Setting performance goals is a common practice in most organizations. These goals relate to areas such as accountability, productivity, motivation and job satisfaction.

Every leader knows that the right performance goals can have a positive impact on the people and the organization. When the goals are achievable, employees look forward to their success and are determined to accomplish their goals.

However, one of the worst mistakes a manager or supervisor can make is to set an unrealistic goal. The employee strives hard to achieve the goal. Unlike a realistic goal, where he will achieve it and feel good about the accomplishment, an unrealistic goal causes demotivation. The employee loses ambition once he thinks he is failing. This adds stress that decreases his productivity.

The right goals are relevant, and if they are not relevant then the employee might lose interest. They must be clear and measurable, or the employee might become frustrated.

What to consider when setting performance goals

To increase motivation and job satisfaction and improve productivity and accountability, it is essential to set the right performance goals for employees. Aspects to consider when setting the goals are:

  • Reasons for pursuing the goal and why these reasons matter
  • Intended results or outcomes
  • Measures of success
  • Expected benefits and potential consequences or costs
  • Alignment with the company’s vision and mission
  • Consistency with the company’s values, principles, and strategies
  • Available resources and capabilities
  • Milestones for achievement
  • Potential roadblocks

It is important that the goals do not lack critical details and are not too rigid. You don’t want them to inhibit creative ideas or be so inflexible that adjustments cannot be made to achieve a better outcome than originally intended.

How to make performance goals effective

Additionally, the goals must be clearly communicated in how they relate to the company’s specific goals and the employee’s job responsibilities. For effectiveness, goals should be:

  • Monitored throughout the year to track progress
  • Discussed between both the employee and manager / supervisor regularly
  • Clearly defined in the direction
  • Evaluated for adjustments to stay on track with achieving the goal
  • Connected to the overall short-term and long-term goals of the company
  • Engaging to the employee and providing a sense of fulfilment
  • Acting as a guideline for the employee’s performance review

Setting the right goals

Setting the right goals requires understanding what is important for the company and each individual employee. Do you know which employees perform to expectations and which do not? Are the goals accurately communicated in a way that guides employees in the direction that helps both the company and them to grow?

These are only a few of the questions about performance goals that the Profit Enhancer Analysis will help consulting firms to better evaluate how to improve the company and the performance of their team members.