What are "SMART" Objectives for Performance Review

Although many people believe Peter F. Drucker is one of the pioneers who first introduced the concept of "SMART" to describe how objectives should be set for the purpose of performance management, upon further research it should be noted that there are many versions of the acronym "SMART" in the world and it is difficult to determine which one is original or the first one.

Nevertheless, we can still summarize the typical explanations of each letter, to introduce the key principles for both supervisor and staff members to set objectives.

Specific (S)

An objective is specific when people are able to identify what has been changed if we claim that the objective is met. In addition, an objective is "specific" if its interpretation is fairly consistent among different stakeholders. Examples of "specific" and "non-specfic" objectvies are:

Individual Development Goal of Work Core Competency
Non-Specific Better understanding in accounting Involve in ABC project Improve working relationship
Specfic Pass the accounting exam ABC project obtains board's approval 30% improvement in 360-peer-review

Measurable

As a matter of fact people are easier to evaluate things if numbers are involved. When setting objectives, make sure benchmark is included so that results can be quantitatively measured. For example:

  • 20% improvement in sales volume
  • Reduce error rate to below 5%
  • Limit the waiting time of customers' call within 1 minute

Achievable

For staff members, performance management is a key components of career development. While we can set demanding objectives that, if being met, can translate into higher revenue or profit of the company, we have to remember that the bottom-line is to maximize the chance that the staff-member can achieve those objectives.

Therefore, when setting objectives, supervisor should spend time on discussion and mentoring so that staff-members understand how they can achieve the objectives. For example, what skills they should acquire, who are the role models they can follow, where the resources can be found, etc.


Relevant

From supervisors' perspective, objectives are relevant if they are relevant to overall corporate goals or at least targets of the department or function.

From employees' perspective, objectives are relevant if they are relevant to their career development or promotion in the current company.

Think about rotation if employees' development targets out-grow the departmental of function's targets.


Time-bound

Finally, objectives must be time-bound. For simplicity, the time-line can simply follows that of appraisal cycle. There are, for sure, long-term objectives that take years to complete. In this case, try to break-down into minor steps so that each step can be, individually, measurable and achievable in each appraisal cycle.



You may also be interested in:

How to Conduct Appraisal and Performance Review?

Chinese Version Only: Using Excel for salary calculation, MPF calculation and performance review

Chinese Version Only: Try to use Google Form to conduct appraisal

Chinese Version Only: But why Google Form is really not sufficient for Performance Management?