Objectives setting and appraisal: Setting Up Goals
An integral part of SAP ERP HCM Consultants duties is to guide and direct the Human Resources Management within our organization and equip them with the right principles and techniques of setting up efficient and productive goals which will suit the organizational objectives.
The purposes of this blog are:
- Provide useful information about setting goals and objectives for all the hierarchical levels
- Provide useful technical tips for setting up goals and objectives
SAP ERP HCM has several solutions of Employee’s Performance Evaluation: the most common ones these days are:
- OSA – Objective Setting and Appraisals, of SAP ERP HCM
- Performance & Goals solution of SuccessFactors
Here are some tips for setting up goals:
The goals need to be set up by planning meetings for each organizational level. The process usually starts at the beginning of the calendric year on the organizational and departmental levels.
The goals setting process is both top-down and bottom-up:
- Top-down: The main goals are being determined on the board level and trickled down to the lower levels: Upper Management >> Departments >> Teams >> Employees.
- Bottom-up: the goals in each organizational level are being composed together by the planning meetings: the employees and managers start a process of setting individual objectives, which align with organizational and departmental goals.
Most organizations usually determine up to five key objectives, which the employees can focus on effectively.
The total weight of all objectives must sum up to 100%. The weights help the employees to know which objectives are with higher priority compared to others, and will have more influence on their total grade at the end of the appraisal process.
Goals must be set up for short term and long tern:
- Short term goals: Are based on the department’s most updated outcomes.
- Long term goals: Are based on the skills and abilities employees can achieve and develop for a long period of time.
Goals setting principles:
Each goal and objective should meet the following five principles, known as the SMART principles:
- S for Specific: the goals must be precise and as clear as possible
- M for Measurable: each goals can be measured and evaluated objectively
- A for Achievable: the employee is responsible for achieving the goals and he/she can affect it
- R for Realistic: the goals should be practical and attainable.
- T for Time bound: each goal has to be achieved in a pre-defined time limit.
Useful information about Objective setting/evaluating using OSA system:
- Appraisal Statuses:
- The goals setting phase usually is done in the “In Planning” status (status num. 2). In this phase, the employee and/or the manager determine the employee’s individual objectives.
- The review can be done on different hierarchical levels (such as direct and indirect managers). This is done by scheduling meetings between the appraiser and appraisee (these meetings are very important events in the setting goals and objectives process).
The manager should make sure that the objectives, which the employee has set, are:
– Realistic and measurable (fulfill the SMART principles)
– Meet with the organizational and departmental goals
– The employee makes an efficient use of the available resources, in order to achieve his/her objectives.
Changes, if necessary, can be done during the “In Review” status (status num. 3). You can skip this phase by switching on the indicator “No Review Phase” on the Processing Tab within the appraisal template.
- An optional phase, which is very recommended, is to set Mid-Year Review Meetings, in which the manager will review the employee’s performance in respect of the objectives set at the beginning of the year. This step is quite important because the business terms, assumptions, responsibilities and priorities, which were made a few months before, could have been changed and therefore the organization must adjust itself to these changes.
- Objectives Column:
If you activated the Objectives column in your appraisal template, the appraisers will be able to pre-define the employee’s goals and objectives, add new goals, delete goals, add free text and assign a weighting-scale for each goal. In addition, by using enhancement we can update goals from the requirements profile of the position and/or the job.
- You can add a link to the appraisal document of the appraisee’s own objectives for the previous year. This is done by implementing a standard BAdI.
- Fixed/Free enhancement: the appraiser can update objectives from the requirements profile of the job or position assigned to the employee, based on the qualifications catalog.
- Special Features:
- We can prevent a situation that an employee can be both an appraiser and an appraisee in the same document. This is done by switching on the indicator “Self-Appraisal Not Allowed” on the Processing tab within the appraisal template.
- Anonymous appraisal is a special feature of the OSA system, but it is not relevant when our appraisal process includes objectives setting – in that case we must specify explicitly the participant in the process.
- Appraisal Document Creation Check: this feature, which is determined in the Processing tab, determines if we can create more than one appraisal document for a single appraisee on a specified period. Usually, when we set up objectives, we will choose the option “Only One Appraisal Document”.
- Part Appraisers: for 3600 appraisal process there is no limit of the number of part appraisers. However, when we choose an objectives setting appraisal process, we are limited only to several part appraisers (20 minus the number of the other columns, divided by the number of part appraisers).
- Cascading Goals: from EHP4 it is possible to set up goals for each hierarchical level (organization, division, department, team etc.) and eventually cascade them downward the hierarchy. For more information please read the following link.
- Integration with LSO: As part of the appraisal process it is possible for the appraiser to determine mandatory courses for the employee as special objectives. For more information, please read the following link.
Senior SAP ERP HCM Consultant
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