A Strategic Guide to Goal Setting for Employees

This post on employee goal setting was originally published in May 2019 and updated with new facts and information in August 2023.

Did you know around 50% of employees say they don’t know exactly what is expected of them at work? That’s one compelling reason to set organizational and individual performance goals in your company. Goals increase productivity, boost employee motivation, create transparency, and challenge top performers. They help workers determine where to focus and spend their time and which projects deserve more energy and attention. Come performance review time, goals can serve as concrete examples of employees’ accomplishments. 

So what’s the key to reaping these benefits? Your company needs to take a strategic approach to employee goal setting. Find out six strategies for setting successful performance goals. Plus, learn how managers can take part and get examples of employee performance review goals your teams might set.

The Definition of Employee Goal Setting

Employee goal setting is when employees and their managers work together to establish clear and attainable objectives. Individual goals for employees can span a range of areas, from tasks and projects to professional development and career aspirations. 

Goals aren’t just about assigning work; they’re about defining both short-term and long-term objectives that contribute to the success of the employee and the entire organization. That’s why both professional and personal goals are essential. 

What are the Benefits of Setting Goals for Employees?

Goals both enhance productivity and contribute to a more engaged and motivated workforce. The goal-setting process involves open communication, which improves collaboration and trust between employees and managers. Setting goals can even make employees as much as 22% more productive. Employee goals also help managers more fairly and effectively evaluate performance by providing concrete examples they can reference.

Well-defined, effective goals help businesses foster a sense of direction and purpose among their workforce. They enable employees to channel their efforts towards meaningful pursuits that resonate with both their personal aspirations and the company's vision. There’s even evidence that setting challenging goals inspires employees to work harder. 

How to Set Goals for Employees (6 Strategies)

1. Align Employee and Company Goals

Aligning employee and company goals has more benefits than you might realize. Goal alignment increases transparency and helps employees feel more connected to their work. It also increases productivity by as much as 22 percent. When your company’s standard approach is to align individual and organizational goals, it helps steer all goals in the right direction. 

Aligning goals establishes a culture of open, honest communication with employees. Goal alignment is an excellent way to strengthen connections not only between employees and the organization but also between colleagues. Everyone at the organization has a view of what the company is trying to achieve and how their work — and that of their coworkers — fits into the picture. Aligned goals create a shared vision for everyone to work toward, driving engagement and motivation.

Examples of Aligned Goals

Your company’s objective next year is to introduce new branding, including a new logo and color palette. This is a long process involving many employees and several different objectives. Teams and employees can align their goals to contribute to the completion of this company goal. Aligned goals might include:

• Marketing will select and vet three branding agencies in Q1.
• The VP of Marketing will present the top agency choice to the executive team at the end of Q1.
• Executive team members will select an agency in the first month of Q2.

2. Collaborate With Employees to Set Goals

Managers play a key role in developing employees, and goal setting is an important part of their efforts. Collaborating to set new goals, rather than just dictating goals, is highly beneficial for employee growth, engagement, and productivity. In fact, 67% of employees whose managers help them set goals are engaged at work.

With collaborative goal setting, managers let employees know what success would look like, and employees get to play an active role in determining how to get there. Goal setting can help employees discover their strengths, address weaknesses, and determine career aspirations. Managers can frequently assess their work, set milestones, and think about the big picture.

Examples of Collaborative Goals

• The employee will learn [NEW SKILL] and apply [NEW SKILL] on [PROJECT] to start in Q2. 
• The employee will begin training [TASK] starting in Q1 2022 and take full responsibility for [TASK] in Q2. 

3. Set SMART Goals

While we might be tempted to “shoot for the stars,” that’s not always the best strategy when it comes to employee goal setting. Effective performance management is all about practical, attainable, and realistic goal setting. Goals that are too ambitious can lead to lower employee morale, engagement, and burnout — and if they’re not challenging enough, that can also hurt engagement. Your employees might also struggle to meet goals that are vague or lack deadlines.

You can avoid setting ineffective goals by following the SMART method for employee goal setting. SMART goals are:

• Specific
• Measurable
• Achievable
• Relevant
• Time-bound

SMART goals provide a clear, attainable objective for employees to work toward and create a performance management framework to help managers track progress and growth. They can engage and motivate employees and help them maintain focus. Since they are challenging but not out-of-reach, SMART goals provide a sense of accomplishment when they’re reached.

Examples of SMART Goals

• Complete an advanced technical course to gain a new certification by the end of the year
• Maintain an 85%+ average customer satisfaction rating for accuracy and timeliness 
• Create and implement a new process for candidate screening to contribute to the HR team’s goal to reduce time-to-hire by 20% in Q4

4. Set Goals Based on Strengths

Setting employee goals geared toward their strengths is just as essential as setting their quarterly sales goals. Gallup research shows that when company culture emphasizes strengths, a range of KPIs that reflect employee engagement and satisfaction show improvement:

• Turnover
• Absenteeism
• Productivity
• Wellbeing
• Adaptability
• Resilience
• Stress mitigation

While goals are often used to improve skills that are lacking, strengths-based goals shift the focus to what employees are good at. Employees can build on their foundational strengths and use their natural abilities to achieve their goals. Focusing on strengths also helps managers and employees identify professional development goals to reach for as their strengths continue to develop.

Examples of Strengths-Based Goals

• An employee who is a natural leader and speaker develops their coaching skills by completing a leadership training course in Q3
• An employee who is analytical and a strong communicator researches and writes one in-depth white paper per quarter

5. Recognize Goal Achievement

Showing appreciation and recognizing employees’ accomplishments are top contributors to employee engagement and motivation. 70% of employees say recognition would make them feel more motivated at work, and feeling appreciated correlates with higher job satisfaction. 

Managers should take time to personally recognize their team’s successes, whether it’s in one-on-one meetings or in front of the entire company or department. Recognition doesn’t have to be limited to big wins, either. Take the time to thank team members for jumping in to help a colleague troubleshoot or for quick problem-solving in a client meeting.

Recognition Goals Examples for Managers

• Managers will offer specific praise to each direct report at least once per week related to their goal progress or achievement.
• Managers will highlight one top performer each month at the leadership meeting.

6. Track Progress and Give Feedback

Once they’re set, it’s important to monitor goal progress to help everyone stay on track. Sharing goal updates holds both employees and employers accountable for meeting those goals. Goal progress updates eliminate confusion around which goals aren’t being met and help identify where changes need to be made — before it’s too late to make a difference. 

Tracking goals gives managers plenty of opportunities to provide feedback that employees can use right away rather than only giving feedback when a goal isn’t reached. Useful feedback can be empowering and helps them make the changes needed to reach their goals. If you’re hesitant to give too much, don’t be — 96% of employees actually want more feedback, and regular feedback boosts engagement, too.

Examples of How to Track Goal Progress and Give Feedback

• Employees will provide goal updates on a weekly basis to managers and on a monthly basis for their team members.
• Managers will meet with their direct reports one-on-one at least once per week. 
• Managers will give feedback that is actionable and timely and refrain from making value judgments.
• The organization uses a Performance Management platform where every employee can set goals, provide progress updates, and see updates from their colleagues.

In the end, goal setting for employees is an integral part of planning and achieving organizational goals. With the help of these strategies, managers can start improving how they guide employee performance goal-setting and ultimately push their organization one step closer to success.

Do you want more guidance on setting and tracking specific, measurable employee goals? ClearCompany’s complete Performance Management System does it all and has all of the goal-setting tools you need. Schedule a demo today to get the details from one of our experts.