A Guide to Setting Employee Performance Goals

Setting goals is an important activity in any area of life. Whenever we decide we want to improve at something or overcome a challenge, setting goals helps us see how we’ll make it happen.

Any organization with growth ambitions needs to have the same philosophy. Every employee has to focus on work that moves the needle. But to do so, they need to know—without a doubt—what they’re striving to achieve. That’s where performance goals come in. 

What are performance goals?

Using performance goals, organizations set clear objectives for employees. The goals align with their skills and experience and are achievable based on the tasks and responsibilities outlined in their job description.

An employee’s performance goals should also be an extension of a larger group of objectives their team is focused on achieving. The collective contributions of each team member result in departmental goals being met, which in turn, positively impacts organizational goals. 

Once performance goals are set, managers are responsible for monitoring their direct reports’ progress. They should use appropriate metrics to measure performance and meet with their team members regularly to discuss priorities and challenges. Managers should also document performance milestones of the employees they oversee so they have a record to consult when it is time to complete formal evaluations. 

Why are performance goals important?

Setting performance goals for every employee is crucial to creating a comprehensive organizational strategy. Goals define the exact role each employee will play in the organization’s success, increasing the likelihood revenue and other growth targets are met. Let’s review the specific advantages performance-focused objectives offer to employers:

  • Employees deliver impactful work – Everything they do is aimed at accomplishing their goals. 
  • Job success is objective – You can applaud your top performers and help underperformers get back on track
  • Managers effectively lead their teams – They’re able to assign relevant tasks and deliver specific feedback based on performance.
  • Workforce planning is simplified – Leaders identify gaps in their teams and hire based on need. 

Performance goals mean every employee has a purpose. They understand what they need to focus on and get motivated to hit their targets. Let’s explore the specific advantages performance goals bring to individual employees:

  • Their expectations are clear – Employees are never unsure what they’re supposed to work on or if they’re succeeding in their role. 
  • They see their work pay off – Team members can look back and see how accomplishing their goals contributed to larger objectives being met. 
  • They feel a sense of accomplishment – Meeting a goal results in personal fulfillment and a desire to reach even greater objectives. 
  • They receive relevant feedback – Managers provide feedback that resonates with employees because it aligns with what they’re trying to accomplish. 
  • They can work autonomously – Great organizations give employees the freedom to work toward their goals as they set fit. 
  • They have a career development path – Employees who constantly met their performance goals show they’re capable of taking on more responsibility in a higher-level role. 

Setting employee performance goals is a no brainer for any organization with long-term growth plans. Employees come to work laser-focused on tasks and projects that incrementally propel their team forward. 

How to set performance goals

If you want to bring the benefits of performance goals to your organization, you need to take the right approach. In fact, performance goals can do more harm than good when they’re incorrectly defined and implemented. Employees get confused and frustrated when they’re not exactly sure what they’re being asked to deliver. Some may even have a different interpretation of their goals than their manager, which can end up hurting their performance and job satisfaction. 

The SMART goal method was designed to remove the pitfalls typically associated with goal setting. Let’s review each letter that makes up the acronym so you learn how to set employee goals that are understood by every stakeholder:

  • Specific – Goals must always have defined outcomes. The employee needs to understand exactly what they’re being asked to accomplish. 
  • Measurable – Goals must be quantifiable so success is indisputable. We also recommend tying KPIs to goals so an employee’s progress is measurable.
  • Achievable – Goals have to be realistic so employees are willing to buy-in. That said, setting slightly ambitious goals stimulates motivation
  • Relevant – Goals must be appropriate for the employee’s role. They should be able to envision how they’ll accomplish their performance objectives using their skills, knowledge, and experience.
  • Timely – And finally, goals need to come with deadlines. Like the achievable component, deadlines should be tight but not unreasonable. 

If your performance goals check those five boxes, you’ll likely find that every member of your workforce has a crystal-clear understanding of what they’re being asked to achieve.   

Other tips for setting performance goals

Following the SMART goal method is an effective way to clearly-define performance objectives. However, you don’t just want employees to understand their goals. You want them to be enthusiastic about what they’re being asked to accomplish.  We’ll conclude with a few tips for setting performance goals every employee is happy to commit to. 

Encourage managers to consult their employees

It never hurts to make goal-setting a collaborative exercise between managers and employees. While managers will need to assign certain objectives, they should still be receptive to the employee’s questions and feedback. They might find an individual’s goals can be adjusted to better align with the team’s strategy. These discussions also provide the opportunity to define the KPIs that will be used to measure the employee’s progress.

Once the baseline performance goals are agreed on, employees should be encouraged to set their own goals. The manager can present the team’s objectives and the employee can share how their talents can be used to drive progress. The simple act of involving team members in strategic planning helps them see the big picture and get excited to deliver outstanding results. 

Adjust goals as necessary

Performance goals should never be set in stone. As the employee gets to work on their long-term objectives, new challenges will emerge and priorities will shift. You want employees to take changes in stride so be willing to push back deadlines or even redefine goals.

You’ll also find some employees are on pace to accomplish their performance goals with time to spare. In these cases, acknowledge their stellar performance and revise their goal. Ensure their targets are always a little ambitious so they stay motivated and productive. 

Use performance goals as the foundation for employee reviews

Employees’ long-term objectives should be used as the basis for their performance reviews. Instead of asking managers to rate direct reports on a series of vague competencies, evaluate the outcomes of their goals. Managers should also consult the performance-related notes they’ve been documenting so an employee’s evaluation accounts for all their wins during the review period. 

Performance evaluation meetings provide the opportunity to review all the employee’s goals and the approach they took to accomplish them. Managers can go through the goals that weren’t met and share what they believe the employee could have done differently. They should also acknowledge the great effort the employee made to achieve the goals that were met. 

Create a goal-oriented culture

Accomplishing goals doesn’t just stimulate meaningful productivity. It has a positive impact on employee engagement. An employee feels good when they continuously hit their targets and grow to derive satisfaction for the act of doing their job. 

So why stop with just performance goals? Encourage employees to use SMART goals for everything they do. Ask them to go through the process of defining quantifiable, time-bound objectives at the start of a new project. Every team member should always have a clear idea of what they want their work to result in. 

You can also align performance goals with an employee’s career development goals. They can meet with their manager and share the skills they would like to develop and the challenges they hope to take on. Both parties can then create a professional development plan the employee can carry out through the experiences they have in the workplace.  

Experience the benefits of performance goals

Is your organization ready to implement employee performance goals? Trakstar is an online performance management solution that helps employers set and track goals across the organization. Cascade organizational and departmental goals down to individual employees and tailor performance objectives to their role on the team. To learn more, request a life demo today!