MBO Examples to Kickstart Your Employee Engagement
When was the last time you thought to check-in on the goals you set for your employees? Even better, when is the last time you followed-through and actually turned that thought into action?
Never. If you aren’t employing a solid MBO program – and one that is automated, at that – then your answer is probably close to never.
While your situation might not be that extreme, the point is we often take employee engagement and motivation for granted. We go through great pains ensuring we hire “good-fit” candidates we think will be happy working for us, and we fight like mad to help improve morale when their work or attitudes go south—but too frequently, there is no in-between.
So, hopefully these MBO examples can get you going in the right direction. If nothing else, they should help you visualize how goals might differ by industry and role, whether it’s in sales, marketing, or manufacturing, and how successful companies go through the process of making goals work for their people and their organization—and not against them.
With 70% of employees not fully engaged (according to a recent study), that means nearly three out of four of your people in the group of cubicles down the way are more or less “checked out”—with about two of four of them simply not enjoying their work.
We need to be doing more.
Meaning, we need to do more than sleepwalk through the traditional activity of “goal setting.” We have all been involved in far too many conversations about goals, setting what might actually be some pretty good ones, only to virtually flush them down the toilet by not tracking progress or ever talking about them again—until it’s too late.
Anyway, perhaps that’s why you’re here. You already know the traditional method of coming up with and tracking goals is manual and cumbersome. You know nothing screams excitement more than dusting off a static word document or spreadsheet in order to revisit goals set six months or even a year prior. You know your goals need to be SMART-er (Specific, Measurable, Achievable, Relevant, and Timely), and that the process needs to be automated to ensure maximum visibility and buy-in.
There’s no question cloud computing is growing fast, and is extremely competitive. Thus, customers expect immediacy and perfection, and that their providers are up to date with the absolute latest and greatest. As a result, you might see a traditional organizational goal for those in software sales stated as something like “Sell 1,000 units of new product.” Fair enough.
Now, think about it. As a manager, if you stopped right there, what percent chance of success would you put on your people achieving that goal? With such a general statement, how could you know? Where do you even begin other than giving the directive to “sell more”?
In an MBO program, the organizational goal is translated into a personalized objective, and attached to the MBO bonus—which can only happen when manager and employee collaborate and set the goal together. During such a discussion, you’ll probably talk about what needs to happen first in order to enable the team to sell the new product. One action item could be that reps need to learn about the new product themselves in order to pitch it. Another might be letting existing accounts know the new product has launched, and so on. And, because you should be setting SMART goals, the following questions would need to be answered:
- Which specific accounts should reps be educating?
- How many of their accounts need to be educated?
- Why is educating accounts on the new product important?
- What is the deadline for educating the accounts? Are there different goal stages?
After all of that, you might be left with a personal objective of: “Educate ten tier-one accounts on new product by 9/30/16 and another ten by 10/31/16 to help increase awareness, and next quarter sales.” In reward for meeting that goal, the rep might be compensated $3,000, or maybe even $1,500 for completing the first half, and $1,500 for the second.
How does this goal stack up against commonly-held MBO principles?
- Have you translated an organizational goal to an employee objective? Yes.
- Is the goal specific, measurable, achievable, relevant, and time-sensitive? Yes.
- Did the employee participate in setting the goal? Yes.
As you can see, an MBO program is more than a manager setting goals for their employees. It is manager and employee working together to break those goals down into smaller objectives. And, if you had an automated system in place, as employees set out to meet their goals, they could have visibility into how their related compensation would be impacted for meeting or missing goals—encouraging and motivating successful behavior in real-time.
An MBO program is a great tool for driving the behavior of non-sales-related activities, too. For instance, those in digital or online marketing are tasked with something along the lines of increasing site traffic, conversions, etc. A broader organizational goal in this regard could be something like “Increase brand authority and become an industry influencer.” Putting that goal in MBO form could look like:
Joe Smith; Q3 2016; Target: $3,000
Goal: Publish 30 blogs that demonstrate our authority/status as industry leader by 10/31/16.
-Brainstorm list of 50 blog topic possibilities by 8/15/16 (10%, $300)
-Schedule 30 blog topics by 8/31/16 (10%, $300)
-Publish 15 Blog Posts by 9/31/16 (40%, $1,200)
-Publish 15 Blog Posts by 10/31/16 (40%, $1,200
Again, an MBO system requires you really understand the scope of employee responsibilities, and which goals will positively impact the company the most. For an engineer, maybe it’s something around attaining X hours of personal development each quarter (to support the organizational goal of staying on the cutting edge of the industry), or finding and correcting 10 product bugs (to support the organizational goal of providing a flawless user experience).
Whatever the goal, think about rewarding the right behavior, though. If you’re paying by bugs found and fixed, bugs will be found and fixed—no matter how significant or resource-intensive those bugs might be. Employees go to great lengths to achieve bonus compensation, which is great when you’re rewarding the right behavior, but detrimental if not thought through completely.
Thanks to complex buying cycles and manufacturing processes, success here depends on leveraging data for the identification of new opportunities, and then mobilizing teams to meet new market and technology demands. MBO examples might center around international OSHA laws, return management, productivity improvement, or employee training.
Many business leaders are utilizing automated MBO solutions as tools to reach goals like surveying sustainable manufacturing—motivating, and rewarding their teams to produce less waste and emit fewer greenhouse gases during manufacturing.
Pharmaceutical Sales MBO Examples
Talk about a juggling act—regulation, generic competition, constraints of costs, health care reform, and more are all challenges those in pharmaceuticals need to overcome. Thus, measurable goals on things like appointments set each month, doctors talked to each week, and quantity of product sold within a given period are all suitable examples that will help each individual contribute to the greater organizational goals. Employee performance management software can assist in mitigating the risk of losing critical data about events and documents, while allowing you to easily follow the audit trail.
With all of these examples of MBO, the visibility an automated solution provides allows managers to easily see how well employees are performing on agreed-upon goals. And, giving employees a simple way to see how their objectives are tied to their bonuses – and being able to pay them immediately after period close – has a significant impact on performance and company culture.
From there, employees are inspired to do their best work—and their part in helping meet the larger goals of the company.
Designing Sales Compensation Plans
With careful consideration and strategic design, you can use incentive compensation to inspire your teams and empower them to perform above and beyond the competition.