SMART Objectives are a popular management tool in business and have been for some time now. If you are not familiar with the concept, SMART is an acronym for Specific, Measurable, Achievable, Realistic and Timebound. Typically, SMART objectives are metrics cascaded through an organization that set objectives for individual employees. They are used to manage performance and contribute towards determining pay and bonus.
SMART objectives simplify an individual’s contribution to a metric, measure performance against that metric over defined time periods and isolate the contribution of individuals independent of the whole.
If you compensate an individual according to their performance against a metric, they will get the message and focus on that metric. If it is timebound, then they will meet the objective within the time defined, losing sight of the implications on the next time period. This can make it hard to take account of the more holistic impacts of one’s activities and creates counterproductive behaviors. It reinforces a behavior that the whole doesn’t matter. And isolating the individual’s performance to their metrics distracts from seeing the bigger picture.
Employees are pretty savvy –
after all, that’s why we picked them. At its worst, if you judge an employee
based solely on performance against an individual metric the individual will
find a way to meet and exceed the specific achievement of that metric perhaps
even at the expense of the underlying intent.
In a post back in February, "Legal doesn’t equal sustainable", I commented that sustainable thinking requires seeing both sides of an issue, resolving problems holistically and looking for solutions that none of the participants may have conceived of alone. I think SMART objectives, overzealously applied, undermine this approach and companies need to get smarter at how they are applied.
Of course I understand that the opposite end of the spectrum – judging everyone by the performance of the whole - can lead to mediocrity. But I think we have gone too far the other way. I wrote a piece recently for GE’s 2008 Citizenship report on metrics and particularly the role of ROI in sustainability. In that post I stated that I believe ROI has role to play to inform, but not to lead our business sustainability decisions. I think the same of SMART objectives. They have a role to play to inform, but not to lead our actions.
And as for "naked men in locker rooms?" Well, I keep getting asked about the hit rate on my blog. Apparently that’s an important measure of how successful it is. I heard once through the grapevine that ‘naked men in locker rooms’ is a popular search term and I figured if I added that term to the title, I’d see a boost in traffic.
Just goes to show, that if you only focus on one metric, you could jeopardize the value that you bring as a whole.