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 types of employee performance goals tie back to your company's overall organizational goals.
What are performance goals?
Performance goals detail what is expected from each employee and are the short-term and long-term objectives employees need to meet. An employee's performance goals should integrate with the company's goals. Clear and well-thought-out performance goals demonstrate how the employee plays an important role in the company's overall success.
Performance goals vs development goals
Although they can sometimes be confused as one and the same, it is important to note that performance goals and development goals are two different things.
- Performance goals are meant to be geared towards the employee's job description. For example, a sales representative might have a performance goal of achieving a specific number in sales each month. These goals are often set by management and should be closely aligned with the overall success of the organization.
- Development goals are meant to be geared towards the employee's professional development and growth. These goals can be chosen by the employee and can help them advance in their career. For example, a sales representative might want to improve their public speaking to become more confident and effective during sales pitches. They could set a development goal of taking a company-sponsored public speaking training course and then having their peers grade them on sales pitches throughout the course.
Why are performance review goals important?
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 tracking tools). Here are some of the easier ones to measure.
1. Productivity
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.
2. Visibility
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.
3. Product quality
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.
4. Punctuality
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 set everything else behind, so a simple punctuality goal could be that no meeting starts more than five minutes late.
5. Professional development
Learning is a part of every industry, and it is always beneficial to expand your team's industry knowledge. Personal development goals can be built around attending a certain number of development events a year, even just one to start. Another common goal is for professionals to publish a paper or complete a continued learning course each year.
6. Personal standards
Personal standards are great goals for getting employees to take the initiative in developing their own performance metrics. Each individual sets their own reachable goals – to increase their output by 10%, for example. This is enough to push for a daily metric that leads to productivity and is driven by personal accountability.
7. Collaboration
You could give employees the goal to complete one collaborative project per quarter. A goal like this fosters interpersonal communication and creates team-oriented accountability. Collaboration goals can supplement productivity and communication goals by providing clear objectives on which to focus those other efforts.
8. Time management
Time-management goals are designed around the specific tasks an employee faces every day. 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.
9. Soft skills
Not all positions require extensive soft skills, but some revolve around them entirely. Soft-skill goals help with progressive development that improves employee efficacy in turn. These goals can be esoteric and hard to define, but a strong example is setting a three-month goal to improve an employee's responses to constructive criticism. This could be considered emotional resilience development.
10. People management
These goals can help employees at every level find constructive ways to promote healthy cooperation and accountability within the company. A simple goal is to communicate with someone from another department at least once a week. This builds a stronger interdepartmental understanding of the business and helps individual team members grasp the interconnectivity of operations – how each link in the chain affects the rest.
11. 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.
12. Organization
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.
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 | Set a 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.
360-degree feedback
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 to accurately speak about their performance.
Self-evaluation
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.
Checklists
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 options
Employee evaluation software and top HR software solutions 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:
HR software
BambooHR
Bamboo HR is our best pick for employee performance management. Their performance management add-on allows you to create and monitor employee goals and takes the guesswork out of tracking success. In addition, they offer a peer feedback feature that allows team members to provide insight about each other to determine individual strengths and weaknesses. This helps paint a clearer picture of overall team performance. Read our review of BambooHR.
Paychex Flex
Paychex offers many useful features for managing employee performance. This software includes a learning management system (LMS) and online courses to help your employees stay updated on certifications and compliance training. Read our comprehensive review of Paychex Flex.
GoCo
For streamlined onboarding and automated performance review workflows, GoCo is our top choice. GoCo's automated functionality ensures reviews are conducted regularly which allows you to more efficiently track and report your team's progress. You can also set up triggers that will send automatic follow-ups as needed. Read our review of GoCo.
Additional reporting by Marisa Sanfilippo