Setting clear and direct goals for your employees is beneficial for your company and your staff.
A critical responsibility for any business owner or manager is setting goals. This includes the task of setting performance or development goals for your team. The best type of employee performance goals tie back to your company's overall organizational goals.
What are performance goals, and why are performance review goals important?
Performance goals detail what is expected from each employee and are the short-term and long-term objectives employees need to meet. Along with performance goals, employee performance review goals can have various benefits:
- They can help improve your company's bottom line.
- They can boost employees' morale with a sense of purpose and accomplishment.
- They help your company retain employees, because your team members will feel accomplished and have higher job satisfaction when they achieve their performance goals.
- They boost employee engagement by giving employees something to strive for.
- They boost productivity by giving employees a clear picture of what's expected of them, rather than making them guess and go through their daily tasks without a clear path to success.
- They keep motivation high as employees gain positive feedback from managers.
Further, consider these statistics from Clear Review that affirm the importance of meaningful employee reward systems:
- 83% of employees in companies with strong reward and recognition systems say they are content in their position.
- 69% of employees work harder if they know their work is valued and appreciated.
- Businesses that implement strong reward structures see an almost 50% rise in employee engagement.
Performance goal examples
You can set various types of performance goals for your staff. Of course, some of these employee performance goals are more measurable than others (with the right tools). Here are some of the easier ones to measure.
For the short term, a productivity goal for a sales manager may be calling 150 leads in one week. For the long term, a performance goal sample could be boarding 500 new leads in a year.
In a short term such as one month, a public relations campaign may generate 10,000 impressions. In a long term such as one year, 1,000 of those impressions would become new customers. If the campaign is run on Facebook, Facebook Ads Manager will make it easy to track its performance metrics.
In the short term (three months), a candle-making company may be able to achieve the goal of making its candles 50% organic by sourcing cost-effective ingredients so it doesn't have to raise prices. In the long term (one year), going 100% organic while keeping prices the same could be another goal.
Consider the resources your employees may need to achieve these goals. In this example, they would need to rely on outside vendors, who may have poor communication with them due to language barriers and conflicting time zones. You may also need to factor in a testing period to ensure you can still make a quality product with the new ingredients.
Service quality and timeliness
Instead of assisting 10 customers in one hour, you could implement a new process that improves your staff's knowledge and efficiency, raising that number to 20 without sacrificing any quality in service. Set an actionable timeframe to let employees know when they will need to be able to assist the 20 customers. Depending on the amount of training required, this may be achievable within six months.
A receptionist who is responsible for filing more than 50 documents a month may feel so overwhelmed between answering phone calls and keeping the office stocked that they let filing fall through the cracks. A short-term organization goal for them may be to file 50 documents in alphabetical order over three months. A long-term goal may be to scan and load 100 documents onto the company's secure cloud server over the course of one year.
Who is responsible for setting performance goals?
Business owners and managers are responsible for setting performance goals for their staff. However, everyone is responsible for setting their own performance goals to stay motivated, feel fulfilled in their job, and make a positive difference in the company's bottom line. The goals employees set for themselves don't need to be evaluated to be effective.
It is important to note that performance goals and development goals are two different things. Performance goals are different from development goals in that, as noted by Indeed, "performance goals are what employees work to achieve. They are based on the goals and priorities of an organization and are tied to specific job positions. They focus on the job duties and productivity of an employee, and are designed to integrate an employee's achievement with the overall goals of the company."
Step-by-step instructions: How to set and write performance goals
Indeed advises connecting your company's overall objectives to performance goals, inviting employees to participate in goal setting, using SMART goals, and tracking and periodically updating goals.
1. Review your overall company objectives and share them with staff.
Every company should have a business plan, or at least an outline of short-term and long-term company objectives. Your overall company objectives and performance goals that follow can be written formally or informally, and as long or short as necessary.
Some companies write company objectives in a formal structure similar to a book report and then email or print a copy for each employee. What's most important is keeping your business plan and goals in a secure digital file so that you can easily make edits as needed. In addition, your company objectives should include strategies that are broken down into clear and actionable tactics. Use white space, headings, and a clear font such as Arial or Calibri for easy reading. Play around with bold and italic font faces to further break up content.
2. Get employees involved.
Encourage your employees to contribute to your company's overall and granular performance goals. Take time to sit privately with each team member, asking them about their individual goals and the performance metrics they feel would be applicable for tracking them. When you involve your employees in goal setting, they may be able to identify challenges you missed, will feel like their voices are heard, and be more motivated to achieve their goals. It can also help you learn which employees are not engaged and need training or coaching.
3. Use SMART goals.
The SMART goal action plan is an effective tool for setting and writing performance goals. SMART is an acronym for "specific, measurable, achievable, relevant and time-bound."
- Specific: Lay out what the performance goals are, when they are to be achieved, and by whom. Make them simple to understand.
- Measurable: Without performance metrics, tracking each goal's success is going to be difficult. Performance metrics offer insight into what is working and what is not, putting meaning into goals and empowering employees when they see what they've achieved.
- Achievable: While it's great to think big, setting goals that are not achievable can hurt employee morale and cause frustration. Consider breaking them down into smaller goals that can be achieved over a longer period of time. Attainable goals are key.
- Relevant: The best company goals center on your company's main objectives. The R in SMART can also stand for "reasonable," "realistic," "resourced" or "results-based."
- Time-bound: Lay out the specific timeframe in which each goal should be achieved, such as one week, one month, six months, one year or five years. Setting a very short timeframe, such as one day, may not be helpful; remember the importance of being realistic.
How to measure employee performance
The performance metrics you should track depend on the goals you set; performance evaluation varies by goal. These are some suggestions from The Hartford:
Graphic ratings scales
This method is a clear and easy way for employees to review their goals. It uses numbers to rate performance, typically on a scale of 1-5 or 1-10.
This system utilizes a group of people's opinions and assessments of each employee. The group, such as a team of managers, must closely work with each employee in order to accurately speak about their performance.
Evaluating their own performance can be an eye-opening experience for employees, and you may even find that their evaluations are tougher than yours would be. An easy and free way to administer a self-evaluation is via Google Form. Questions can be open-ended, multiple-choice or both.
Management by objectives (MBO)
MBO is also called "management by results." This employee performance metric entails employees and managers forming objectives together to determine how individual goals align with the company's overall goals.
A checklist can also be administered as a Google Form. Checklists make measuring and tracking employee performance quick and easy, because they entail questions with yes-or-no answers.
Performance evaluation software
Employee evaluation software can help you track time spent on projects and keep employees accountable and on track for achieving their goals on a daily basis. In addition, when conducting performance appraisals, you will have a more tangible record of each employee's efforts. These are some performance evaluation programs to consider:
This is a flexible solution that offers performance reviews, goal management, continuous and 360-degree feedback, and easy-to-read reports. This software makes setting goals, offering employee feedback and managing performance reviews a seamless process. A demo is available, and the software starts at $4 to $7 per month per employee for the Professional package. An Enterprise package is also available, but you'd need to contact a rep for pricing. Companies that use PerformYard include the Colorado Health Foundation, J2 Interactive, InvestiNet, Spoor Bunch Franz and Five-Star Technology Solutions.
This software offers unlimited performance reviews online, automated workflows and notifications, performance reports and evaluations, 360-degree feedback, self-evaluations, goal setting and tracking, employee engagement metrics, and succession planning. For pricing information, you'll need to schedule a demo and contact a rep. The company has more than 1,000 customers, including Lynn University, Black Hills Community Bank, Make-A-Wish International, Mediware, and the city of Irvine, California.
This software simplifies performance management and metrics with its online performance reviews, 360-degree feedback, performance notes, goal setting and reporting. Contact a rep to schedule a demo and get pricing information. This software helps more than 1,000 companies streamline their performance management strategies, including Fidelity Bank, Minco, Stanley, Black & Decker, and USA Football.