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In order to achieve objectives, there are some characteristics of best practices and supporting systems.  You want objective setting that:

1. Cascades objectives (strategic alignment)

Ideally the people in your organization should have easy ways to set objectives up that are designed to contribute directly to higher order objectives set by the management structure above them.

2. Encourages collaboration (strategic alignment and motivation)

Getting people to understand not only their own objectives, but other people’s objectives and how they interrelate can only help people to better align their efforts with everyone – not just with their managers, but with their peers and any people they manage.  People learn and invent best through a combination of solo work and collaboration. So don’t let objectives be just un-shared lists of things between a manager and an employee.

3. Promotes a state of flow (motivation)

Define challenges, remove anxiety, and get people into a focused state where achieving the objectives is self-rewarding, time disappears and they are focused on doing it well.

4. Encourages autonomy, mastery and purpose (motivation)

People work better when they’re bought are enthusiastic about their work.  Allow them to understand the craft of their job and how to aim to master it.  Help them understand their purpose via the company objectives, and collaborate with them on their own objectives in a way that really helps them have ownership in the ideas and a sense of autonomy.

5. Re-evaluates the priority of objectives frequently (strategic alignment)

I think that people frequently make the mistake of setting objectives and then leaving them in place until they’re either done or it’s the end of the year.  This isn’t nearly frequent enough.  Things changes.  Think about reviewing objectives in a more agile fashion.  How about every two weeks?  Once a month?  If you find that longer term objectives tend to not get met in your organization but there are always “good reasons” for that because something else came up that everyone agreed was more important, then it might be that the right actions are happening in spite of your objective setting rather than because of it.  Making your business better is an empirical process.  It’s research and development in essence, not manufacturing.  Do what seems right, evaluate the results, choose what to do from there.  Do it frequently enough that you are really steering your organization, not lashing the steering wheel into place and hoping for no ice bergs.

Reference Kevin Coe on Quora