How To Set Employee Performance Goals

By Indeed Editorial Team

February 9, 2021

Setting workplace performance goals can motivate employees to perform better and provide a basis to measure their performance. Managers may be required to develop performance goals for their team. These goals usually relate to areas of accountability, productivity, motivation and job satisfaction. In this article, we explore what employee performance goals are, how to set them and examples of common performance goals.

What are employee performance goals?

Performance goals are short-term objectives that an employee is expected to achieve within a set period of time. These goals are usually attached to specific job positions and are determined after considering the tasks and duties an employee is required to perform in that position. Performance goals are often a subset of and add up to overall company goals. They let employees know what is expected from their position, so it is important to define performance goals as clearly as possible and make them easily measurable.

Many companies use a performance management system to assess how employees succeed in achieving their goals. This assessment forms the basis for employment decisions like promotions, pay raises and transfers. In a way, employment goals lay out a short-term career path for each employee. They tell the employees what they should work toward to earn a pay raise or a new position.

Related: Using Performance Management in the Workplace

Who sets employee performance goals?

The employer, manager, department supervisor or human resources department creates performance goals for employees. They can choose goals based on company values and objectives or set performance goals in consultation with their employees to keep the goals relevant to the employees’ aspirations to keep them motivated and engaged.

For example, if an employee wishes to reach the position of a team leader, some of their performance goals may be designed to include some duties of a team leader. The management may define timelines and methods for measuring success. Whether more of a team leader’s duties can be assigned to that employee and to what extent can then be decided based upon their ability to achieve their assigned performance goals.

Related: Why Performance Management Is Important for Your Team

How are performance goals different from development goals?

Performance goals

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.

For example, a performance goal pertaining to billing management may look like this:

“Implement a web-based billing management process by March 31. Prepare a blueprint of the design and create awareness among stakeholders. Ensure proper functioning of the system. Develop an implementation plan for the new system by October 31. Make the system ready for delivery by November 15.”

Development goals

Development goals, on the other hand, are set for the professional development of an employee. They focus on the areas the employee wants to develop for growth and advancement in their career. They encourage enhancement in performance through learning and development. Development goals are chosen and set by the employee, but they often involve active support from management. The employee usually looks up to the organization to help fulfill their professional development goals, such as through skill-based training and financial sponsorship.

For example, a development goal pertaining to public speaking may look like this:

“To improve my presentation and public speaking skills, I will join a local speech club and participate in at least seven monthly meetings by the end of this year. I will seek feedback on my presentation after each staff meeting in the company.”

Related: How to Set Development Goals for Work

How to set performance goals 

Setting performance goals for employees is an important responsibility of a manager. Use the following steps to set measurable goals to improve the performance of your team and drive growth in your organization:

1. Review company objectives

Consider your company’s goals to connect performance goals for each employee with the mission and strategy of the company. Performance goals become effective when employees know how they contribute to the company’s growth. Start with an overall company goal and divide it into smaller goals for each employee. For example, if the management wants to grow sales by 4%, find out how each individual can contribute toward that achievement.

2. Invite employees to participate

Encourage employees to identify and suggest their own job-specific goals. Employees will be more motivated to achieve the goals that they set rather than those imposed by the management. Discuss with each employee their individual goals for a given performance period. Ensure that the goals align with the company objectives. Once you finalize the goals, develop an action plan for their achievement.

Related: Using Key Performance Indicators (KPIs) to Achieve Goals

3. Use the SMART method

You can use the SMART method of setting goals to ensure that employee performance goals are specific, measurable, achievable, relevant and time-bound. Each goal should clearly tell the employees what they are expected to achieve and within what time frame. Quantify the achievement to make it measurable, and try to keep the target challenging but within the attainable range.

Effective performance goals should have the following characteristics:

Specific

You should clearly define goals in specific terms as to what is to be achieved. For example, saying “start publishing a monthly newsletter” is better than making a generic statement like “improve communication with team members.”

Measurable

Goals should be measurable, making it easy to track their achievement. For example, “reduce process time by 10%.” In addition to a numeric quantity, you can also measure goals through a change in behavior, quality, cycle or processing time and efficiency.

Achievable

Goals should be achievable with a reasonable amount of effort. You should set realistic goals that can be achieved within the pre-determined timeframe with sincere efforts and available resources.

Relevant

All goals should be pertinent to the main objective, such as achieving company goals.

Time-bound

You should clearly specify a timeframe to achieve goals. For example, if you want to increase productivity by 10%, you should also state whether it should be achieved in one year, two years or by a certain date.

SMART Goals

Image description

SMART Goals:
Specific
Measurable
Attainable
Relevant
Time-based

4. Track and update periodically

You can motivate your employees to achieve their performance goals and ensure progress by monitoring and reviewing achievement periodically. Reward employees who successfully achieve their goals, and work closely with those who fall short of the target. Revise and update the goals if required after discussing with the employee concerned.

Related: Why Performance Management Is Important for Your Team

Examples of workplace performance goals

Following are some examples of workplace performance goals that are specific, measurable, achievable, relevant and time-bound. Consider reviewing these example goals to help you create effective goals for your team members: 

Productivity goal for a production staff

“To increase the production speed by three units per hour by the end of this year.” This goal clearly specifies how much speed must be increased and sets the time limit within which it should be achieved.

Productivity goal for a data entry operator

“To achieve a typing speed of 50 words per minute by December 31.” Instead of simply setting a goal to increase typing speed, this goal clearly identifies the typing speed and the time frame for achievement. 

Efficiency goal for a call center executive

“To increase the number of customer calls handled to 30 per hour before the next half-yearly performance review.” This goal clearly tells the executive how many calls they should be handling by the next review period. It makes it easy to measure the achievement of the executive.

Educational goal for a web designer

“To complete all eight web design training modules in another six months.” This goal is specific and measurable. If the designer completes only six training modules in six months, they will have achieved 75% of their goal.

Educational goal for a project manager

“To obtain Project Management Professional (PMP) certification within two years.” This goal tells the project manager what certification to complete within the given time period.

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