August 25, 2021

Why your organization needs a goal setting methodology (and how to choose one)

Ally Technologies, Inc.

Too many employees today are putting in long days of hard work without seeing the payoff.

Our recent survey of 4,500 professionals from the US and UK revealed that 62% of people who have been forced to work remotely due to the COVID-19 pandemic say they’re working harder than before, yet seeing fewer results. That’s not only bad for morale, it’s bad for the bottom line. 

How, then, do organizations address this gap between effort and achievement? The data tells us that the best solution is to put processes and frameworks in place that drive success, and that the most effective way to do so is by implementing a goal-setting methodology that’s used throughout an organization.

This becomes especially critical as we transition to new models of work and need to ensure employees are aligned regardless of their physical location.

Download a free copy of the 2021 Goal Management Report.

The many incarnations of goal setting methodologies

In the survey we conducted for our 2021 Goal Management Report, nearly three quarters of respondents (74%) said their company has an established goal methodology.

Goal framework

Clearly, goal setting methodologies are prevalent—but why? How do they help organizations succeed? 

In 1968, Dr. Edwin Locke published his article “Toward a Theory of Task Motivation and Incentives,” which highlighted his research on goal setting and motivation. He found that clear goals and feedback are the golden keys to motivating employees. Moreover, that difficult and specific goals are even more motivating, as employees will work harder to achieve them. Years later, Locke published a book with Dr. Gary Latham entitled A Theory of Goal Setting and Task Performance on goal setting and performance in the workplace. 

Locke and Latham’s work ignited a sort of goal-setting revolution amongst organizations looking to perform at a high level, which we see reflected in our survey results. And since the ideas have been around for decades, it’s no surprise that multiple methodologies have taken shape over time. That’s why, despite the widespread adoption of goal methodologies across organizations today, there is still a lack of consistency in use. 

These are the most popular frameworks in use today:

Objectives and key results (OKRs): Ambitious goals that allow businesses to ask what they want to accomplish (objectives), and how they’ll measure that success (key results). This is what the OKR software platform is built upon. 

V2MOM: A framework established at Salesforce for building alignment and leadership across vision, values, mission, objectives, and measures. 

Management by Objectives (MBOs): Goals are defined by management and conveyed to individual employees. Mangers then focus on what employees are achieving, rather than how objectives are being achieved. 

SMART Goals: An acronym for specific, measurable, achievable, realistic, and timely. These goal criteria are designed to focus efforts to achieve concrete targets in a designated amount of time.

Key Performance Indicators (KPIs): Quantifiable measures that gauge progress against a set of targets or objectives.

Beyond the varying types of goal setting methodologies being practiced in organizations today, there’s also inconsistency in the way they’re deployed. According to our survey…

  • Nearly half of employees use company-wide frameworks (43%)
  • A majority deploy their goal framework more narrowly to teams and departments (57%)
  • Only a third have goals that trickle all the way down to the individual (36%).

So does having a broadly used goal framework really matter? 

Yes! Locke and Latham knew–and the most successful organizations have accepted–that specific, audacious goals are the key to employee motivation and performance. It matters how well a framework accomplishes those two key pieces of the puzzle. That leads us to look at the data again to see which framework rises above the others.

The power of the OKR methodology

Individual contributors who use OKRs see more value from them than other goal frameworks. That’s because this method is designed specifically to hit the two golden key requirements: specificity and difficulty. The OKR framework require goals to be specific (thanks to key results) and don’t expect that every single one will be achieved. in particular empowers individuals to take risks and shoot for aspirational goals. This enables alignment and innovation that’s far and above other goal methodologies. We see that reflected in the data, with 88% of customers saying they feel empowered to take risks, and 93% saying they feel aligned with their coworkers. Those numbers plummet without a framework in place.

Take a look: 

Goal Management

Beyond alignment and empowerment, OKRs in are designed to cascade down to the individual. This promotes high levels of engagement, which in turn results in greater productivity and success for the organization as a whole. From our survey, OKR users revealed that, compared to other goal frameworks, they:

  • Achieve their goals more frequently 
  • Feel empowered to take risks more often
  • Are more inspired by their work
  • Rate company culture higher 

It’s this power of OKRs that has led us to create an entire brand around them. Want to learn more about how can bring your organization success with OKRs? Schedule a free 30 minute consultation from our OKR pros today.

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