When is a Goal not a Goal? When it's an Expectation.
Current performance review wisdom tells you to separate growth and development from performance evaluation, and more importantly, keep them far away from compensation adjustments. But you would never give someone a raise or promote them if they weren’t performing at a high level, and goal completion is a primary indicator of performance success. So how do you separate growth and development from performance evaluation and compensation when goals are the primary tool for both growth and evaluation?
By recognizing the difference between goals and expectations.
Most people create goals that are actually expectations in disguise. Expectations should play a critical role in evaluating performance, while goals should drive growth and development.
Let’s say you have a sales team and they focus on selling phones and accessories. You establish the following for each member of the team:
“Achieve a phone case attach rate of 25% per week.”
Is this a goal, or is it an expectation?
Well, let’s start by thinking about why these salespeople were hired: to sell phones and accessories, right? Therefore, establishing a phone case metric is an expectation, not a goal. It’s clarifying expectations for the job you hired them to do.
You might be thinking “Yeah, but what if their current attach rate is 5%, and therefore an increase of 20% makes it a stretch goal?” I hear you, but it would still fall into the category of Expectation. We’ll come back to this in a bit, and hopefully the categorization of this as an expectation instead of a goal will make more sense.
What’s the difference?
Expectations are tasks and projects that are an ongoing, expected part of our job.
We all have tasks and projects that are an ongoing, expected part of our job. With most responsibilities, the team leader and individual should agree on a specific target. For example, if a job responsibility says “Respond to customer support requests”, a target of “40% of support requests fielded and resolved”, maybe even supplemented with a CSAT target, will help ensure alignment on expectations.
Expectations can change over time, such as with our phone case attach rate example, above.
In the world of Agile, teams organizing a sprint will clearly define what “Done” looks like for each task in the sprint. They aren’t setting goals, they’re clarifying expectations for what constitutes a successful sprint.
Since expectations define success for tasks and projects that are expected of us as part of our job, they should most certainly have an impact on performance evaluation. For most companies, this means that meeting, exceeding, or missing expectations will affect pay and bonus. And why wouldn’t it? You don’t want to give someone a raise or bonus if they consistently fall below expectations.
(At Plumeria, we think it’s better to completely separate pay from performance, meaning raises wouldn’t be affected by meeting, exceeding, or missing expectations. We’ll publish a separate article on how this works, and you can connect with us to find out more in the meantime if you’re curious.)
Goals are tasks and projects that go beyond what someone was hired to do and seek to grow the individual, the team, and the larger organization.
We all have interests and passions that may be aligned with our job, but aren’t specifically part of the job requirements. For example, a highly-skilled engineer might be considering pursuing a career as a product manager, and therefore wants to improve their presentation skills. This pursuit benefits the team because they could use help conveying value to higher-ups, and benefits the organization because they need more product managers. The team leader and the engineer create a goal for improvement, and establish measurements to track progress (deliver X presentations per quarter, complete specific courses in Presentation Skills, etc.).
Whether or not the engineer improves as a result of the goal, the engineer’s salary shouldn’t be impacted.
Why not? Because completion of the goal is not directly tied to what the person was hired to do (if it is, then it’s likely an expectation in disguise). Think of it this way: in the case of our engineer, we have an employee who has taken it upon themself to create additional value on an individual, team, and organizational level.
Despite this positive intent, let’s say the engineer fails to improve their presentation skills; they’re just as unskilled as they were when they set the goal. If they’re hitting or even exceeding all of the job’s expectations but they don’t get a raise because they didn’t achieve their goals, then when they set developmental goals in the future they’ll be far more cautious and conservative. They might even lose motivation with their job expectations and overall performance might slip.
Essentially, they took a risk and got punished for it, and it wasn’t even what they were hired to do in the first place.
Let’s now imagine that they achieved the goal, drastically improving their presentation skills and becoming a viable candidate for the next product manager opening. Shouldn’t they be rewarded for their effort?
They already were. They were given time and runway to develop skills in an area that excites them, and they were set up for success on their desired career path. Most engagement surveys reveal that professional development is regarded as a critical on-the-job benefit, contributing greatly to employee happiness and engagement.
If you have a recognition program, you can always give them a little something as icing on the cake (even better if the person is recognized by their peers), but avoid using goal completion as a consideration for pay increases or annual bonuses; doing so effectively turns the intrinsic motivation behind the desire to better oneself into extrinsic motivation to win the carrot on the stick. (Intrinsic vs extrinsic motivation will be covered in a future article.)
Expectations are for measuring performance, goals are for growth and development.
The difference between goals and expectations might seem like semantics, but getting it right will not only result in a noticeable improvement in role clarity (according to Deloitte over 50% of the workforce lacks clear day-to-day expectations), but will also help to combat the pay gap issue so many organizations are dealing with. Distinguishing between goals and expectations is also a critical step toward doing away with the dreaded annual performance review, and creating a true separation between performance measurement and compensation.