Setting goals can often be overwhelming or vague, and linking individual goals to organizational goals is not as easy as drawing a straight line.
The SMART criteria provide a clear, structured approach to goal planning. When combined with technology solutions like OKR (Objectives and Key Results) software, managers and employees can work together to connect the dots.
The essentials in brief
- The SMART framework transforms vague objectives into clear, actionable goals, increasing clarity and effectiveness.
- Goals should be ambitious but achievable. It is important to set goals that expand skills but remain within realistic limits.
- It is crucial that the goals are consistent with the overall goals of the company and that a specific time frame for achieving them is set. This alignment creates a sense of urgency and helps maintain focus on the company's broader strategic goals.
What are SMART goals?
The acronym SMART stands for Specific, Measurable, Achievable, Relevant and Time-bound Goals. Let's take a closer look at each of these elements.
- Specific - Emphasizes the importance of a goal being clear and precise. A specific goal clearly defines what is to be achieved and answers the questions: What needs to be achieved? Who is involved? Where will it take place?
- Measurable - A measurable goal is a goal that can be quantified or assessed so that you can track progress and know when the goal is achieved. It answers questions like: How much? How many? Which metrics should we use?
- Achievable - Goals should be realistic and achievable. That doesn't mean they can't pose a challenge. An achievable goal takes into account current constraints such as resources, time and skills.
- Relevant - This ensures that the goal is relevant to you and consistent with other relevant goals. The point is that the goal makes sense in the broader context of your professional activity or your life goals. A relevant goal often answers the question of why the goal is important and why now is the right time to pursue it.
- Time-bound – This creates a sense of urgency and encourages action. A time-bound goal answers the question: When does the goal have to be achieved? It sets a clear time frame that makes the goal more tangible.
Setting goals using the SMART goal system will help you create an action plan to achieve your goals more effectively.
It helps you measure your progress and hold yourself accountable for achieving your goals.
For example, your goal might be to improve your company's annual employee retention rate. That's a vague goal.
Now let’s rephrase it using the SMART framework. The bold text represents areas in favor of the framework:
The HR manager should increase the annual employee retention rate from 55% to 60% by the end of the second quarter of 2024 by using the information from the exit surveys to understand why employees are leaving the company and act accordingly.
Now you have a SMART goal.
How to write a SMART goal
Let's use the same example of improving employee retention to see how you can create a SMART goal.
Your current goal is to improve your company's annual employee retention rate. You then use each component of the framework to transform it into a SMART goal.
1.Specific goals
Your goals must be specific. Improving customer retention rates is great, but to turn it into a concrete goal, you also need to determine who is responsible for the improvement and what actions are needed to achieve this goal.
Let's look at what we want to achieve with SMART goals using our example:
- Is the goal clearly defined and specific? In this case, the goal has set customer retention rate as the KPI we want to influence and has provided a definition of success so that it is both clearly defined and specific.
- Does it describe exactly what needs to be achieved? Increased annual employee retention rate from 55% to 60%.
- Who is the person responsible for the goal? In this case, the ideal person to be held responsible for the goal is the HR manager.
- What is your action plan? Use exit surveys to understand why employees are leaving the company and address those issues.
2.Measurable goals
Quantifying your goal helps you measure progress so you can determine how far you still have to go to reach the goal.
By making goals measurable, we want to track progress and determine when the goal is achieved.
In our example, you want to improve the annual employee retention rate. We need to answer these questions:
- Can progress toward the goal be determined or measured? What should the desired change look like, how should it be tracked, and which metrics should illustrate progress?
- What are the clear milestones or indicators of progress? Since we know that the baseline is 55% and our goal is 60%, milestones and indicators are easy to decipher for anyone looking at the data.
- How will I know that the goal has been achieved? By setting a goal, you make the goal more tangible and help the person pursuing it understand when they can move on to other goals.
3.Achievable goals
Your goals should be realistic. You want to encourage your team to push themselves to the limit, but realistic, achievable goals are crucial for morale.
It is helpful to involve the person responsible for achieving the goals in the goal setting phase. Try to understand the bottlenecks they might encounter along the way and work with them to make the goal achievable.
In our example, it is the resources available to the individual to take an action, in this case the data from the exit surveys, that make the goal achievable.
Let's consider some factors that would play a role in evaluating accessibility in this example:
- Do you have the necessary skills and abilities, or can you acquire them? It is unrealistic to ask someone to achieve a goal for which they do not have the necessary skills. Find out what the hurdle is to overcome before setting goals.
- What are the obstacles? Engage your team to find out what might be getting in their way. Are e.g. For example, is the data from the exit surveys unreliable, irrelevant or unclear?
- Is the goal realistic given the restrictions? If the team relies on faulty data, they will be ill-informed in their decision-making. In this case, the goal can only be achieved once the necessary structures have been created to provide relevant data.
4.Relevant goals
If you set a goal to improve employee retention, how does this help your company achieve its business goals? Does the company have other goals that need to take priority at the moment?
This aspect of SMART goal setting helps you ensure that the goals you set are relevant to your company's current situation and that they contribute to achieving the company's overall goals.
Referring to our example, we should check the relevance of the goal using two questions:
- Is the goal consistent with the company's goals or values? Improving annual employee retention rates can reduce talent acquisition, onboarding and training costs.
- Why is now the right time to pursue the goal? The impact will be reflected in the company's bottom line, and since optimizing profits is certainly a core goal for companies, this will always be a relevant goal.
- Does this goal have a positive impact on your personal or professional development? People are naturally interested in their own development. If the goal can be linked to their development while supporting the company, you are more likely to get the engagement you want.
5.Time-bound goals
If you don't set a date for achieving a goal, the chances of achieving it decrease significantly.
Setting deadlines helps you track progress on your goals and understand how the strategy is evolving over time. This way you can optimize your strategy if necessary and have the chance to get back on the right track.
In our example, the HR team's goal is to improve annual employee retention rates by 5%. Then we have to answer the most important time-bound question.
- When does this have to be done? By making it clear that this must happen by the end of Q2 2024, you give your team a sense of urgency, making them more likely to achieve the goal.
- Is the schedule realistic and feasible? Based on past performance, your team's breadth, and relevant trends in your data, you can accurately assess whether the goal can be achieved within the specified time frame and set milestones for success.
- Are there interim deadlines for milestones along the way? Goals are rarely achieved by going from point A to point B. Setting milestones along the way gives the individual or team a chance to take a breath, evaluate what's working, and apply what they've learned so far when fine-tuning strategies.
Examples of SMART goals
You can turn any goal into a SMART goal. Here are three examples of regular goals converted into SMART goals.
- I would like to diversify my product portfolio: I would like to expand my product portfolio with three new products by the end of the first half of 2024 by setting up an R&D team dedicated to product design.
- Provide more training for the HR team: I would like to increase the number of weekly training hours for the HR team from 3 to 5 hours by the end of the current quarter by automating part of the HR processes, which will save part of the time of the will release teams.
- Improve employee experience: Obtaining feedback from team members to identify methods to improve their experience within the company and using the results to increase our Net Promoter Score from 55-65 within the next year.
- Benchmarking salaries as a basis for our compensation strategy. Benchmarking all salary groups compared to our competitors by the end of the second quarter to determine whether we are competitive in the market.
Determining the scope of a SMART goal
Setting a SMART goal is not just about outlining the goal to be achieved, but also about understanding the larger goal it serves.
Here are some simple steps to identify the overarching goal of your SMART goals:
- Alignment with the mission, vision, or long-term goals: Start by asking how the goal fits into the bigger picture of the organization's purpose. Understanding this alignment ensures that your objective contributes to broader strategic priorities.
- Assess impact on key areas: Consider what impact achieving your goal could have. Will it impact productivity, customer satisfaction, employee engagement or profitability? This helps understand the meaning of the goal in a larger context.
- Identify the stakeholders: Identify who will be affected or involved in achieving the goal. Knowing the stakeholders allows you to assess the scope and importance of the goal within the organization.
- Break the goal down into sub-goals: Sometimes a big goal can be overwhelming. Break it down into smaller, more manageable subgoals. This step helps ensure that each subgoal effectively contributes to the main goal.
- Evaluate Resources and Constraints: Consider required resources and constraints that could impact the objective. This includes budget, time, staff and technology. Understanding these factors will help realistically set the scope of the goal.
- Review and Adjust: Be open to reviewing and adjusting the scope of the goal as needed. Sometimes initial assumptions change or new information comes to light that requires a reevaluation of the goal.
With SMART goals to success
Writing SMART goals doesn’t take much time. All you have to do is make sure that your goal meets all the SMART criteria, is specific, measurable, achievable, relevant and time-limited.
Now that you know how to write goals using SMART goals, you can be more proactive in helping the company achieve its goals or focus more on your personal goals and professional development.
Implementing SMART goals, supported by tools like IceHrm, ensures clarity, accountability, and strategic alignment, leading to improved performance.