Employee goal-setting is essential to any successful organisation, as it helps people focus their efforts on specific targets and know when they’ve been successful. More importantly, the very act of setting goals is what enables workers to align their progress with the organisation’s overall objectives and ensure they are working on tasks that contribute to reaching these goals.
However, it's not enough to tell your employees to set goals. As a leader, you must work with them to identify and prioritise their objectives to ensure that everyone is working towards the same overall organisational alignment.
What is employee goal-setting?
Employee goal-setting establishes specific and measurable objectives that employees strive to achieve within a set period. It involves setting clear and concise goals tailored to each employee's role and responsibilities. Goals are typically set collaboratively between the employee and their manager to ensure they are realistic, achievable, and meaningful and that the employee is fully invested in achieving them.
Additionally, employee goals should be aligned with the overall goals and objectives of the organisation, ensuring that your team members’ performance, productivity, and individual contributions count towards your company's success.
Why setting objectives for employees is important
Goal-setting helps employees understand what they are expected to achieve and provides a clear roadmap for achieving those objectives. It also provides a mechanism for measuring progress. For example, setting performance objectives enables your organisation to track employee accomplishments, celebrate milestones and identify areas for improvement. This process can be used to set both short-term and long-term goals, which can vary in scope and complexity depending on the employee's role and level of responsibility.
Goal-setting benefits both employees and employers; research by BI WORLDWIDE shows that workers with relevant and meaningful goals are more than three times more likely to be committed to their company and over 14 times more likely to feel inspired at work.
How to set employee objectives and goals
1. Start with the big picture
Before you can help your employees set goals, you need to have a clear idea of your company's overall objectives. This means understanding your organisation's mission statement, values, long-term goals and strategy.
Appraisd tip: A cohesive mission and vision statement gives your organisation a clear sense of purpose and direction. With a mission and vision statement, you can rally employees and other key stakeholders around a shared set of values and goals. This may seem common sense, but in a survey of HR professionals by employee rewards and recognition platform Fond, only 1 in 10 believe 80% or more of their employees are able to correctly recite their organisation’s core values.
Looking at the big picture is also the first step to achieving organisational alignment — when individual goals and team goals are in sync with your overall business goals.
This can be the key to unlocking optimal performance and efficiency. A study of 410 organisations by LSA Global found that aligned organisations grew their revenues 58% faster and were 72% more profitable than their unaligned counterparts. This is consistent with the findings of a McKinsey report, which shows that companies whose employees were aligned with their business goals and direction were twice as likely to have above average profit margins.
2. Encourage collaboration between employees and managers
Goal-setting should be a collaborative process between employees and line managers. When employees can collaborate on goal-setting, they are more likely to feel invested in the outcomes and motivated to achieve them. Above all, a collaborative goal-setting process ensures that any objectives or goals identified are fair, reasonable and achievable. It enables employees to share their needs and interests and have their concerns heard and considered.
Appraisd tip: Ensure your managers confirm that their team members’ goals are linked to the company’s priorities. When this happens, employees are 84% more likely to consider a company’s performance management approach to be fair.
3. Identify and set SMART employee goals
When setting goals, it's important to make them SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. The SMART framework provides a structured approach to setting employee goals that are focused on achieving positive outcomes and setting up employees for success.
Appraisd tip: Here’s an example of a SMART goal: Increase monthly sales by 10% within the next six months.
- S — Specific: The goal is clearly defined as a 10% increase in monthly sales, providing a specific target to aim for.
- M — Measurable: The goal is measurable, as we can track the percentage increase in sales each month across six months to determine whether we're on track to meet the objective.
- A — Achievable: The goal is achievable because it's a realistic target based on past sales performance and available resources.
- R — Relevant: The goal is relevant to the organisation's overall objectives, as increased sales will help to grow the business and increase revenue.
- T — Time-bound: The goal has a clear deadline of six months, creating a sense of urgency and helps the employee stay focused on achieving the objective.
Overall, this SMART goal provides a clear objective for the employee to work towards, with specific metrics for measuring progress, a realistic target, and a clear deadline for achievement.
Setting SMART goals also ensures that your goals are documented. One study at the Dominican University in California on goal-setting found that you’re 42% more likely to achieve your goals by simply writing them down.
4. Provide support and resources
Setting goals is just the first step; employees also need the resources and support to achieve them. Make sure managers understand the importance of supporting employees, not just in setting goals but also in helping them to achieve them. Here are a few ways you can do so:
- Provide resources: Ensure your employees have the resources they need to achieve their goals. This may include training, tools, or additional support from other team members.
- Clarify expectations: Ensure your employees fully understand what is expected of them to achieve their goals. Be clear about timelines, metrics for success, and any other key factors that will impact their progress.
- Check-in regularly: Schedule regular check-ins with your employees to discuss their progress towards their goals. Use these meetings to offer support, feedback, and guidance as needed.
- Provide constructive feedback: If an employee struggles to progress towards their goals, provide constructive feedback to help them get back on track. Offer suggestions for improvement and work collaboratively to develop a plan for success.
5. Celebrate wins
You can’t put a price on making employees feel appreciated at work. According to research by Zippia, 80% of employees say they would be motivated to work harder when their managers recognise their work. Conversely, 44% of employees who said they were planning to leave their jobs said lack of recognition was their main reason for doing so.
Appraisd tip: Recognising and rewarding employees for their hard work and achievements are essential to maintaining morale and motivating your team to continue striving towards their objectives. Whether it's a simple thank you or a more substantial reward, taking the time to celebrate success is essential for creating a positive workplace culture.
6. Encourage ongoing improvement
Finally, it’s important to remember that employee goal-setting is an ongoing process, and it's essential to regularly assess progress and adjust objectives as necessary. Whether you’re looking at individual goals or team goals, be ready to reevaluate objectives, identify new opportunities for achieving new growth, or adjust timelines to ensure that goals remain relevant and achievable.
Over to you
Research by McKinsey shows that 91% of companies with effective performance systems say their employees’ goals align with their business priorities. The reason is simple: employees are more effective in their role if they can see how their work goals contribute to the company’s greater success. By following the steps in this guide, you can set practical goals for your employees and ensure their progress aligns with your overall business goals.
Learn how Appraisd can support effective employee goal-setting in your organisation by reading our success stories and seeing our platform in action.