Many managers fail to recognize the strengths of their employees, but that is a mistake. Each employee is part of your organization because they have unique talents that you (or someone you work with) once recognized, and because they went through a rigorous hiring process to become part of your team. Now that they are here, it's your job to help them stay motivated, engaged and excited. Employees who feel good about their work and know they are valued increase their performance and productivity, and ultimately have a positive impact on the business.

One of the easiest and most effective ways to get them to perform at their best is to encourage them to set clear, realistic goals that are relevant to the employee and their talent, and guide them in achieving those goals. One of the most popular goal-setting frameworks is SMART, which we will discuss later in this article. SMART goals help employees to develop a deep, precise understanding of the goal, its purpose, how to measure success, and how the goal relates to the organization's broader priorities. They also help create a roadmap and a solid action plan. But first...

Setting Goals for Employees: Why Is It Important?

Setting goals at work refers to establishing specific, measurable, and role-related goals for employees to work toward. They take into account the employee's personal growth goals, the requirements of their desired future role, and the availability of resources, and are used to measure the employee's performance, assess their progress, and suggest future training. Employee goals show employees how their contributions fit into the big picture and what value they bring to the organization. 

Goals guide and direct employees' efforts, motivate them to perform, and improve performance evaluation and strategic planning. They help employees reach their full potential and help your company achieve its organizational goals. However, without the right goals that are clearly linked to the company's overall strategy, performance and engagement drop, and employees feel like they are just doing something for the sake of doing something.

Benefits of Employee Goal Setting 

Setting employee goals is critical to team alignment, individual performance, and ultimately organizational growth, and can provide a variety of benefits. For example, giving employees a specific goal increases their engagement in their daily work, their motivation, and their job performance. Goal setting is also associated with competitive advantage: Companies that invest in their employees gain a competitive advantage by creating a better work environment. When skills development and employee goals are aligned with business objectives, it ultimately contributes to a company's growth.

Goal setting at work can lead to better retention rates, too: 94% of employees who leave a job say they would stay if their company invested more in employee training. Clearly, promoting skill building and continuous learning as part of a goal-setting strategy can actually help reduce turnover. But while the benefits of goal setting for employees are obvious, you might also encounter a number of challenges. They include setting unclear goals, no alignment between goals and overall business strategy, unrealistic or unattainable expectations, and not monitoring progress (remember to check in on your team!)

Types of Employee Goals

Performance goals focus on an end result, while personal development goals are more about acquiring skills and knowledge and discovering effective strategies to achieve and maintain desired outcomes. The two should go hand in hand to ensure that an employee has the resources necessary to be successful.

Performance Goals

Personal development goals are important because they can significantly influence a person's career path. They can help them strengthen their abilities, learn new skills and even become more effective overall.

When an employee has clearly articulated goals, they are better able to focus and follow through on their tasks. They have a list of priorities that inform when to tackle which task, how much time to spend on it, and how often to delegate. They also find it easier to eliminate distractions because they know how important their tasks are.

An example of a personal development goal might be to master the art of conflict resolution. Conflict is an inherent part of life, including the workplace. However, if an employee is able to resolve conflicts wisely and settle disputes amicably, he or she is sure to be more successful and satisfied, and improve relationships with colleagues and customers.

Personal Development Goals

When you set attainable goals, employees look forward to their success. They will strive to complete the smaller tasks that lead to the end goal, especially if this is encouraged by rewards and recognition.

Mindfully setting performance goals for employees has the potential to improve your overall company's bottom line while creating benefits for your employees. Without clear goals, it can be difficult to stay motivated. However, goals can help employees feel accountable for their career progress and develop a sense of ownership, which will likely translate into higher engagement on their part.

But how to set goals for employees, and what kind of goals should you go for? Should you require them to lead at least one team meeting by the end of the quarter or develop the social media strategy? 

Your best bet is to make the process collaborative. Simply tell them up front that you want to set individual goals with them that align with team goals, and ask them to bring ideas to the meeting about how to move forward and where they can best contribute.

Employee Goal Setting Examples

Here’s how to choose the kind of goals your team should be aiming to achieve:

Role Specific Goals

Role-specific goals are goals that employees set for the positions they hold or aspire to hold. Your job is to help them break down their goals into bite-sized accomplishments that can be celebrated – and, if a goal isn't met, to help them understand why and discuss how they can adjust it so it becomes more realistic.

Team Specific Goals

These are goals that individuals and groups working together set in order to strategically align. Such goals create opportunities to build trust and collaboration, contribute to the growth and development of new skills among team members, and provide a structure for measuring progress at individual and group levels.

Individual Growth Goals

Individual growth goals are goals that the employee sets that may not relate specifically to work, but can still improve job performance and engagement. Perhaps they want to take a half-day every week to work on take online training, meet with a mentor or think through a challenging new project. 

How Does Goal Setting Motivate Employees?

In the 1960s, Edwin Locke put forward the goal-setting theory of motivation. This theory essentially states that goal setting is related to performance. According to it, specific (and challenging) goals, combined with appropriate feedback, lead to higher and better task performance. They indicate to the employee what they have to do, as well as how long they have to do it for. 

The theory is now a technique used to incentivize employees to do their jobs quickly and efficiently, as it leads to better performance by increasing motivation and effort (and improving the quality of feedback, too). Today, employee goals are at the heart of successful performance management, as goals help align employees with the organization's mission.

How To Define Smart Goals for Employees

SMART is an acronym, each letter representing one of the five criteria of a "SMART" goal. The framework – which stands for specific, measurable, achievable, relevant, and time-based – was developed to help set goals for employees that can be achieved in clear steps. It states that SMART goals should be:

Specific

The more specific and focused your goals are, the clearer your purpose will be. Your team's goals should answer the who, what, where and why. If unsure, remember to focus on individual growth: goal setting is an opportunity to encourage employee learning and development while making sure goals remain relevant.

Measurable

If you can't measure progress, how will you know if you're achieving your goal? Help your staff set goals that are measurable, with clear metrics and milestones to track progress and define success. Remember, goals are only effective if they're realistic.

Achievable

It's good to set big goals, but make sure your employees have the tools and resources to achieve them. Striving for unattainable goals is a great way to discourage and demotivate employees if they don't meet them, so make sure they set goals that challenge them without breaking them. 

Relevant

Goals should align with overall team and company goals – help your team understand them, so they can then set goals that make sense for everyone. Remember, you must there to initiate and support the process, but ultimately they should have the freedom to engage in the initiatives they feel are relevant.

Time-based

Each goal should be achievable within a measured time frame. Time constraints can boost performance because they create a sense of urgency. Too much time, however, can slow performance, just as too little time can lead to burnout! Help your employees set a fair and realistic time frame for achieving their goals. 

The SMART method is a proven approach that works particularly well for aligning employee goals with organizational priorities. Just make sure your employees don’t "set and forget" their goals until the next annual review! And, speaking of…

How Often Should Managers and Employees Discuss Goals?

Organizational goals should be a routine topic. Consistently link organizational goals to your team's daily work to ensure that everyone is aligned with the company's mission and nobody’s performance is going off-track. But it's important to talk to each of your employees regularly about their individual goals. How regularly, you ask?

• During goal setting meetings: Most companies set goals at annual or quarterly meetings. These are good opportunities to look at past performance, and then look ahead to the next quarter or year to identify growth opportunities.
• During regular check-ins: Meet regularly with your employees to review progress toward goals – and to intervene before it's too late if someone is struggling. These meetings allow you to discuss any obstacles that might be preventing them from achieving their goals.
• When priorities change: Sometimes, company or team priorities change due to new business needs, changing markets, or other types of changes. Help your employees adjust their existing goals or set new goals that better align with the new direction. 
• When goals are achieved! Once your team has achieved its goals, it's time to set new goals. Sit down with your employees and, together, set new performance goals that will help them continue to grow.

Now you know the importance of goal setting in an organization! From increasing engagement to increasing retention, there are many benefits to start prioritizing employee goal setting. But the most important one is that by setting goals, you are showing your employees that you care about their development and that you are keen to help them advance their careers! What are you waiting for... ?