A simple guide to setting employee performance goals
The traditional approach to setting employee performance goals is for the manager to establish several goals at the start of the year with scant input from the employee.
Unfortunately, these goals are then either never mentioned again or only revisited at the end of the year—by which point both parties have usually forgotten what the performance goals were.
Such an approach to employee performance goals is little more than a box-ticking exercise and is never going to motivate employees (or managers) to improve performance. If anything, this is an actively demotivating experience for employees.
In this post, you’ll learn how to set better goals for employees by establishing clear, achievable objectives and tying them with meaningful metrics for both the individual and the organization.
Table of contents:
There are two main types of employee performance goals:
Quantitative goals - can be tracked using a metric or statistic
Qualitative goals - are based on judgment without any hard data to draw from
Quantitative employee performance goals may be used for things like increasing sales, boosting output or improving Net Promoter Scores (NPS.)
Qualitative employee performance goals, on the other hand, cover aspects of performance that are harder to quantify—like improving communication skills, handling difficult conversations better or changing behaviors.
Both types of goals have value, and some may be better suited to certain roles.
For instance, a receptionist’s performance may not be assessed against any specific metrics, but instead factors like professionalism, visitor feedback and friendliness. A salesperson, however, is likely to be assessed on their sales figures, lead conversions and level of activity.
This makes it essential to set different goals for each individual rather than measuring everyone’s performance against a standardized set of goals.
Totara Perform allows users to create both quantitative and qualitative Company Goals (which represent the aims of the organization as a whole and can be assigned to many users), and Personal Goals (specific goals for individual users to achieve) using hierarchical goal frameworks.
Detailed and customizable reporting also allows you to have an overview as to where everyone is with their goals and decide whether some users require more targeted training or support.
There are several models for establishing goals, but two effective frameworks for the workplace are Objectives and Key Results (OKRs) and SMART goals.
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The OKR framework dates back to the 1980s but was popularized as a management tactic by Google in 1999. Since then, it has become widely adopted as a way to set strategy and goals over a specified amount of time for individuals and teams.
OKRs can be used as a way to track progress and measure performance at the end of a work period (often quarterly or annually.) They provide clarity around progress towards individual and team goals, and the benefits are twofold:
They give employees something tangible to work towards within a shorter time frame than traditional annual goal setting
They allow managers to assess performance and progress more objectively.
Anything can be an objective. The key to setting a good objective is to clearly state what you hope to achieve so that later, you can see if you have achieved your objective or at least made some progress towards it. This is often relatively broad, giving a high-level goal that you wish to achieve.
Key Results are quantitative expressions of success or progress towards an objective. By making objectives measurable, you can communicate what is important to the business and agree on the criteria that contribute to that objective.
Design and launch an internal employee learning and development program for your employees.
Example Key Result:
Talk to 3 other HR Directors/CLOs on how they do internal training and development.
Survey 15 team leaders on training needs and gaps.
Draft 10 training modules.
A main benefit of OKRs is that they offer transparency for managers and employees alike. Once the objectives have been set and employees know the precise metrics against which they’ll be measured, they have a clear idea of what success looks like, while managers can assess performance more objectively against specific criteria.
SMART employee performance goals are structured using a set of criteria to improve the chances of accomplishing a given goal:
Specific - describe your goal using a high-level mission statement that covers the 5 Ws who/what/when/where/which
Measurable - what metrics will you use to determine success?
Achievable - set goals that are attainable and realistic
Relevant - ensure the goal aligns with broader business objectives
Timebound - make sure these are motivating, not stressful - if the target date proves too stressful, it may be a sign that the goal is not achievable or relevant
Example of a SMART employee performance goal:
Specific - Design and launch an internal learning and development system for your employees.
Measurable - Improve monthly learner log-ins and course completions by 25%
Achievable - The company achieved a 15% increase in course completions last year by improving its internal employee training, so this goal is realistic
Relevant - Training is important because it enhances customer satisfaction. Improving customer satisfaction and reducing churn is a key priority for the company this year.
Timebound - The new system should be implemented and yield improvements by the 14th of August 2022.
This SMART approach to employee performance goals provides employees and their managers with focus and direction and acts as a useful motivator. With the right employee performance management software, it can also be mapped to specific learning activities—such as courses, seminars or coaching—to ensure the success of any given goal.
One of the major challenges when it comes to setting performance and learning-based goals is that objectives, outcomes or discussion points are never mentioned again as soon as the conversation is over.
Systems such as Totara Perform ensure that no matter what your performance management process looks like, you can keep track of everything from informal check-ins to the annual review, and everything in between.
This means that you have a record of what was discussed and any expectations and points raised. You can even link performance goals to learning activities, competencies, 360-degree feedback and more to support your workplace productivity.
Ready for your best performance management year yet?
Download our free guide to find out how to improve your performance management processes, from check-ins to 360 feedback and that all-important annual appraisal.