How To Set Objectives
Why Unclear Expectations Create Business And Employee Relations Problems
Knowing how to set objectives is an important part of managing performance effectively within SMEs. Well-defined objectives help employees understand what is expected of them, provide managers with clearer ways to measure performance and create greater consistency across the business.
In many workplaces, performance concerns arise not because employees are unwilling to perform, but because expectations were unclear, priorities changed frequently or objectives were never properly reviewed. This can create frustration for both managers and employees and may later lead to capability concerns, disputes or inconsistent management decisions.
For SMEs in particular, objective setting is not simply an HR exercise or appraisal formality. Clear objectives can help businesses:
- improve accountability,
- clarify priorities and expectations,
- support employee development,
- identify performance concerns earlier, and
- create stronger documentation where performance management becomes necessary.
This article explains why objective setting matters, common mistakes SMEs make and how clear, measurable objectives can support more effective performance management and employee development.
Why Unclear Objectives Create Risk
Unclear or poorly managed objectives can create significant operational and employee relations problems for SMEs. In many cases, performance concerns escalate not because employees are unwilling to perform, but because expectations were never clearly communicated, documented or reviewed consistently.
Common problems can include:
Where objectives are vague or regularly changing, employees may struggle to understand what is expected of them or how performance is being measured. This can lead to frustration, reduced accountability and disputes later if performance management or capability procedures become necessary.
For SMEs, unclear objectives can also create management risk. If concerns about performance are not documented properly or expectations have not been communicated consistently, it can become much harder for employers to demonstrate that employees were given fair opportunities to improve.
Clear objectives, regular reviews and consistent communication can help businesses improve accountability, support employee development and reduce the risk of avoidable performance disputes later.
SMART Objectives As A Practical Framework
There are three over-lapping areas for setting objectives:
Job Objectives
Targets defining specific tasks to be completed or projects that the employee agrees to achieve. Job objectives would be relevant no matter who was performing the job in question.
Career Objectives
The setting of projects that will assist the employee’s future career development.
Skills-related Objectives
Areas in which the employee agrees to take specific action to develop his or her skills, for example the goal of becoming proficient to a defined standard in the operation of a new computer system. Such objectives will be specific to each individual.
SMART Objectives
One of the simplest ways to improve accountability and reduce misunderstandings is to ensure objectives are clearly defined and measurable. Many businesses use the SMART framework to help structure employee objectives more consistently. Setting measurable objectives makes business decisions which are based on the results more secure.
SMART objectives are:
- Specific: about what has to be done and the expected end result
- Measurable: in terms of quality, quantity and time, wherever possible
- Achievable: realistic but challenging
- Realistic: in terms of resources available and factors within the appraisee’s control
- Timed: with an agreed and realistic time-scale or turnaround time
The number of objectives that are set will depend upon existing opportunities, the ability of the individual and the complexity and nature of the individual’s role. Too many objectives become unrealistic and unachievable.
Most importantly the objectives should be discussed and agreed with the employee, so they are fully committed to achieving the objectives.
When to Set Objectives
As employment continues, regular objectives and performance reviews can support accountability, employee development and business growth. Where performance concerns arise, capability procedures help employers manage situations more fairly, consistently and professionally.
Top Tip: Employees cannot usually be held accountable for expectations that were never clearly communicated.
New Employees
For new employees, objectives should be set as early in the probationary period as possible. A further set of objectives should then be set at the end of the probationary period and thereafter at the annual performance review meeting.
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Learn More About Probationary Periods |
Internal Transfers and Promotions
Individuals who move to a new position in the Company will have a new set of objectives set as early on in the new post as possible and thereafter at the annual performance review meeting.
All Other Employees
For all your other employees, objectives can be set annually as part of an annual review process, or you can set them as you go along so at the start of a project or new piece of work.
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Learn More About Performance Review Processes |
Why Unclear Objectives Create Problems
Unclear objectives can create significant operational and employee relations challenges for SMEs. Particularly where businesses rely on informal management processes, priorities change regularly or managers assumed employees understood what was required without properly discussing or documenting it.
This can lead to:
- conflicting priorities between managers or departments,
- inconsistent management expectations,
- confusion around responsibilities and standards,
- employee frustration and disengagement,
- performance misunderstandings, and
- capability disputes later if performance concerns escalate.
Where objectives are vague or constantly changing, employees may struggle to understand what success looks like within their role or how their performance is being measured. Managers may also become frustrated that expected standards are not being achieved, despite expectations never having been communicated clearly in the first place.
For SMEs, unclear objectives can also weaken performance management processes significantly. If concerns later develop into formal capability procedures, employers may find it difficult to demonstrate that expectations were reasonable, communicated consistently and supported by appropriate review discussions or documentation.
Many workplace disputes around performance arise not because employees refuse to perform, but because expectations were vague, changed frequently or were communicated inconsistently. Clear objectives help reduce this risk by providing employees and managers with a shared understanding of priorities, standards and expected outcomes.
Clear objectives help create greater consistency, accountability and fairness while reducing the likelihood of avoidable misunderstandings and performance disputes later.
Documentation And Accountability
The objectives should be recorded in writing. I like to ask the employee to write them up, this way you can be sure they have understood what you’ve agreed verbally.
Reviews
Setting objectives once and then failing to revisit them is one of the most common performance management mistakes SMEs make. Business priorities, workloads and responsibilities can change quickly and employees often need ongoing guidance, support and feedback to ensure objectives remain realistic, achievable, clearly understood and aligned with the needs of the business.
In many businesses, objectives are agreed at the start of employment or during an appraisal process but are then rarely discussed again until frustrations around performance have already developed.
Regular review meetings give managers and employees the opportunity to:
- monitor progress against agreed objectives,
- clarify changing priorities,
- identify potential problems earlier,
- provide support or additional training where needed,
- recognise achievements and development, and
- ensure expectations remain realistic and clearly understood.
Regular reviews also help create stronger accountability and documentation. Brief written records of objectives, progress discussions and agreed actions can help businesses demonstrate that expectations were communicated clearly and that employees were given appropriate guidance and opportunities to improve.
For SMEs, objective setting is usually most effective when treated as an ongoing management process rather than a one-off annual exercise.
Common Objective-Setting Mistakes SMEs Make
Objective setting is often approached informally within SMEs, particularly where managers are balancing operational pressures alongside people management responsibilities. However, unclear or poorly managed objectives can quickly create confusion, inconsistency and performance disputes.
Some of the most common objective-setting mistakes include:
- setting vague or unclear objectives,
- agreeing unrealistic deadlines or targets,
- changing expectations regularly without discussion,
- setting objectives that are disconnected from the employee’s actual role,
- failing to hold regular review meetings,
- poor documentation or limited written records,
- focusing only on problems rather than support and development, and
- inconsistent management approaches between managers or departments,
- failing to provide appropriate support or training, and
- setting objectives without clear timescales or measurable outcomes.
- assuming employees understand expectations without properly discussing them.
These issues can lead to frustration for both managers and employees, particularly where concerns about performance are only raised formally much later. In some cases, employees may feel expectations were unclear or constantly changing, while managers may become frustrated that standards are not being met.
Clear objectives, regular review discussions and consistent documentation help create greater accountability and reduce the likelihood of misunderstandings or capability disputes developing later.
Difficult Performance Conversations
Many performance issues within SMEs escalate gradually because concerns are not addressed early enough. Managers are often balancing operational pressures alongside people management responsibilities and may avoid difficult conversations in the hope that problems will improve naturally over time.
In practice, this can lead to situations where:
- expectations were never clearly clarified at the outset,
- feedback was informal or inconsistent,
- performance concerns were discussed verbally but never documented,
- employees received mixed messages from different managers, or
- formal review meetings were delayed until frustrations had already built up.
By the time formal capability procedures are considered, managers may feel performance problems have existed for months, while employees may believe concerns were never raised clearly or that they were not given fair opportunities to improve.
Regular objective setting and review discussions can help SMEs address concerns earlier, provide clearer feedback and reduce the likelihood of performance issues escalating into more formal employee relations problems later.
Objectives And Fair Capability Processes
Clear objective setting supports stronger and more effective performance management throughout the employment lifecycle. Objectives help establish expectations during recruitment, reinforce standards throughout probation periods and provide an ongoing framework for appraisals, supervision and performance reviews, while reducing the likelihood of misunderstandings, disputes and formal capability issues escalating later.
Capability procedures can become much harder to manage fairly and consistently where expectations were never clearly communicated, reviewed or documented. In many performance disputes, the underlying problem is not simply the employee’s performance, but the absence of clear objectives, regular feedback and consistent management throughout the employment relationship.
Where objectives are vague, constantly changing or unsupported by written records, employees may argue that they:
- Did not understand what was expected of them,
- Were measured against unclear standards,
- Received inconsistent feedback, or
- Were not given appropriate opportunities to improve.
For SMEs, this can create significant challenges if capability procedures later become necessary. Managers may feel performance concerns have existed for some time, but without documented objectives and regular review meetings with consistent feedback it can be difficult to demonstrate that concerns were raised appropriately and employees given fair opportunities to improve.
Regular review meetings and documented objectives can also help employers:
- Identify performance concerns earlier,
- Provide appropriate support and guidance,
- Monitor improvement consistently,
- Demonstrate fairness and reasonableness, and
- Create stronger documentation where capability procedures become necessary.
For SMEs, clear objectives and regular performance discussions often help resolve concerns earlier and reduce the likelihood of formal capability processes becoming necessary later.
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