How to Set Effective Employee Performance Goals (+33 Skill-Based Examples)
One of the most important tasks for people operations professionals is getting employees to perform to their full potential. A vital tool to succeed in that endeavor is employee performance goals.
Well-balanced performance goals not only set expectations for the expected quantity and quality of work but can actually motivate employees to do their best.
Instead of deadlines and performance reviews being a source of stress, your team leaders can use them to encourage a professional growth mindset and increase job satisfaction.
This article will cover the theory of setting performance goals and different methods for creating effective employee goals.
We have also included some examples you can use as inspiration for different roles and departments.
📈 What is employee performance, and how do you measure it?
Measuring an employee's performance is crucial for the company and valuable for the employee.
Employee performance measures a worker's ability to perform their job duties. Therefore, analyzing workplace performance can help identify areas for improvement and strengths to lean into.
Performance is measured differently depending on the task or skill in question.
Sometimes it is easy to quantify, such as the total commission earned, while other times, it is not, such as comparing the work of two graphic designers.
Even in more subjective cases, try to find an objective performance measure.
A universal method for measuring performance is 360-degree performance reviews.
Though individual assessments may be somewhat subjective, a congregate score of results from multiple perspectives can provide a measurable performance score. You'd collect insights from the following directions:
- upward (from employees to their superiors);
- downward (from leaders);
- horizontal (from peers);
Running a performance appraisal at least annually (ideally more often) can encourage personal development and a culture of professional growth.
While this type of performance measurement could suffer from subjectivity and potential bias, it can effectively analyze an employee's performance for a non-quantifiable task.
➡️ For a more detailed analysis, check out our comparison of 360-degree feedback vs. traditional performance appraisals.
🎯 What are employee performance goals?
Another way to measure employee performance is by using a success or failure factor.
Even for more subjective roles, you can track goals with a simple yes or no ratio to make them measurable goals.
Again, this is easy for quantifiable performance like sales goals or task speed.
Otherwise, you can use a simple scale of how often employees meet team goals to measure their performance and overall success in their role.
For example, measuring a marketer's performance who increased traffic by 50% is easy.
However, for the manager of a small team, you may need to rely on the result of their 360-degree feedback or calculate the percentage that the manager and their team achieved objectives set for them.
👀 Why you need to set performance goals
A common misunderstanding is that companies use performance goals to wring every last bit of productivity out of employees.
While it is true that measuring performance can help with productivity and proficiency, the negative connotations are often inaccurate.
Sometimes, team leaders and organizations need performance goals to identify employees lacking performance or ability.
Plus, employees thrive by having clear objectives to work toward, and it can improve employee satisfaction.
Improving performance and learning new skills are crucial for career development and pursuing promotions.
Without performance goals, this process can be confusing or rely on upper management's limited and subjective views.
Performance goals provide an objective measure of success, so employees with ambition and talent receive rewards for their abilities. At the same time, those needing additional training or better suited for a different role can get what they need. This can help build a high-performance team.
Employees are motivated to strive for success and maintain upward momentum within their roles and the company by instilling a culture of healthy performance tracking from the onboarding stage.
So don't think of performance goals as a burden on employees, but rather an opportunity.
🆚 Performance goals vs. OKRs
OKRs are a predecessor of SMART goals which provide a framework for setting clear, achievable objectives.
Both concepts are valuable when setting performance goals as they ensure a method for designing fully fleshed-out goals.
The importance of either idea is to go beyond just pointing out the goal and explaining how to achieve the goal.
In the case of OKRs, these are the "key results." In other words, what results indicate that the employee achieved their objective or is progressing toward achieving it?
Setting an objective to "boost website traffic" won't be as successful as a fully fleshed-out OKR. In this case, it can be something like "boost web traffic by 10% per month by focusing on content marketing and commensurate social media budget increases."
The latter example gives much more direction and sets specific success metrics for relevant employees to pursue.
While not strictly necessary, the OKR and SMART goal frameworks can be very beneficial when setting performance-based objectives.
🔍 How are performance goals different from development goals?
You can use both performance goals and development goals in your organization.
Here is a brief rundown of the main differences between the two.
In other words, a company usually sets performance goals to measure an employee's success in their role.
Developmental goals, on the other hand, are usually more like a to-do list that one sets to guide their professional growth.
For example, a performance goal for a project manager might be to have all production plans for a client complete and assigned a week before the deadline.
A development goal for that employee might be to become the resident expert of the production software and find ways to make the process more efficient.
➡️ Check out 14 examples of developmental goals. We also included some tips for achieving every single one of them.
As you can imagine, the employer is most likely setting the performance goal as an expectation for the employee.
The latter is more likely a desire of the employee. Their objective could be to increase their value to the company or advance in their role.
That is the main difference.
Performance goals are usually externally set for external reasons. In contrast, development goals are usually internally set for personal benefit (including professional growth).
🧑 Who sets employee performance goals?
Management is usually in charge of setting employee performance goals. That could be a team leader, people operations professional, or upper-level management.
Essentially, the company sets performance goals for individual employees to achieve.
➡️ Leaders and managers need performance goals too! Check out 10 smart goals for leaders and managers.
🙌 11 Best practices for setting performance goals in your organization
Understanding why performance goals are important is one thing, but setting effective goals for different departments, teams, and individuals is quite another.
So keep these tips in mind when crafting performance-based objectives for your organization.
1. Review company objectives
While performance goals are important for individual employees and teams to do their best, the real purpose is to play into the grander objectives of the company.
It is vital that you understand the big picture to ensure the individual goals set by people operations are conducive to the company ethos and overall success.
2. Define a clear performance goal for each role
At the center of the SMART goals framework is A for Assignability. In other words, company goals and objectives must clearly identify who they are for.
Vague objectives rely on someone to take the reins, but often the wrong people might end up handling a task or no one at all if they assume someone else will.
Here at Zavvy, we use role cards to define who is responsible for what.
3. Define areas of responsibility
With the roles defined, it is important to clarify who is responsible for what.
While some tasks will obviously fall into specific roles, new or unusual tasks may need special assignments. Don't leave anything up to chance or any room for confusion.
4. Use the SMART method
The SMART goals acronym can be broken down as follows:
If your performance goals check all of these boxes, they will have a strong foundation and a better chance of success.
💡 Explore 35 role-based examples of SMART goals for employees.
5. Set realistic goals
The R in the SMART goals framework stands for Realistic.
The idea is straightforward: performance goals should motivate, but if unrealistic, they will have the opposite effect.
For example, a performance goal to boost output by 8% to break a company record will motivate employees to try at least 8% harder to succeed. On the other hand, a performance goal to double output is unlikely to motivate employees to work twice as hard because it is unrealistic. Employees won't give extra effort if a goal seems impossible since they will anticipate failure anyway.
6. Set consistent goals for employees with similar responsibilities
Consistency and fairness are just as important as realism.
Suppose Employee A is a better worker than Employee B. As a result, you might give employee A more challenging performance goals. However, they may feel they are being punished for their hard work and lose the drive to overachieve in the future.
7. Invite employees to participate
Employees can be part of the goal-setting process, too! A good time to discuss professional development goals is during performance reviews. However, it doesn't have to be limited to that.
In addition to discussing their success with past goals, ask what future goals they would like to achieve or work toward.
Another idea would be to sit down with relevant team members to set milestones (aka performance goals) for an upcoming project.
8. Track and update periodically
Performance goals don't need to be inflexible or carved in stone. If you are following the SMART framework, your employee goals should be measurable and have a time frame.
If you find that the initial goals set by people operations were too easy or too difficult, feel free to adjust them or add other elements.
The purpose of performance goals is to set realistic and achievable objectives. It may take some guessing and checking to nail them down, and your employees will understand if you explain the need for updated tasks.
9. Provide ongoing expectations and feedback
Even if your performance goals are well-balanced, it shouldn't be a "set it and forget it" mindset.
If everything is on track and running smoothly, GREAT. Let the assigned team members know they are doing a great job. This will boost morale and improve everyone's impression of performance goals.
10. Reward employees who achieve their goals
In addition to a boost in morale, don't be shy to reward employees for being ambitious about achieving their goals. Rewards could be financial (i.e., bonuses or commission), celebratory (i.e., gifts or a party), or even just appreciative (i.e., a pat on the back or public shout-out).
11. Work closely with employees who fall short
If you notice in your progress tracking that someone is falling behind, connect with them to figure out why.
The goals may be unrealistic, or the employee could use help in the form of additional training, an extended deadline, or an assistant.
You may discover that an employee is not a good fit for that task or role, which is also a valuable outcome.
Tip: Use performance improvement plans to create a supportive and high-performance culture.
➡️ Learn how to create a performance improvement plan with our tips and free template!
💡 33 Examples of performance goals
Again, performance goal theory is different from the real thing. Below are 11 topics and examples of what performance goals might look like related to those categories.
Those italicized in quotes are from a first-person perspective, as if being told to an employee directly. The others are generic organizational goals, as you might see posted in a company's CMS.
- "The average activity level for the company is 45%. Your scores over the past month averaged 35%. We would like to see you get that number up into the 40s."
- Through training and on-the-job experience, veterans of Department X have achieved an output rate of four jobs per hour. Our target number is three per hour, with a minimum acceptable rate of two per hour. If you need help achieving these speeds, please get in touch with us to review your process and consider additional training.
- "We are halfway to the deadline on Project X, but it looks like you are only 40% done with your tasks. We want to see you close the gap by the next check-in to ensure we are on track for launch."
- "Since you moved people around on your team, packages completed per day have fallen from five to three. We need you to reconsider the new team dynamic and find a way to get their output back up to five packages per day."
- "Before the end of the year, we need everyone on your team to fill out Form X. Can you be sure to see that that happens?"
- Management approved a budget increase for Department X beginning in the New Year. With it, they anticipate continued growth of 4-8%.
📈 Process improvement
- "50% of new hires have reported difficulty with Process X. Could you look at the current procedure and find a way to make it more beginner-friendly? It is essential to achieve this before the new round of hiring."
- With the current process, employees can achieve speeds of eight calls per hour. If you have any suggestions for how the process could be sped up or streamlined, please include them in the comments section.
- "Currently, there is a lull in Process X when the teams switch over. That hour has the lowest performance of the day. Let's come up with a way to make the changeover less detrimental. We would like to see the performance levels during that period closer to average."
- "Your current rate of lost or stolen orders is 3 per 100. Our goal is for sales associates to be no higher than 1 per 100. Please be more careful with future orders to reduce these losses."
- All employees must have proof of recertification filed by June 30th. If you have any questions or concerns, please see your manager.
- There is a standard procedure for making hourly logbook entries. Please ensure you are doing so and double-check the number of entries at the end of each shift.
🧍 Human resources & Recruiting
- "Our goal is to provide every employee a review at least quarterly. Please ensure that every employee is scheduled for at least one review next quarter."
- "The employee retention rate for new hires has been under 70% in the first six-month period. We would like to see that number drop below 20%. Please set clearer expectations for new hires and better gauge their interest in the position."
- "We are looking to hire ten seasonal workers before Thanksgiving. Please do your best to find them. We are willing to increase the pay rate by 15%."
🤹 Project management
- We understand that the occasional situation arises, making meeting deadlines impossible (employees out sick, team members quitting, etc.). Still, aside from extreme circumstances, we expect all deadlines to be on time or early.
- "Some of your team members have complained about unclear instructions or confusion in their tasks. Please make an effort to check in with each of them weekly to see if you can provide guidance."
- The July goal for team X is 100 jobs completed with an error rate of <5%.
✅ Work quality
- To maintain smooth procedures, we expect drafts to need at most one revision per submission.
- "Two of your projects failed inspection last week and must be redone. While your output quantity is impressive, we would like you to spend more time on quality."
- The new rating system allows customers to rate the quality of the product they receive. We aim for everyone to maintain an average score of 4+ out of 5 stars.
📞 Communication skills
- To keep things moving smoothly, we expect all employees to respond to emails within one business day.
- Aside from obvious exceptions like using the restroom, we expect employees to answer all phone calls to their desks during work hours. In case of missing a call, call back before EoD.
- Timely communication can save other teams from prioritizing the wrong projects. Please be sure to send any date changes to the "Updates" communication channel immediately.
🕔 Time management
- We expect all employees to arrive to work ready to begin their tasks. Please do not arrive to work expecting to spend time on a personal routine like checking personal emails or eating breakfast.
- The assignments given to you on a day-to-day basis are a reasonable amount of work for a shift. We expect you to complete all assigned tasks by EoD. If you are unable to complete a task, please explain why.
- "You left early twice last week despite being behind on Job X. We want you to have flexibility in your schedule. However, it is imperative that your work still gets completed."
🙍 Customer service
- At Company X, we strive for 5-star service. We also understand that customer complaints happen. At a minimum, we expect all of our employees to receive average customer reviews of at least four stars.
- "While it is understood that work can be stressful and at times emotionally trying, all employees are expected to act professionally, especially in front of customers."
- No customer should be on hold for more than a two-minute time during a service call. Not complying with this standard will lead to a bad customer experience.
- "We are within reach of breaking seven-figure sales this year. If each sales representative makes three new sales by December 31st, we should make it."
- Salespeople earn a 20% commission on all orders sold. We hope everyone in our sales department can make six figures per year.
- For the business to grow, salespeople should bring at least one new client per quarter.
➡️ Build a high-performance workplace with Zavvy
A company's success relies on its employees' ability and performance.
You need to set clear and attainable goals to ensure employees perform their best and have the necessary abilities to succeed in their roles.
Tools like role cards and systems like the SMART goals framework can help HR professionals manage and develop high-performance employees. Performance objectives should not be a burden for employees but a challenge to conquer in their pursuit of professional growth.
Zavvy can help you and your company turn over a new leaf when it comes to motivating employees and tracking their success.
Tools like our 360-degree feedback software, role cards, and performance improvement plan template are just a few ways we can help Management and People operations take their company to the next level.
See it all in action in a free demo.