Many business authors and some leaders with whom I have worked like to treat goals as an objective measure – something they believe cuts through the clutter of people issues and gets to the root of how a person or a team is performing. Some love the idea of tying big rewards to achieving goals to motivate people to stretch. I disagree.
When we decide to set a goal with a person we lead – closing five sales in the next month, for example – the goal is set subjectively. It is just a best guess or, even worse, wishful thinking about what can be done by whom and by when. Tracking progress against these goals is okay, but using rewards to motivate people is a recipe for disaster that will have the opposite effect of improving performance. If you try to motivate people to reach targets by tying rewards to them, they will start to push for lower targets to make sure they can meet them. Or, when the goal seems unreachable, their efforts will diminish when they realize that the reward isn’t going to materialize. Your idea of setting targets to help people stretch will become totally counter-productive.
Leadership trainer Linton Sellen makes the point clearly – goals should never have rewards attached to them. The real key is to observe and evaluate performance subjectively as people work toward the goal. Bad performance does not get a pass from me just because a goal was achieved, nor does good performance go unnoticed and unrecognized just because a goal was missed.
Goals should be used to clarify expectations, prioritize work, facilitate communication, and allocate resources. Goals are not the right tool for creating motivation. Motivation comes from a caring leader helping a person or a team get better every day.