It is important for management to have a clear picture of where they are going and how they will get there.
The seconds step in the planning process is where we
- Set goals for the organisation.
- prioritize the goals
Setting goals for the organisation
Types of goals
- We need to determine the long-term goal. Our long term goal is broad and represent what we ultimately want to accomplish (the destination).
- We also need more specific short-term goals to keep us on track (kind of like check points on the road that leads to the destination).
Purpose and importance of goals
If a group of employees do not have a predefined goal, they will likely formulate their own goals and aim their actions to achieve it. The problem is that they will have different destinations in mind and different routes to get there. A manager must guide employees in the right direction. If he is uncertain where he is heading, time and energy will be wasted.
The aim of management is to achieve the highest possible output with the least possible input. It is therefor imperative to determine what needs to be done to achieve our goals before allocating and applying resources.
A group can only achieve its common goal if every group member understands where he fits in and the individual goals he must achieve to support the common goal. The network of supportive goals helps team members to collaborate and also serves as a cohesive factor (meaning it helps them bond).
Well-formulated goals also serve as performance standards against which an individual or a group’s performance can be measured.
Goals are important at all levels of management. The higher up in the chain of command you are, the more people are affected negatively if you don’t have properly formulated goals, because they depend on your guidance.
Setting goals at different levels of management
There are major differences in the nature and scope of planning at different levels of management. There are also big differences in the types of goals set at different levels of management.
It is the task of top management to formulate an enterprise’s mission that sets out the reason for its existence. A mission not only indicates what a company is doing at present, but also what it intends to do in future. Basically a Mission is a general goal that must be achieved to the satisfaction of the greater community where an organization operates.
In addition, top management also formulate goals like company extensions, marketing strategies or changes in technology. Finally, each senior executive must also set specific goals for his own performance.
Mid level managers are usually involved in the management of specific business functions, or departments. Therefore, they are responsible for formulating goals for their functions or departments as well as key performance areas in the organisation. A key performance area is an area in the company that has a big impact on the success of the organisation as a whole. Mid level managers must also set up specific goals for their own work.
Lower-level managers are mainly concerned with setting specific goals for their own work units, their subordinates and themselves.
An organization has numerous goals formulated at various levels in the management hierarchy and in different functional areas within the organization. These goals should all be complementary to each other. If goals with different end results are formulated, it will lead to chaos in the company.
For instance, when a company decides to put a new product on the market, the research and development department must set goals to develop the product. The marketing department must set goals for the launch and marketing of the product. The production department must set goals for the production of the product. The personnel department may have targets for the appointment of staff involved in the manufacture and marketing of the product. Thus, in an organization there is a network of goals that complement and support each other.
Requirements for effective goals
Any goal is better than having no goal. However, if goals really need to contribute to the success of an organisation, it is necessary that they meet certain requirements. Kroon (1990; p.150) lists the following eight criteria:
- Goals must be written . It forces employees involved in setting goals to properly think it through and prevent goals from being forgotten.
- For each goal, a time frame must be specified within which the final result must be achieved.
- Goals must be realistic but challenging . A goal that can be achieved without effort has no motivational value, while a goal that can not be achieved at all will be demotivating.
- A goal should, where possible, be defined in measurable terms, so that it can be used to measure progress and performance.
- The persons responsible for carrying out the work must be involved in formulating the objectives. This will make them feel connected to the goals.
- The goals must be acceptable to the persons responsible for achieving it. Their buy in is needed.
- Circumstances in which an organization operates are constantly changing. Targets should also be adjusted from time to time. Therefore, goals must be flexible.
- Goals must be defined so that they are understandable to those responsible for performing the task.
Manage by Objectives
Manage by objectives is a systems approach to goals, performance and performance assessments. Goals are set for those actions that contribute most to the success of the business. Employee performance is judged according to the achievement of these important goals. If an employee fails to achieve these goals, affirmative action that follows will be geared towards helping him achieve these goals. In many cases, an employee’s increase is also based on the extent to which he achieves his goals.
The number of objects or plans that a manager can handle at any given time differs significantly based on circumstances. It depends on factors such as the scope of plans, the level at which a manager operates, the resources available to implement these plans, and how much work he has to do and how much he can delegate. Having said that, it can be assumed with reasonable certainty that (depending on the above factors) between 5 and 15 plans can be managed effectively.
Usually there are more plans that should be attended to at a given stage. But not all of these plans make the same contribution to the organization’s final results. The well-known Pareto principle states that about 20% of the activities give rise to 80% of the results. The opposite is also true. 80% Of the activities carried out, results in only 20% of the results.
Any manager should therefor pay the most attention to the 20% activities that give rise to 80% of the results. Unfortunately, the less important 80% is often done more frequently because it is easy or habit. Each person must, therefore, deliberately try to identify the work that matters more.
The first step in this process is to identify routine tasks that are repeated daily, weekly, monthly, or even annually without much change. Try to standardize or automate these so that it does not require much management and can easily be controlled. No goals should be formulated for this , because it is a normal part of the day and not important for the achievement of goals.
Next, all the goals identified as being of greater importance to the success of the company must be analyzed to determine its priority (Priority is a ranking)
What to consider when we prioritize
A useful approach to follow in determining priorities is to look at the impact, urgency and negative growth.
Impact refers to the extent to which the matter affects the organisation. Factors to consider to determine the impact includes:
- Influence on people . Anything that may affect the motivation, security, productivity or happiness of workers always has a major impact on the organization. The greater the number of people affected, the greater the impact.
- Financial implications. The greater the financial impact of a matter, the greater its impact on the organization.
- Technological impact . Any matter that involves a change in the organization’s technology will have a very big impact. Technology must be considered as a change in the processes or machinery of the organization.
These are just a few examples. Effort must be made to reflect on the impact on every aspect of the business.
Urgency. How soon we must pay attention to the matter. This can be dependent on the sequence of events, whether or not a task is on the critical path of a project, set time limits, meetings that have to take place, regulatory requirements, etc.
Negative growth refers to how quickly a situation will deteriorate without intervention. The bigger and the faster the deterioration, the greater the effect on the organisation.
The Process of prioritization
First list all the items that need attention. If not action is needed, the item must not be on the list. Draw 4 columns on the right side of the page, with headings I (Impact), D (Urgency), G (Growth) and T (Total).
Then rate the impact each item has on the organisation. It is important to rate Impact first. To do this, identify the item that has the highest impact and assign the score 10. Then find the item with the lowest impact and assign the score 1. The second highest impact gets a score of 9 and the second lowest impact gets the score 2. It may be difficult to decide which item to assign 4, 5 and 6 to. This can be done by looking at the different factors of impact. The same score can be awarded to more than one goal.
The next step is to consider the relative urgency of all the items in relation to each other in the same way and to allocate marks. Again, it is important that attention is paid to the issue of urgency.
Lastly, rate negative growth on the same basis as impact and urgency. When no deterioration will occur, zero can be awarded. The remaining items are judged on the same basis and also receive points ranging from 10 to 1.
Enter the sum of all ratings per item in the total column. The goal with the highest score is the first priority. This is merely a technique for prioritizing. Don’t stare yourself blind against the figures. Repeat the process if the order of priorities does not make sense when judged on face value.
The key to reliable results with this technique is to be as objective as possible when awarding the marks.
Hannes Kruger, Management training manual. Written for the Meat Board, Chapter 2