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The quick and easy guide to effective employee goal setting

Motivated, engaged and enthusiastic employees are critical to building and maintaining a successful business. Workers who feel good about what they do and know that they are valued drive performance, productivity and ultimately, have a positive influence on the health of the entire business.

Cultivating employee engagement should be a top priority for management in any industry. And one of the easiest and most effective ways to help your staff feel present and driven in their jobs is to encourage them to set development goals that always keep them moving forward.

But for employee goal setting to be effective, it has to be more than just something that managers check off their “to-do” list. Let’s dive into the basics of employee goal setting and how you can implement this high-impact practice within your organization.

What is employee goal setting?

Employee goal setting is the process of setting specific, measurable and role-oriented objectives that employees work towards while at your company. Typically, employee goals are a collaborative effort between a manager and a direct report. They take into account the employee’s personal growth targets, requirements of their future desired role and resource availability.

The idea is to use these work goals to measure performance throughout their time at your organization, evaluate development progress and suggest any upskilling or ongoing education which may be necessary to reach these goals. They can be short or long-term and any rewards for completing them should be scaled to their impact.

Benefits of setting goals for employees

Leveraging goal setting to support talent development can lead to a myriad of benefits including:

  • Boosted employee engagement: Giving your employees something to work towards can increase day-to-day work engagement and improve motivation and job performance. Skill-building gives them the means to achieve those goals.

  • A competitive advantage: 96 percent of business leaders surveyed by InStride believe that investing in employee skill-building gives the company a competitive edge. When skill-building and employee goals align with business goals, it can ultimately drive growth within an organization.

  • Improved retention rates: 94 percent of employees exiting a workplace say they would stay if their company made a greater investment in workforce education. It’s clear that encouraging skill-building and continuous learning as part of a goal setting strategy can actually help reduce turnover.

Challenges of setting employee goals

While the benefits of employee goal setting are clear, there are also a number of challenges that can prevent you from realizing the benefits. The challenges of setting employee goals can include:

  • Unclear objectives

  • No alignment between goals and overall company strategy

  • Unrealistic or unattainable expectations

  • No method for tracking progress

How to define goals for employees

Setting employee goals is critical for team alignment, individual performance and ultimately, company growth. Here are some considerations to keep in mind when establishing goals for employees:

  • Employee goals start from the top: Put simply, individual goals should align with overall team, department and company objectives.

  • Goal setting is a collaborative process: Employees should be encouraged to take part in developing their own goals. People managers are there to support and initiate the process, but team members should have the freedom to weigh in on the initiatives they want to be a part of.

  • Make sure goals are measurable and attainable: Goals are only effective if they’re realistic. Every goal should be within reason of reaching within the measured time period.

  • Focus on individual growth: Goal setting is an opportunity to further employee learning and development. When discussing goals, include individual career development goals as part of the conversation.

Types of employee goal setting frameworks

Depending on how you structure hierarchy and promotion within your organization, you may need or want to organize employee goals in a specific way to realistically manage expectations around advancement and responsibilities.

Here are a few types of employee goal setting structures that you can leverage:

OKR goal setting

Objectives and key results (OKRs) are used by individuals, teams or entire organizations to set actionable challenges and assign measurable outcomes. When a goal is determined, both the objective and key results are clearly defined to give the goal setter(s) a coherent path to follow.

The objective is a high-level goal that sets concrete expectations for a specific project. Key results are data points or activities along the way which track how a team or individual plans to achieve the objective.

Example of an OKR goal

A personal OKR might look something like this:

Objective: Build better relationships with co-workers on different teams.

  • Key result 1: Get lunch with a different colleague every week

  • Key result 2: Organize a happy hour

  • Key result 3: Collaborate cross-functionally on a project

MBO goal setting

Management by objectives (MBOs) is a goal setting strategy designed to improve both employee and company performance and boost engagement through a rewards-based system.

With this model, the manager and direct report work together to identify achievable employee targets which are in alignment with the greater goals of the organization. Achieving these goals is typically rewarded, either monetarily or through other forms of recognition such as an award or promotion. MBOs can also be used to set organizational or department-wide goals.

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