A recession is almost upon us and goal setting is one topic that you'll have to think hard on. Especially since inflation continues to rise year on year. This tip of the week will help you set specific and measurable goals for your teams during this economic downturn.

Do you struggle to find the right kinds of goals for your staff?

The best goals are not easily achieved, but also are not so tough that they are unreachable. Here are some ideas for goal-setting:

1. Annual targets alone are too distant to be much good as a motivator or as a measurement of performance. Monthly goals are more effective because evaluation is more imminent. Of course, it takes more time to set specific, measurable, and achievable monthly goals, but doing so is worth the extra effort.
2. It may sound obvious, but goals must be specific and measurable. An example of a non-specific goal follows:

   "The Collection Specialist will work closely with customers and salespeople to ensure that past due balances are addressed promptly and cleared as quickly as possible."

   A specific, measurable goal would be as follows:

   "The Collection Specialist will reduce the balance over 90 days past due to $25,000 or less by May 15, 201x and then he/she will maintain it at or below that level until this goal is amended with the approval of the Credit Manager."

3. A list of goals that sit on someone's desk is useless. As a credit manager, you should meet on a regular basis with your staff to review their progress. It should be the staffer's responsibility to prepare for that meeting by gathering the statistics and information necessary to document their efforts and achievements. This helps them be more engaged and take ownership in the process.
   
   
4. Remember to award superior performers. It is likely that your best employee out-produces your weakest employee by a ratio of as much as two to one. When it comes to rewards, financial and other, make certain that your top performers get the lion's share of whatever you as a manager have to offer to them.
   
   
5. You can also make goals important by making certain that everyone realizes that there are consequences for not reaching the goals that have been established with and for them. Specifically, substandard employees who consistently fail to reach the goals should be terminated. To do otherwise risks alienating your better employees, or worse, causing your best employees to decrease their efforts in order to reduce the disparity between their performance and the work done by the substandard employee.

Goal setting is tough sometimes and it's not a cure-all for the myriad of problems that you face. However, unless you establish stretch goals for your employees they are unlikely to stretch on their own.

For more information, here's a 20-minute video on measuring the effectiveness and efficiency of credit and collections teams