We often talk about performance goals for employees only in the context of an annual performance review, but goal setting can — and should — take different forms.

Effective employee goal setting can take several forms. We often talk about performance goals for employees only in the context of an annual performance review. We rate and categorize employees, set new goals, and then we forget about it all until next year.

This process is often unhelpful, but it's important to establish performance goals that help further your business pursuits and advance your employees' career goals. Remember: employees are more likely to be happy and engaged if they feel like they are progressing in their careers. Writing something on a piece of paper and never referring to it again is not the most effective way of cultivating that feeling. Instead, use the performance goals below as the jumping off point for regular discussions.

Break the Goals into Two Categories

When we develop performance goals for employees, it may be tempting to think only of the business and its current needs. But your employees are concerned with their futures as well. So, divide the goals into these two categories:

  • Job-related goals. These are things that are specific to the employee's current position. This category might include plans to increase sales, reduce turnover, or develop new reports — whatever it takes to make the employee's work more effective and more valuable to the organization.
  • Career-related goals. Goals in this category may blend with job-related ones, but there is a distinct difference in scope between the two: time. A job is what you are doing right now. A career spans the entirety of your working life. A master's degree may not be something that your employee needs for this job, but it may be something that can help them in the future. As a result, obtaining such a degree could be considered a career-related goal. Some managers are hesitant to include these, but don't forget that your employees need to feel like they are valued as people and not just as labor.

Limit the Number of Goals

You can't change everything at once; that would be overwhelming and ineffective. Instead, have each employee make a limited number of goals for the upcoming year. Depending on how you wish to approach their development, the number may be three or it may be 10. The important thing is that goals should be achievable and measurable. If you set a goal to be "happier," how will you measure employee success? It's not that you can't measure happiness (you can!); you just need to know how to do so before it can become an official goal.

Plan to Meet

Goals without follow-ups are simply daydreams. Your employees need access to regular follow-up opportunities throughout the year. At a minimum, employees should be engaged in monthly updates on the status of their goals (more frequently...even better). If you feel like this schedule makes for too many needless meetings, the goals probably aren't that valuable and you should re-evaluate.

Track progress clearly through the year. If the employee isn't progressing, then it's time to make real changes to how the employee works. This can be done either through a performance improvement plan (PIP) or through reassessing workloads and expectations. There is no shame in saying, "You know what? We made a mistake. Let's make a change." This brings us to the next point:

Make Changes

If Jan's goal is to train all new employees to use a software package and then the IT department runs behind with getting the software up and running, you wouldn't just tell Jan, "Well, you've failed!" Rather, you would modify Jan's goals.

Organizations' priorities change all the time. You may land a big new client or lose a client; you may have a period of fast growth or rapid turnover. Whatever the scenario, it's okay to change employee goals to meet the current needs.

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