Setting employee and team performance goals is an essential responsibility for business owners and managers. Notably, the best and most impactful employee performance goals are aligned with the company’s overall goals for growth and success.
However, measuring and improving an employee’s performance can be complex and daunting, particularly if communication is not aligned among company goals, managers and team members.
We’ll explain more about performance goals and share tips and examples to help you consistently provide the right feedback and standards to improve employee performance and accelerate company growth.
Performance goals detail what is expected of each employee and outline short-term and long-term objectives employees must meet. An employee’s performance goals should integrate with the business’s goals because employees make or break business success.
Business owners and managers are responsible for setting performance goals for their staff. However, employees are ultimately accountable for their professional success. They must utilize performance goals to stay motivated, feel fulfilled and benefit the company’s bottom line.
While often confused, performance and development goals differ. Here’s how:
Performance goals can have significant benefits for both the employee and the organization. Here are some of the ways performance goals can help the business:
There are many types of performance goals, but some are more measurable than others. Here are some examples of measurable performance goals:
For the short term, a productivity goal for a sales manager may be to call 150 leads in one week. For the long term, a lead generation performance goal could be to onboard 500 new leads in a year.
In the short term, such as one month, a public relations campaign goal may be to generate 10,000 impressions. In the long term, such as one year, the goal might be to have 1,000 of those impressions become new customers.
In the short term (three months), a candle-making company may achieve the goal of making its candles 50 percent organic by sourcing cost-effective ingredients so it doesn’t have to raise prices. In the long term (one year), the goal could be to go 100 percent organic while keeping prices the same.
Consider the resources your employees may need to achieve product quality goals. In this example, they must rely on outside vendors that may communicate inefficiently 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.
Punctuality is a performance goal that can complement productivity. You could set a goal that an employee will not be late more than a certain number of times. Also, when meetings or events run late, they can put everything else behind, so a simple punctuality goal could be that no meeting starts more than five minutes late.
Learning is part of every industry, and expanding your team’s industry knowledge is always beneficial. Personal development goals can be built around attending a certain number of development events or pursuing specific business certifications. Another common goal is for professionals to publish a paper or complete a continued learning course annually.
Offering your employees access to professional development resources, like training courses, can improve employee recruitment and retention while increasing your employees’ overall knowledge and value.
Personal standards are excellent goals for getting employees to take the initiative to develop their own performance metrics. For example, each employee can set the reachable goal of increasing their output by 10 percent. This goal is driven by personal accountability and can lead to increased productivity.
You could give employees the goal of completing one collaborative project per quarter. A goal like this fosters interpersonal communication and creates team-oriented accountability. Workplace collaboration goals can supplement productivity and communication goals by providing clear objectives on which to focus those other efforts.
Time-management goals are designed around the specific tasks an employee faces daily. A clear example of constructive goals in this area would be a commitment to complete a daily task within the first hour of each workday.
Not all positions require extensive soft skills, but some revolve around them entirely. Soft-skill goals help with progressive development that improves employee efficacy.
Soft goals can be hard to define, but a strong example is to set a three-month goal to improve an employee’s responses to constructive criticism. This could be considered emotional resilience development.
People management goals can help employees at every level find constructive ways to promote healthy cooperation and accountability within the company. A simple goal would be to communicate with someone from another department at least once a week.
This builds a more robust interdepartmental understanding of the business and helps individual team members grasp the interconnectivity of operations — how each link in the chain affects the rest.
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 the quality of service. Set an actionable time frame to let employees know when they will need to assist the 20 customers. Depending on the required training, this might be achievable within six months.
An executive assistant who’s 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 might be to file 50 documents alphabetically over three months. A long-term goal might be to scan and load 100 documents onto the company’s secure cloud server over the course of one year.
Setting performance goals will differ by company, but the following steps hold true in most industries and workplace environments.
Every company should have a business plan, or at least an outline of short-term and long-term company objectives. These goals can be written formally or informally and be as long or short as necessary. Many organizations distribute company objectives via email. It’s best to digitally store your business’s goals and objectives so you can edit and change them as needed.
Your company objectives should include strategies that are broken down into clear and actionable tactics.
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 to track them.
When you involve your employees in goal setting, they can often identify challenges you missed. Additionally, they’ll feel heard and motivated to achieve their goals. This exercise can also reveal who is disengaged and who needs additional employee training or coaching.
Goal achievement methods can be helpful for your team members. For example, you can use the SMART goals action plan to implement effective goal setting.
SMART is an acronym for “specific, measurable, achievable, relevant and time-bound.”
Lay out precise performance goals, when they should be achieved, and by whom. Make them simple to understand.
Without performance metrics, tracking each goal’s success will be difficult. Performance metrics offer insight into what is working and what isn’t, putting meaning into goals and empowering employees when they see what they’ve achieved.
While it’s great to think big, setting unachievable goals can hurt employee morale and cause frustration. Consider breaking down goals into smaller targets that can be achieved over a longer period. Attainable goals are key.
The best goals center on your company’s primary objectives. The “R” in “SMART” can also stand for “reasonable,” “realistic,” “resourced” or “results-based.”
Set a specific time frame for each goal, such as one week, one month, six months, one year or five years. Setting a concise time frame, such as one day, may not be helpful; remember the importance of being realistic.
The performance metrics you track depend on the goals you set; performance evaluation varies by goal. Here are some options:
Simple numeric scales, such as 1-5 or 1-10, can quickly measure performance in common areas, like time management or task completion. If you don’t think numbers justify your team’s performance, use a frequency scale that includes “always,” “frequently,” “occasionally” or “never” to help you identify areas where an employee could improve.
Don’t rely on one manager’s point of view when you’re looking for feedback about a team member; also consider notes from co-workers, customers and other department managers. Gathering multiple feedback sources can help you understand an employee’s strengths and weaknesses. Such 360-degree feedback is also excellent for promotion and restructuring considerations.
Allowing employees to evaluate themselves is a great way to compare how they view themselves to the 360-degree feedback you’ve received. Quarterly employee surveys can help you pinpoint shortfalls.
If 360-degree feedback and self-feedback differ significantly, talk to the employee. It’s crucial to help them build self-awareness and reinstate work expectations.
Management by objectives (MBO) is an employee performance improvement method where managers and team members agree on specific performance goals based on the company’s overall goals. They work together to evaluate progress and measure results.
The best HR software often includes employee evaluation and performance management tools that can help you track time spent on projects and keep employees accountable and on track for goal achievement. Here are some of our favorites:
Julie Thompson and Marisa Sanfilippo contributed to this article.