Setting employee goals: Helpful tips and examples for your managers

Performance reviews can boost employee engagement and drive organizational success. But their effectiveness hinges on one critical element: employee goals.

Yet a surprising amount of employers are coming up short when it comes to setting employee goals, according to the 2023 Digital Work Trends Report from software development company Slingshot. The report, which surveyed 305 full-time American workers, made a disappointing declaration that many employees (34%) are just guessing about what the most important things are for them to be doing at work because they lack clear priorities.

By contrast, setting and tracking employee goals can be a catalyst for building company cultures of continuous improvement and employee development. To build those cultures, your managers need to treat goal setting as more than just another form to fill out, or box to check as part of the performance review process.

The importance of goal setting

Setting employee goals aids in employee development, and ultimately sets a business up to thrive because of:

• Performance alignment. Goals ensure that a team member is working toward the bigger picture. Additionally, striving to achieve shared company goals contributes to creating a unified team, which may improve retention. Research by Gartner shows that when employee goals are aligned to both organizational and employee needs, employee performance increases by up to 22%.
• Motivation and engagement. You’ve seen for yourself that it’s the truly motivated employees who excel and contribute meaningfully to the success of the company. Clear, achievable individual goals give employees that sense of purpose and direction, as well as a better understanding of how their work contributes to the bigger picture. Knowing that they’ve hit key milestones fuels employee confidence and job satisfaction, contributing to higher productivity and a positive work environment.
• Continuous improvement. Regular goal reviews identify areas for growth and encourage learning and new skill acquisition, and they aid in personal development. This adaptability is crucial in today’s rapidly changing business landscape.

A study conducted in 2021 within a sales team by business consulting firm BI Worldwide found employees who have goals are almost four times more likely to be committed to their organization and 14 times more likely to be inspired at work.

However, employee goal setting shouldn’t be a one-way street.

Leader-employee conversations

When they know what’s expected of them, people are more likely to perform at their best.

Two keys to effective goal setting are clarity of expectations and building trust with team members. During an episode of the HRMorning podcast “Voices of HR,” author, speaker and leader trainer Jason Lauritsen went into detail on those keys. He said that any one-on-one goal-setting conversations managers may be having with their people, either at the end of the year or the beginning of the year, should always be forward-leaning instead of looking back in retrospect.

“Pick whatever timeline – three months, six months, 12 months, whatever it is – that makes sense for that particular role. … You want to … involve the employee in … collaboratively sorting through what it’s going to look like … creating those goals or objectives together. … Talking those through and agreeing on what is a reasonable goal and why, and calibrating (and) prioritizing,” he said.

“Sometimes, that’s not an option. Sometimes your goals get passed down. (If) you’re in sales, ‘here’s your number.’ … Neither one of us have any influence over that necessarily. … OK, how are we going to get to that? That’s the number. Let’s break it down. And let’s talk about the strategies or the approaches. … Think about it in the way that you would set or approach any important goal with any other significant relationship in your life.”

Gallup found that employees whose managers involve them in goal setting are 3.6 times more likely than other employees to be engaged. However, only 30% of workers strongly agree that their manager involves them in goal setting.

As for the approximately 70% of managers who maybe aren’t seeking input from their employees, Lauritsen suggested they approach performance review employee goals like they would if they were planning a European vacation with a significant other.

“I wouldn’t show up and say, ‘We’re going to Europe, here’s what we need to do, here’s what you’re going do, here’s what they’re going do.’ And, ‘Good luck, let me know what you need.’ … That’s not how you do it in a relationship. You do it together. … Build a relationship, achieve clarity,” he said.

Tips for setting effective goals

We know the importance of goal setting and the specific and concrete benefits it can bring. But just how do managers go about setting effective goals so that they can be reached?

Create templates

If a manager has a large team, or several employees in similar development positions, developing templates of common goals for each level of development can be a time-saver. But these templates are a just a helpful starting point for employee goal setting because different roles and career stages require different goals. Managers still need to customize employee goals for each individual.

Use SMART goals

You may have heard of the SMART approach to writing employee goals. The SMART acronym is used to refer to goals that are:

• Specific. Be clear and concise, leaving no room for misinterpretation. Instead of an ambiguously broad goal to “improve communication,” aim for something with details – like “deliver concise and impactful presentations to senior management by Q3.”
• Measurable. Quantify your aspirations. Every goal needs a metric that allows for a fair assessment of progress. It could be a sales target, a skill acquisition benchmark or a customer satisfaction rating. Even something like “register to attend at least one conference” counts as something measurable.
• Achievable. To avoid setting anyone up for failure, goals should be challenging enough to spark motivation, yet attainable within a reasonable amount of time. Setting unrealistic goals breeds frustration and disengagement.
• Relevant. Goals need to resonate with both the individual and the organization. Ensure each goal aligns with both the employee’s career aspirations and the company’s strategic objectives. This creates a sense of shared purpose and ownership.
• Time-bound. Every goal needs a deadline, or a finishing point, which keeps focus sharp and momentum rolling. Define clear timelines and milestones to track progress and remember to celebrate achievements along the way.

While SMART is a tried-and-true framework, just keep in mind the unique strengths, weaknesses and aspirations that each individual is bringing to the table.

Set personal and professional goals

Why limit employee goals to mere performance metrics? There’s also a more holistic angle that can be taken – having employees define personal goals as well as professional development goals. Sometimes, these goals can overlap, such as a goal to improve soft skills. Goals can also include attending a training program or taking on a challenging project. Taking this approach can align what your people care about most with the company purpose and connect personal growth aspirations with career advancement, resulting in motivated employees with a renewed sense of purpose. It can improve employee engagement and individual performance.

Examples of employee performance goals

When coming up with performance goals – defined objectives for an employee to accomplish and feel successful as a result – the person’s accountability, productivity and job satisfaction all need to be taken into consideration.

Performance goals can help optimize responsibilities for each employee, and to possibly get started on charting a specific career path for them.

Here’s a small sample of employee goals that team members can start striving toward right now (remember, they need to be specifically tailored to the employee):

• Problem solving. If there are recurring challenges within a team, have them develop a process for resolution. When an effective solution is implemented, aim to address and mitigate an issue each quarter.
• Decision-making. If someone needs improvement on consistently presenting well-reasoned and data-supported recommendations for a specific business area, explore learning and development opportunities around data analytics or coaching on critically analyzing complex situations.
• People management. One possibility is implementing a mentorship program that fosters positive relationships and skill development among team members.
• Time management. To increase efficiency through better time utilization, you can set a goal like reducing the average project turnaround time by 15% through the implementation of time-tracking tools and improved task prioritization.
• Educational goals. If someone could stand to acquire a new skill relevant to their role, set a goal such as attending a certified training program, an online course or a webinar within the next six months.
• Learn how to use new software. What new tech tools are out there to help your teams do their jobs better – and not just AI?

When setting employee goals, don’t forget to take your specific industry into consideration – especially when choosing approaches or tools. For example, there’s a variety of highly touted time management strategies to explore, including time blocking, timeboxing, the Eisenhower Matrix, the Ivy Lee Method, PARA (Project, Area, Resource, Archive), and MIT. There are even more avenues when it comes to achieving educational goals: Premier Learning Solutions, Chegg Skills, Reforge, Section and Maven, just to name a few.

Tracking progress of employee goals

Setting employee goals is only meaningful if there’s some kind of performance management follow-up. Here are some effective techniques for evaluating and tracking goals:

• Key Performance Indicators (KPIs). Establish measurable KPIs and benchmarks tied to each goal and use data and metrics to objectively evaluate performance. Some organizations refer to them as Objectives and Key Results, or OKRs.
• Check-ins. Schedule periodic one-on-one meetings to discuss goal progress, offering guidance and support. Keep in mind that the traditional annual review is on its way out at more organizations, with increasing focus on continuous feedback and performance management.
• Documentation. Maintain clear records of goal definitions, progress and outcomes, and document discussions during goal-tracking meetings. Having a written record provides a valuable reference point, ensuring transparency and alignment throughout the process. Consider using performance management software for streamlined tracking and analysis and feedback loops.
• Feedback and recognition. When offering constructive feedback on achievements and areas for improvement, balance it with recognizing and celebrating milestones.
• Adjustment and flexibility. Because unexpected challenges come up and priorities change, be open to reasonably adjusting goals based on changing circumstances. Consider that just 21% of employees surveyed by Gallup strongly agree that they have performance metrics that are within their control.
• Structured performance reviews. Utilize scheduled performance reviews to assess progress, provide feedback, make course corrections and celebrate achievements. This is especially important if performance reviews are tied to promotions and compensation raises at your company.

And don’t forget to make time to acknowledge progress that’s been made to keep motivation levels high. Recognition drives future effort and reinforces a positive association with goal setting.

For the record

To protect your organization from lawsuits and scrutiny from the EEOC, employee goals and your performance evaluations need to be documented somehow to:

• provide a history of someone’s achievement of employee goals, or failure to improve performance, over time
• justify salary increases, decreases or why an employee received no raise, and
• support why an employee deserves a promotion or opportunity over other employees who are also eligible.

One example: The de Souza v. Planned Parenthood Federation of America, Inc. discrimination/retaliation case. An employee was fired for “poor performance … a lack of organization, failure to communicate timely, weak writing skills and a lack of sensitivity to DEI issues.” But there was no mention of any of those things in her performance reviews. It was one of the reasons why the court denied the employer’s motion to dismiss.

In the on-demand Premier Learning Solutions workshop “HR Documentation: Do’s and Don’ts of Documenting Employee Performance,” Margie Faulk, the compliance officer for HR Compliance Solutions LLC, warned HR pros that inconsistent documentation, or documentation that includes opinionated comments, that can be interpreted as bias, can lead to violations and fines.

When it comes to employee goals that lead to a promotion, she said it’s crucial to have documentation that essentially says, “This employee has X amount of experience, has other credentials and has different training, and that is why this employee deserves that promotion.” Faulk said that documentation can include, but isn’t limited to, emails that share significant, positive events with employees, such as when someone beats a quota or wins an award.

Faulk highlighted several performance evaluation/employee goals best practices, including:

• HR needs to preview all evaluation comments before meeting with a direct report
• Avoid blindsiding employees with surprises by discussing any performance issues before they see it in their performance evaluation
• Don’t save all negative issues for a once-a-year review
• Be consistent with the good and the not-so-good
• Ensure evaluations include examples of performance behaviors
• If reviews are held once or twice a year, add examples of specific work situations to the review file as they happen throughout the year
• Demonstrate equity with performance issues with both your high performers and the employees who challenge you
• Follow your employee handbook and company policies, and
• HR must check the final evaluation documentation for any problematic language (Pro tip: Keep it factual, avoiding too many adjectives or adverbs, or labeling the person).

Bottom line

By nurturing a goal-oriented culture, HR pros can unlock the full potential of their workforce, propelling individuals and organizations towards shared success. And when you think about it, investing the time and energy in setting and tracking strong employee goals is an investment in your organization’s future. By providing a clear roadmap for individual (and collective) success, you’ll unlock a level of motivation and development and turn performance reviews into drivers of growth and success.

For some fresh ideas on turning performance reviews into growth opportunities, be sure to attend the HRMorning webinar “How to Build High-Performance Teams: Blending Performance Management with Employee Growth” on Feb. 15 with Culture Amp Senior People Scientist Thaddeus Rada-Bayne. Click here for more information and to sign up.