Why SMART objective setting is not working

Managers have been advised to use SMART objective-setting at work for years. Although it's an oft-used acronym we've lost sight of its true purpose, argues Paul Marsh.

SMART - specific, measurable, achievable, realistic and time-bound - is a well-known acronym for anyone creating key performance indicators, but does anyone actually write an objective with these five steps in mind?

Do they recite these five words in their head and sense-check it against the objective they have come up with? Almost never. It's as if the word SMART came first and then someone tried to shoehorn five words into it to make a convenient acronym.

In our work on performance appraisals and objective-setting, one statistic above all others has been most surprising: 86% of objectives are not SMART. It is one of the hardest things to get right and managers need more help and guidance than the textbooks are giving. Just advising people to make sure the objective is SMART is not good enough.

Consider these popular objectives:

• "Take responsibility for X"
• "Lead the project"
• "Be more proactive"
• "Share best practice around Y"
• "Raise your profile".

Here's the problem: these are subjective, full of corporate buzzwords and will therefore lead to a debate over whether they were achieved. This becomes even more of a problem if the objectives have been tied to reward or ratings.

The main problem is that, as currently written, they are activities and the individual can just say "I've done that" for each of them. Obviously, objectives with a monetary target next to them do not have this problem as, generally speaking, they are not subjective - but many of our objectives are rightly non-financial. So, what should we do?

Let's focus on a secret ingredient that can be injected into objective-setting efforts.

The left-hand side above could be described as activities; they also have subjective buzzwords like "lead" and "proactive" in them. However, at work people get a "well done", a pat on the back, a pay rise or promotion when they do something that cannot be guaranteed.

Objectives must incorporate this jeopardy element. Kicking a football is an activity, scoring a goal is a result; writing a document is an activity, the document not having to be amended too much by others is a result. To make an objective more result-focused, the "cannot be guaranteed" test needs adding to give the employee something to aim for.

Television knows this. We watch home makeover programmes and challenges people have been set and we keep watching with anticipation to see what the outcome will be. Will they sort the garden in time? Will everyone be ready for opening night? Will he win that competition? It is this cannot-be-guaranteed jeopardy element that makes the result something to be congratulated.

Do we even need appraisal objectives?

Targets, goals and objectives exist in many places. They are in spreadsheets, emails, on whiteboards, added to to-do lists and captured as part of meeting action points. They are not all conveniently sitting within performance appraisal templates - yet this is apparently where we are supposed to capture the year's objectives.

It is rare that managers add to these documents outside of appraisal meetings, quarterly check-ins etc so they do not represent the whole of an individual's performance. It is also often the case that managers and employees struggle to come up with objectives so inevitably we get unhelpful objectives such as "Continue to build relationships with X this year".

The solution is to identify the triggers required for an objective to be agreed. For example, one trigger might be where something in the role is not currently a habit for an individual to do and would ideally need to be so as the next stage of their development. The agreed objective then becomes a regular discussion and review point in one-to-ones towards its achievement.

We suggest identifying up to three specific triggers and managers should then ask themselves a monthly question: "Do any of these triggers apply when thinking about my direct report?". If the answer is yes then they need to agree objectives - for as short as a month, as long as a year - that we can review regularly in our one-to-ones because they are worth deeper discussion and focus, not objectives for the sake of having them.