The unilateral setting of objectives by the employer must meet strict conditions. Indeed, the employer is obliged to set objectives, called "SMART", specific, measurable, achievable, relevant, and time bound. In addition, they must be brought to the attention of the employee at the beginning of the year.
How to fulfill the conditions for a unilateral setting of objectives by the company? What role does the manager have in the communication needed for their setting? In this article, a reflection on the power of the company in terms of setting objectives and the importance of the managerial exercise associated with.
1) THE COMPANY IS THE ONLY DECISION-MAKER OF THE EXPECTED PERFORMANCE LEVEL
The expected level of performance is set unilaterally by the company
In setting objectives, there are two main concepts to take into account: the legal obligations of the employer on the one hand and the goal in terms of performance and motivation on the other hand. Indeed, if we want the objectives to generate motivation, these must be established in a thoughtful way.
A manager setting himself a goal unilaterally, without discussing it with his collaborator, may not succeed in making him adhere to the project of the company. In addition, a collaborator who is simply imposed goals without prior communication and discussion, may consider these goals as unfair and therefore will not seek performance.
Nevertheless, it is necessary to remember that it is the company, and it alone, that decides the expected level of performance. It is required to comply with the legal framework for setting objectives, notably by proposing SMART objectives, but is under no circumstances obliged to have them validated contractually by the employees.
Too high goals are a source of demotivation among employees
Although the company has the right to set high goals, without the formal agreement of the employee, it has no interest in doing so. Indeed, employees whose goals are clearly unrealistic, will have no motivation to produce performance, quite the contrary. Too high goals, decided unilaterally, without any discussion with the employee, are the best way to put a stop to his search for performance. Thus, the company is clearly the only decision-maker in the choice of objectives and the expected level of performance, however, it does not have to ignore the crucial stage of discussion and exchange with employees that we want to motivate.
2) A PROPERLY FIXED OBJECTIVE IS NOT NEGOTIABLE BY EMPLOYEE
Allowing employees to negotiate their goals individually is an unfair practice that favors the best negotiators do the detriment of the worst.
A certain number of employees think that an objective can be negotiable, which is not the case theoretically. If it is properly fixed, it is not negotiable.
For this fixation will be used a maximum of factual elements: sales history, sectorization, growth.
The manager must discuss the objective set with the collaborator, and in particular, explain to him what tools are available to reach him. The employee can therefore claim additional resources to help achieve the expected level of performance, but in any case, the negotiation cannot be done on the goal itself.
Targets that can be individually negotiated are completely unfair. If a salesman proves to be a very good negotiator, he will have no difficulty negotiating his objectives downward. Therefore, if he reaches or exceeds them, he will earn more money than another collaborator, who will not be able to negotiate them. In the end, these two salespeople will have achieved the same performance, but evaluated by different objectives.
A system where the objectives could be negotiable, is therefore not coherent. Indeed, instead of rewarding the performance of each, it would reward their individual ability to negotiate. As a result, the expected objectives cannot be negotiated.
The importance of managerial exercise in the objectives setting.
The manager must be able to explain why such goals have been set and the means available to reach them. In addition, any increase in the expected level of performance must be justified, if only to make employees adhere to their new objectives. For example, an increase in the level of objectives can result from the choice of the manager to provide more qualified leads to his sales people, to compensate for an additional investment or to invest on a collaborator while waiting for a return on investment.
3) INCENTIVE COMPENSATION MUST RESPECT THE PRINCIPLE OF EQUAL TREATMENT WITHIN THE EMPLOYEES
An employee may get a variable pay representing 15% of his total salary, while for another, it will only weigh 10%. The proportion that the variable pay will represent on the total salary of an employee is left to the company decision. However, this case-by-case approach invites the question of the notion of equity. A situation where two sales people do not have the same level of variable pay while they have similar profiles, an identical position, with equal fixed salary, is really question mark. The notion of equity of treatment between employees requires the employer to ensure equal pay for all employees who are placed in an identical work situation.
In order for two employees to be compared with each other, they must necessarily occupy identical functions, have the same theoretical training and the same level of professional experience. Otherwise, the comparison between these two employees would be fortuitous and impossible because they are not in similar situations. Therefore, if you want to differentiate compensation between two employees, one junior profile and the other with a more experienced profile, you have the right to do so because their situations are different.