Goals and plan facilitate employees’ identification with the organization and help motivate them by reducing uncertainty and clarifying what they should accomplish. At Boeing the manufacturing department has a goal of moving a plane, once the wings and landing gear are attached along the assembly line and out of the door in only five days. Managers are revising processes and procedures mechanics are coming with innovative machine adjustments and assembly line workers are trying new techniques to meet these machine adjustments and assembly line workers are trying new techniques to meet this ambitious goal. Lack of a clear goal can damage employee motivation and commitment because people don’t understand what they are working towards. Whereas a goal provides the why of an organization or subunit’s existence, plans tells the how. A plan lets employees know what actions to undertake to achieve the goal.
Goals helps managers decide where they need to allocate resources such as employees’ money, and equipment. For example, DuPont has a goal of generating 25 per cent of revenues from renewable resources by 2010 (up from 14 per cent in 2003). This goal lets managers know they need to use resources to develop renewable and biodegradable materials, acquire businesses that produce products with renewable resources, and buy equipment that reduces waste, emissions and energy usage. As another example, due to new goals of fighting domestic terrorism the Federal Bureau of Investigation (FBI) has pulled more than 600 agents of their regular beats and reassigned them to terrorists related cases. The FBI is also allocating resources to rebuild an archaic computer network, open foreign offices, and form terrorism task forces.
Guides to action:
Goals and plans provide a sense of direction. They focus attention on specific targets and direct employee efforts towards important outcomes. Hartford Technology Services Co, for example set goals to establish a customer profile database, survey customer satisfaction and secure service agreements with ten new customers.
Rationale for decisions:
Through goal setting and planning, managers learn what the organization is trying to accomplish. They can make decisions to ensure that internal policies, roles, performance, structure, products and expenditures will be made in accordance with desired outcomes. Decisions throughout the organization will be in alignment with the plan.
Standards of performance:
Because goals define desired outcomes for the organization they also serve as performance criteria. They provided a standard of assessment. If an organization wishes to grow by 15 per cent and the actual growth is 17 per cent, managers will have exceeded their persevered.
The following example illustrates how goals and plan serve these important purposes:
Chevrolet may have ruled the roads back in the 1960s and 1970s but in recent year its sales have lagged. In late 2003, General Motors managers announced that the company will launch 10 new Chevrolet vehicles over 20 months to reach its goal of boosting US sales to 3 million vehicles a year, a level Chevy hasn’t achieved since 1979. That’s a 15 percent increase over 2003 levels, an ambitious target that required everyone in the company to focus on the goal.
Employees throughout the company are striving to meet lower level targets that will help the company achieve its overall objective. Dealers too, are motivated by the stretch goal laid out in a plane called Road to 3 Million. Managers are pumping resources into design and engineering advertising and dealer incentives. Dealers can win trips and other prizes if they hit their targets. A new edgy multimillion dollar ad campaign tag line. An American Revolution focuses on the cars and trucks but tries to give potential customers a freedom and attitude. Managers and employees are also looking for alternative ways to reach new market. Every decision at Chevrolet today is made with the goal of selling 3 million vehicles a year in mind.
Source: New Era Management