Every employee seeks professional growth throughout their career. Setting clear, actionable, measurable performance review goals is pivotal to driving them toward continuous success. Studies affirm that setting clear goals improve workplace performance by 12% to 15%. Without goals, employees are left clueless about their performance and lack direction in their career path.
As an HR manager or team leader who oversees performance evaluation, you play an important role in influencing your team’s productivity and growth. Therefore, it's vital to know what are the right goals that empower an employee’s development and how to incorporate them into routine performance appraisals.
More importantly, you should make goal-setting a collaborative process and ensure that employees actively participate in them. Also, there must be follow-ups, and employees should feel accountable for their progress. You’ll find all the resources you need, including templates, examples, and a guide to setting performance review goals in this article.
Setting up well-defined goals agreeable to both managers and employees offers various benefits.
Goals, whether individual or team-level, are important metrics that determine if an employee has met specific standards in their job. Without one, managers will be in the dark and lack an objective approach to appraise their subordinates. This might lead to evaluation bias, where managers rely on sentiments and personal relationships when evaluating.
Conversely, setting performance appraisal goals provide an objective foundation for all employees. For example, organizations can use appraisal results with strong confidence when making strategic business decisions. Likewise, managers can determine if the employees are performing up to expectations.
Communication is key to allowing employees to improve professionally and individually. While daily informal communication is helpful, reviewing performance appraisal goals enable employees to voice their thoughts in a secure and open environment.
For example, employees open up about their challenges and growth opportunities in the company. Such discussions also help employees to gain a clear view of their strengths and weaknesses. The resulting intelligence help managers and their subordinates strengthen bonds and develop common understandings.
As the marketplace continues to evolve, businesses find themselves in more competitive environments. Market trends, staff turnovers, and financial volatilities are some market dynamics companies must grapple with. This requires a robust strategic planning method, such as the 10-stage model introduced by the Boston Consulting Group.
The BCG strategic planning model allows organizations to respond flexibly to market conditions, and it hinges on the people driving the business. At layer 10, the approach implies clarity of governance and objectives for each division. This is only possible if business leaders communicate goals clearly to employees and receive direct feedback during the appraisal session.
Goals are a useful yardstick to ensure employees progress in the company’s direction. As humans, some employees might veer off the path as they are engrossed in daily tasks. Setting, measuring, and reviewing goals keep the entire team focused and drove them towards the organization’s goals.
Accountability is tightly associated with productivity. Encourage the former, and you’ll see the latter increase in multiple folds. Holding fair appraisals with mutually-agreed goals encourages employees to take ownership and be proud of their job. There are several things to avoid when promoting accountability.
For example, HBR experts suggested that it’s crucial to maintain the employee’s dignity. Don’t turn performance appraisals into a surveillance program or use goals to penalize employees. Instead, show that you’re genuinely interested in how they accomplished their goals. Or patiently listen to their challenges if they struggle to do so.
Companies seeking growth must ensure that employees align their goals at the team and organizational levels. A study found that strategic organizational alignment increases profitability by 72%, underscoring the importance of company goals.
Setting the right appraisal goals benefits HR, employees, and leaders in several ways. For a start, employees learn how their strengths and weaknesses impact the team and company performance. Setting company goals also ensures that employees align their growth with the primary business objectives.
Goals are not one-off objectives that employees set and forget but a measure that supports continuous growth. They encourage discussions between employees and evaluators to discover problems and upskilling opportunities. Reviewing goals strengthen bonds and communication between managers and employees.
When setting goals, choosing the proper framework to measure performance metrics and fulfill the appraisal objectives is important. Depending on your appraisal framework, I recommend using SMART goals, KPIs, or OKRs for performance appraisals.
When setting employee review goals, HR managers and team leaders are often torn between OKRs and SMART goals. They are, however, not mutually exclusive. Many leaders use the SMART model to set key results in the OKR statement. By combining both approaches, your OKRs become more refined and focused. This provides clarity when guiding teams toward a lofty goal.
After you’ve set the goals, monitor the progress over time before evaluating the results. Depending on the position, the duration differs. For top executives, such as the CEO, CTO, and CMO, it takes up to 12 months to ensure a fair evaluation of their results. Meanwhile, mid-level managers should be assessed every 6 or 12 months, while non-management positions should be monthly or quarterly.
A company’s success is highly dependent on the people driving it. Therefore, most performance review goals centered on improving the employees individually and professionally. Setting individual goals allows them to chart their professional growth and contribute as team members.
You can use these examples as templates for employee reviews.
Soft skills help accelerate employees in their career path. For example, public speaking, persuasion, presentation, and mentoring abilities are desirable skills that shape organizational leaders. Moreover, employees equipped with refined soft skills influence the entire team's morale.
Employees must stay abreast with changing requirements that their job demands. Setting professional development goals encourage employees to learn skills and knowledge to remain relevant in their organization.
Teamwork amongst different divisions is pivotal for the company’s growth. Setting teamwork goals to ensure that co-workers are doing their best to foster a positive relationship in the workplace. They become open to ideas, respectful, and able to handle constructive feedback.
Setting leadership goals help promising employees and managers step up and position themselves as future organizational leaders. It allows managers to effectively lead a team of diverse talent and produce results that significantly impact the company’s performance.
Problem-solving skills, new ideas, and exciting breakthroughs depend on team members’ creativity and innovation. Therefore, setting these goals help to ensure fruitful brainstorming sessions among team members.
Communication, or the lack of it, will be detrimental to individual and team performance. Setting clear goals avoids miscommunication, ensures accurate information sharing, and avoids missed deadlines.
We hope we’ve been convincing in stressing the importance of setting the right performance review goals. Now comes the tricky part – integrating the goals with your performance appraisal framework.
The question that begs an answer is, how do you ensure that setting goals result in actions and scale the approach for the entire organization?
Here are some helpful recommendations.
Vague, non-measurable goals are not helpful in performance reviews. Therefore, ensure that goals, be it company or individual, use the SMART or OKR framework. SMART goals make ambitious progress achievable by laying down small, realistic and achievable objectives. Meanwhile, OKRs allow teams to set lofty goals and set up different ways that help in achieving them. Depending on your team’s requirements, either framework is a good option.
As we’ve mentioned, you can combine SMART goals and OKRs in appraisals to get the benefit of both models. Using multiple SMART goals as the key results in the OKRs, helps employees to answer the ‘what, why, when, and how’ when working towards a goal.
However, it’s crucial to separate OKRs from the performance review, particularly when you discuss remunerations, rewards, and promotions. When you discuss OKRs and performances in the same session, you risk getting skewed results as employees focus on getting rewarded.
Ideally, allocate at least a month gap between OKRs and performance review cycles. This allows employees to focus on exploring growth and collaboration during the former while discussing performance metrics and salaries in the latter.
Sometimes, it’s impossible to disassociate OKRs from performance reviews completely. In such cases, ensure that you treat OKRs as one of several indicators of the employee’s performance. As helpful as they are, OKR does not describe the employee’s contribution, impact, and the difficulty of their tasks.
Goal setting is personal, both for the employee and the HR. Therefore, it deserves the time and space allocated in a 1:1 meeting. By holding a private discussion, you can uncover the employee’s motivation and help them set meaningful goals.
Furthermore, employees might need clarification about their immediate goals or long-term objectives. The HR team plays an important role in guiding the employees in setting goals that benefit them, their team, and the organization. For example, HR uses this 1:1 template to ask questions that help employees discover the right goals.
Personal Development Plan (PDP) is a guideline that helps employees discover their motivations, set goals, plan follow-up actions, and review their progress throughout their careers. HR uses the PDP to support employees' growth while aligning their goals with the company’s values.
For example, Dariia, People & Culture Lead at Uptech, Uptech uses a 5-steps PDP template to help their developers plan their professional growth and improve the team’s efficiency. They make the PDP public and transparent by sharing it with every employee.
Keeping track of employees’ progress and goals is challenging if you rely on conventional spreadsheets. You might miss out on overdue milestones and delay the opportunities to hold further discussions with the employees. With Plai, you can monitor the progress of each actionable item on one dashboard and set timely reminders to employees.
Plai is a performance management platform that allows HR to monitor goals, PDP progress and implement other evaluation frameworks. For example, you can use Plai to set up direct evaluation by a manager or 360-degree review. Plai also allows you to track and revisit employees goals and past progressin its context panel, which helps prevent bias during evaluation.
Setting the correct performance review goals is instrumental to businesses, teams, and employees. However, integrating goal-setting into performance appraisals takes a lot of work. Besides guiding employees to choose their goals, HR must continuously monitor signs of progress and provide timely feedback. This demands an automated HR solution like Plai that abstracts the complexities of goal setting with easy-to-use templates.
Learn how to set up the complete performance review process and automate it from our HR Expert’s Guide
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