Setting Employee

Performance Goals:
A Guide for
Managers
Setting Employee
Performance Goals:
A Guide for Managers
Author: Joey V. Price, Jumpstart:HR

Management expert Peter Drucker coined one of the most

famous sayings in business: “What gets measured gets
managed.” While the saying is true for widgets and budgets,
it is also valid for employee success. Setting attainable
and measurable goals helps to strengthen the business
by guiding employees’ improvement and helping them
ultimately meet and even surpass targets.

Companies that set quarterly performance goals can

generate 31% more in their performance process than
those that only reassess annually. And employees are 42%
more likely to achieve goals that are written down. The
best people managers know that the importance of setting
effective performance goals cannot be overstressed. The
question is how to go about it.

Managers need to ensure their employee’s goals align with

the organization’s and department’s business strategy and
mission. A misaligned target can dilute efforts to create a
results-driven team and high-performing employees. A
report from Harvard Business Review found that 40% of
managers cite failure to align as the single greatest challenge
to executing company strategy.

The following steps will help managers set effective

performance goals with their employees that align with and
support the organization’s strategy and goals.

December 2021 [Link]

 Setting Employee Performance Goals:
A Guide for Managers

Step 1: Understand the Step 2: Recognize How the

Organization's Mission, Vision Department's Role and Goals
and Values Align With Organizational Goals
Setting effective employee goals starts with Though every department carries out a different function,
understanding the organization's mission, vision and each one’s contributions are essential components
values (MVaV). A manager cannot skip this step because in meeting the organization’s mission, vision and
the goals that they set for employees must align with values. Each department sets goals that align with the
what it takes to move the organization forward in its organization’s strategy for achieving its overall objectives.
mission.
By gaining a firm grasp of how their department
Mission, vision and values serve as the foundation supports what the organization is looking to accomplish,
for an organization’s strategic plan. They convey the a manager can gain a better understanding for how
organization’s purpose, direction and values and set to connect department, team and individual goals
the bar for what it expects from its employees. When to the organization’s mission and business goals. An
implemented in a deliberate manner, these principles effective way to do that is to drill down into what part the
provide important guidance when setting organizational, department plays in the success of the organization.
departmental and individual employee goals.
Discuss the department’s role with the department head.
Start by reviewing the organization’s mission, vision Ask questions to develop a clear understanding of the
and values statement and any information provided to department’s strategy and objectives.
explain them. It also may be beneficial to discuss the
To identify their team’s role in moving the organization
MVaV with managers in other departments, such as
and department’s success forward, a manager should ask
sales, human resources and marketing, who may provide
themselves the following types of questions:
insight about the organization and its culture, products
and services. • What role does the team play in the success of the
organization and department?
Regardless of where an employee’s role falls in
an organization, they play a part in advancing an • How will the team know it has successfully
organization’s MVaV. Just as a coach keeps the overall accomplished their role?
goals and parameters of a game in mind when teaching • In meeting team goals, what types of outcomes
a player what it takes to be successful in their position on exemplify the organization’s values?
the field, a manager should keep the organization’s MVaV
in mind when planning an employee’s performance Having a dynamic understanding of the team’s role
objectives. can give a manager greater insight in how to organize
and set appropriate performance goals for individual
An added benefit of understanding the why behind team members based on their role and job description.
the organization's existence is that a manager’s job will It also enables a manager to paint a clear picture for
be much easier when it is time to give an employee their employees about how their role aligns with the
guidance and feedback about their goals. organization's mission.

December 2021 [Link]

 Setting Employee Performance Goals:
A Guide for Managers

Step 3: Determine How predictors of successful performance in the job and meet
the organization’s business needs. It also helps to avoid
Each Person's Role Supports making evaluation decisions based on discriminatory

Organizational Goals stereotypes or unconscious biases.

Once a manager has a firm grasp on the department- Step 4: Meet with Each
level vision, they can begin to look at team members Employee to Discuss Goals and
and identify their role in meeting organizational goals.
Whether a manager leads a team of two, 20 or 200, Opportunities for Development
every employee needs to know how their role fits in
the organization’s MVaV. Being able to state each role’s Once a manager has laid out thoughtful goals for each
contribution solidifies to the employee that they are a role that align with the organization and department
vital team member in the organization. That also can help objectives, they are ready to look towards developing
them understand the importance of meeting their goals individual goals for each employee. Individual goals
and being successful in their role. should focus on helping an employee to develop
and grow in their career as well as supporting the
To identify how each person's role can support
organization’s business goals and helping to promote
organizational success and set performance goals that
productivity. Employees who feel supported in their
align with department and organization goals, start with
personal growth are more likely to have higher
the job description for each position. Review the essential
engagement in their roles, which can result in higher
functions and responsibilities of the job and consider
levels of achieving their goals.
how they align with the organizational and departmental
strategy and goals. Arrange time to have a conversation with the employee
to collaborate on planning their work objectives and what
Define what it means to meet the role’s objectives and
professional skills they would like to focus on developing
how to measure success. Consider what metrics to track
in the upcoming year. In an ideal situation, both the
and what standard of measurement the organization
work and personal goals will align, but that is not a
will use to assess progress. This information can provide
requirement for goal setting.
clear direction about what types of performance goals the
manager should set, whether that is a certain number of An employee may express a desire to prepare for
items produced or a sales quota or other metric. It is far a promotion or a move into a different area of the
less critical to decide whether the rubric used to evaluate organization. Helping the employee to work towards that
performance is quantitative (e.g., a 0 to 10 scale) or goal still benefits the organization by developing a more
qualitative (e.g., "does not meet expectations" - "exceeds highly skilled and motivated employee.
expectations") than it is to establish clear and consistent
The conversation also is an opportune time to reinforce
definitions of each measurement.
the organization’s MVaV and department objectives and
In addition, it is essential to set consistent goals and share how the employee’s role supports meeting those
standards for individuals working in the same role. goals.
Setting neutral performance objectives and criteria helps
to ensure that the goals and standards are valid

December 2021 [Link]

 Setting Employee Performance Goals:
A Guide for Managers

Step 5: Set Individual Employee Practical Example

Goals
Barbara’s role requires making presentations
to groups of stakeholders. Barbara has told the
Employees need clear performance goals so they know
department manager of not feeling confident when
precisely what is expected of them and how they will be
speaking in public and wanting to develop better
evaluated. With the big picture at the organization and
skills in public speaking. Barbara also would like to
department level defined, core requirements for team
work towards advancing into a management role.
positions outlined and individual employee aspirations in
Effective public speaking is one of the criteria for
mind, a manager is finally ready to set specific individual
promotion into management at the organization,
employee performance goals - goals that an employee
as the positions require the ability to communicate
can grasp and be motivated to accomplish.
clearly across the organization and articulate ideas.
One of the best methods of setting effective goals Barbara’s manager agrees it would help in Barbara’s
is to use SMART criteria. SMART stands for: specific, current job to develop better public speaking skills
measurable, achievable, relevant and time-bound. and believes it will be beneficial for Barbara’s career
SMART goals allow managers and employees to clearly to present the department results at the next staff
understand, track and achieve short and long-term retreat held near the end of the year. The manager
performance objectives. sets the following performance goal for Barbara:
Improve as a public speaker by participating in
Ensuring an employee clearly understands their
the organization’s Toastmasters Club, completing
performance goals and objectives, the period for
a public speaking course and presenting the
achieving them and the criteria by which managers
department results at the year-end staff retreat.
will appraise these objectives limits the possibility of
misunderstanding that may lead to wasted time and The goal meets the SMART criteria:
resources.
• Specific: The objectives detail what Barbara will
Step 6: Set Regular Meetings to do to meet the goal – participate in Toastmasters,
complete a course and present at the staff retreat.
Discuss Performance Goals • Measurable: Each objective in the goal is
measurable, Barbara will be completing steps in
The final step in the process is to have conversations the Toastmasters’ program as well as required
about employee performance on an ongoing basis. coursework.
While many employers still see the benefit of conducting • Achievable: Dedicating time and effort can help
one annual performance review with an employee, anyone improve and become more confident at
an employee is more likely to achieve performance public speaking, so the goal is achievable.
objectives when given feedback quickly and often. The
• Relevant: The goal will help strengthen presentation
most effective managers in an organization are the ones
skills in Barbara’s current role and may help Barbara
who are in tune with individual employee goals and have
achieve a promotion to a manager role within the
regular conversations about performance.
organization.
Fostering an environment of frequent, transparent • Time-bound: The organization will hold the staff
communication allows an employee the chance to retreat near the end of the year.
express opinions on their performance and share

December 2021 [Link]

 Setting Employee Performance Goals:
A Guide for Managers

challenges and obstacles that affect it. Doing this Frequent and regular performance conversations also
regularly will provide more time for improvement when allow the manager and employee to add, modify or
an employee makes mistakes, and reduce the number remove goals if circumstances warrant. For example,
of mistakes made as the employee learns and the year a shift in the organization’s strategy or department’s
progresses. objectives may require changes to, or even the
elimination of, one or more goals. Similarly, if a goal
A manager should stay up to date with team members
is proving more difficult and complex than expected,
progress on their performance goals through quarterly
or simpler and easier to achieve, the manager and
reviews, one-on-ones, regular check ins and informal
employee can discuss modifying the expectations and
conversations. For instance, the manager might set time
deliverables to conform with the new information. This
aside each month to talk with employees about their
helps to keep the performance goals aligned with the
goals and ensure that they are still on track to achieve
organization’s needs and the employee’s development.
them. That time is well spent since it is easier to intervene
early on a goal that may be going off track than near
the end when a manager can do little to make a positive
intervention before the goal’s deadline.

Additional Resources
How to Give Effective Performance Feedback

How to Foster Employee Motivation

Form for Career Development Opportunities

Training and Development

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