I realize a common thread working with a few clients on what the term
#stretchedtargets mean. There is confusion and debate. Practices vary and, in many cases, not ideal, or optimized for employee performance. So how many stretched targets should an employee have? How does this differentiate with their normal jobs?
Let’ start with the simplest one. An employee is paid a salary to do a job. They need to fulfil certain expectations as part of that job against that salary.
Without getting too technical companies expect employees to put in additional effort so that they are adding “value” over and above what is expected from them in their jobs.
This is in pursuit of adding excellence which ultimately grows the company. In pursuit of this excellence, companies and leaders want employees to do more than their jobs. Stretched targets are those goals/objectives that are part of that value addition.
Stretched targets are ambitious goals that push employees beyond their comfort zones. These goals are supposed to be challenging, aiming to add significant value over their jobs. In some ways you are elevating your own job through them.
Therefore, they play a huge role in organization’s success.
So, if that is the case, what is the ideal number of stretched targets? The confusion around them arises from uncertainty about how many should be included. It’s important to strike a balance; setting too many can be overwhelming, demotivating, and counterproductive, while setting too few may not stimulate the desired level of excellence.
Best practice & research suggests that they should not be more than 3-4 stretched targets.
This is under the assumption that your company’s target setting is already mature, advance and robust. If so, then 3-4 stretched targets are enough.
If these goals are truly stretched, we shouldn’t expect everyone to achieve them. You will have only a small portion of employees who will overachieve, most will just about achieve them all and some will fall short. Stretched targets are supposed to make you work very hard and their impact is visible.
#BestPractice: Include at least one development goal in annual objectives to ensure continuous employee development. This allows employees to not only meet performance targets but invest in their own development.
#CaseStudy: I saw few companies where on average employees had 7-12 unique goals. Each had 5%-10% weightage. I simply asked the leaders that if these are stretched how can you expect employee to.
1) achieve them all
2) differentiate between so many
3) figure out where to invest given they all weigh 5%-20%
I advised them to simplify, keep it close the functional plans and discuss/revisit if needed and really think about that word
What are you doing in your companies and what have you seen? Share !
