actions.
Ease - Easy to measure in terms of effort and simplicity.
Right level of accuracy - Provides reliable, valid data for tracking business performance and making decisions.
Consistency - Provides consistent data that can be interpreted for each measurement.
Cost effectiveness - Is not too costly to gather and analyze, and aligned with business requirements.
Right frequency - Balance timing for data collection that provides meaningful information in a timely manner.

27. Do You Use Quality Standards Today?
Approximately 75 webinar participants, May 2010.

28. What Would be Useful in the Future?
Approximately 75 webinar participants, May 2010.

29. SMART Goals SMART Goals are…
Specific – the goal includes exactly what you will do
Measurable – the goal can be measured, for example number of errors or rejects or percentage of cost savings
Attainable – the goal can be accomplished; it is not too difficult
Relevant – the goal supports the overall objectives of the department and division
Time-bound – the goal includes a specific period of time for completion Q

30. Implementation Change Phases for Goal Setting
Organization
Impact Area
Building a Foundation
(Year 1)
Creating Sustainable Practices
(Year 2)
Leveraging Human Capital Systemically
(Year 3)
Goal setting mastery
Clarification of goal setting approach for indviduals (SMART)
Development of methods for linking individual and organizational goals
Development and implementation of the consistent goal cascading approach
Development of mastery around key principles and practices of goal setting (mix of leading/ lagging indicators; creation and application of goal types/pick list)
Process mastery
Establishment of common approach and process for whole organization
Demonstrated ability to follow process consistently
Managers and team members providing positive suggestions for improving the process and practices
End user acceptance
Key stakeholders enrolled in approach
End user groups fully understanding approach and impact on them
Managers demonstrating ability to take charge of the process
Team members actively participating in process
End users acknowledging individual and team benefit of the approach
Coaching conversation capabilities
Clarification of coaching guidelines
Communication and training for conducting the process delivered
Consistent coaching conversations delivered
Ongoing feedback provided
Fully-engaged, collaborative conversations provided throughout year

31. Start with the Strategic Plan Define Structure and Process
Agenda
“Organizational”
(Executive Team)
Start with the Strategic Plan
Define Structure and Process
Get Beyond Finance Measures
Highlight the Manager/Employee Conversation
Questions
“Individual”
(Manager/Employee) 31

32. Thank You for Joining Today
Chris Bergeron
Director, Consulting Services
Salary.com
(781)
(904)

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