Performance Goals

Editor's Notes

• #2: Slide Show Notes Today’s training session focuses on the importance of setting goals to guide and develop employee performance. We’ll examine the criteria for effective performance goals and cover the steps in the goal-setting and review process. The information you learn in this session can help you strengthen the performance appraisal process as well as supervise and motivate your employees more successfully.
• #3: Slide Show Notes The main objective of this session is to help you use goals to guide and improve employee performance so that all your employees can achieve at their highest potential. By the time the session is over, you should be able to: Understand the benefits of setting performance goals; Tailor goals to the needs of each employee; Set goals to motivate superior performance; and Incorporate goals successfully into the appraisal process.
• #4: Slide Show Notes During the session, we’ll discuss: The purpose of performance goals and the benefits you will derive from setting them; Criteria for setting effective goals; Steps in the goal-setting process; How to individualize performance goals and develop action plans; Goal-setting review and evaluation; and Setting new goals.
• #5: Slide Show Notes Performance goals are an essential supervisory tool. They communicate your expectations concerning the job performance and the expectations of the organization. Performance goals establish the parameters of acceptable performance. They tell employees exactly what they need to do to be successful in their jobs. Performance goals also set standards by which to measure employee performance. Without goals, it’s hard or impossible to evaluate performance. Without goals, there’s no way to be certain whether employees are living up to expectations. Performance goals provide a pathway to employee improvement, growth, and opportunity. Performance goals are really a road map for employee success. They help guide and encourage career development. In addition, performance goals are powerful motivators. Goals point the way forward and encourage employees to perform at their best to meet the challenges of their work. Think about how employee performance goals help you achieve department goals and contribute to the organization’s goals. Review the organization’s mission statement and discuss current organizational goals that affect department and individual goals.
• #6: Slide Show Notes The benefits of setting performance goals are not limited to the points we’ve just discussed, however. There are stronger reasons for setting performance goals. Perhaps the most important of these is that performance goals provide a fair and objective basis for raises, bonuses, promotions, and other rewards that are based on an employee’s performance. Employees who achieve their goals reap the rewards. Performance goals also help you target training and coaching needs. They indicate the training employees need to achieve their goals, and they suggest remedial instruction for those who fail to achieve goals. Another key benefit of setting performance goals is that they contribute significantly to the performance appraisal process. Performance goals create a clear and objective focus for the discussion of an employee’s performance. Think about the various ways performance goals help you do your job and encourage employees to perform at their best. Review relevant compensation issues linked to performance goals and performance appraisals. For example, how does the raise structure support the setting and achievement of performance goals?
• #7: Slide Show Notes Another good reason to set fair and objective performance goals with employees is that they help you comply with employment laws. For example, equal employment opportunity laws like Title VII of the federal Civil Rights Act and similar state laws require you to make objective employment decisions and not discriminate on the basis of race, color, religion, national origin, age, or sex. The Americans with Disabilities Act requires employers to make reasonable accommodations for qualified disabled workers. Fair and objective performance goals lead to fair and objective employment decisions. Labor laws like the National Labor Relations Act and similar state laws forbid unfair actions against union workers. Setting objective performance goals helps you evaluate employee performance fairly for all employees, whether they belong to a union or not.
• #8: Slide Show Notes Now let’s move on and discuss the criteria for effective performance goals. Above all, performance goals must be job related. They must be linked to specific duties, responsibilities, and career opportunities. Performance goals must be relevant to the overall goals and mission of the organization so that each employee’s achievements will contribute meaningfully to the success of the whole organization. Performance goals must also be measurable. As we mentioned earlier, without a standard of measurement, it’s hard or impossible to objectively evaluate employee performance. You always have to be able to determine whether employees have achieved their goals. In addition, performance goals must be observable in terms of quantity, quality, time, and/or results. For example: Improvement in production of so many units a day; Improvement in quality based on specific standards; Acquisition of a skill in a given time frame; or Achievement of an agreed upon result, such as the successful conclusion of a special project.
• #9: Slide Show Notes Performance goals must also be attainable. It must be physically possible for a goal to be achieved. That means you have to consider environmental factors that could prevent progress, such as the capacity of your production process, equipment limitations, and time limitations. You also have to consider the skills, experience, and abilities of employees as well, and make sure that the goals you set are within the employee’s reach. Performance goals must be reasonable. If, for example, a goal is to increase the quantity of work an employee does, you have to be realistic about your expectations. If a goal is too demanding, it can discourage rather than encourage achievement. Goals must be specific. You want to specify a particular result. Failure to do so could result in a different outcome from the one you expected. Performance goals also need to be challenging. Performance goals should be set high enough so that they encourage an employee to strive for the next level of achievement. Performance goals should be prioritized. It may not always be possible for employees to make equal progress on all goals, so they need to know up-front which goals are most important.
• #10: Slide Show Notes Performance goals must also be individualized to be effective. They should be built around an employee’s existing level of skill, experience, and career aspirations. A goal that is challenging for one employee might be impossible for another or too easy for a third. Flexibility is another key criterion. By this we mean that you have to account for extraordinary or unusual circumstances that could affect achievement of goals. An employee might, for example, be injured in an accident and be out of work for several weeks. Clearly, this could affect his or her ability to meet a goal during an evaluation period. Another example: The production needs of the department or organization might shift suddenly, making a goal irrelevant or at least less important than it was when it was set. And finally, performance goals should always be written down, with the original going in the employee’s file and a copy going to the employee. That way, you both know which goals have been set, and come performance appraisal time, there can be no mistake about expectations. Do you use these criteria when setting performance goals? Ask trainees for examples of performance goals they have set with employees and have the group evaluate them on the basis of these criteria.
• #11: Slide Show Notes Now it’s time to ask yourself if you understand the information that has been presented so far. Do you understand what we’ve said about the importance and benefits of setting performance goals with employees? Do you understand the criteria for performance goals we’ve suggested? In order to use performance goals as an effective supervisory tool, you need to understand all this information. Answer the questions trainees have about the information presented in the previous slides. Conduct an exercise, if appropriate. Now let’s continue to the next slide and talk about the goal-setting process.
• #12: Slide Show Notes The goal-setting process involves six basic steps. It begins by sitting down with each employee and together reaching agreement about the employee’s performance goals for the upcoming evaluation period. We’ll talk more at the end of the session about the employee’s role in the process. But for now, let’s just say that employee input is essential for setting successful performance goals. Without the employee’s buy-in up-front, goals may not be achieved. Once goals have been set, the next step is to monitor employee performance, coaching and counseling as necessary, using positive and corrective feedback to help the employee work toward each goal. Be sure to document what you observe. A written account of the employee’s progress is the best and safest way to make sure your judgments about employee achievements are supported by accurate and objective data, not fuzzy recollections or subjective impressions.
• #13: Slide Show Notes At the end of the evaluation period, appraise each employee’s performance in light of his or her performance goals for the period. Then, sit down with each employee and discuss his or her performance in relation to the goals you previously set. Listen to the employee’s assessment of performance. Discuss any problems that arose and affected the employee’s ability to meet goals. And finally, set new performance goals for the next evaluation period together with the employee. Think about the process you use to set goals. Does it include these basic steps? Discuss your organization’s guidelines for setting performance goals. If you don’t have specific guidelines, ask trainees to describe the process they use. Some may include additional steps. Ask those trainees to share their ideas with the group.
• #14: Slide Show Notes Now let’s get more specific and talk about how to develop individual performance goals to suit the particular abilities, needs, and aspirations of each employee. Begin by reviewing the job description and hiring specifications. This will help you establish the employee’s responsibilities as well as required performance standards and other job expectations. Next, review the employee’s past performance to get perspective on the employee’s progress in the job. Consider this person’s skill and knowledge development, prior experiences, successes, and failures, so that you can relate these to plans for future achievement. Then, compare this past performance with organizational and department goals. Has there been a good fit? Is this employee’s performance contributing to the success of your department and your company? What course corrections need to be made to improve the fit and enhance the contribution?
• #15: Slide Show Notes To individualize goals, you also have to take physical or environmental limitations into account. Some employees might have access to more or different resources in their work and therefore be able to accomplish more or move ahead more quickly than others. Don’t forget to take team goals into account as well. If certain employees are part of special work groups or project teams, their individual goals should be aligned, at least to some extent, with the goals of the team. Also think about the employee’s career growth and aspirations. Career development is an important aspect of many performance goals. And don’t forget to consider your manager’s goals and your own performance goals. How do the goals you set for individual employees align with these other goals? Again, there needs to be a good fit. Think of two employees you supervise. How do their performance goals differ? What differences between those employees or their jobs have particularly affected the way performance goals have been set? Ask trainees to give examples of different goals they’ve set for different employees and their rationale for the differences.
• #16: Slide Show Notes Creating an action plan for each performance goal is another essential part of the process. Without a specific, step-by-step plan for achieving goals, employees may lose direction and fail to achieve their objective. To prevent that, set one goal for each major job responsibility per evaluation period. But be careful of setting too many goals. This can be overwhelming, and confusing, and it can discourage positive performance. You can always add goals later if appropriate. Provide clear and consistent guidelines for the achievement of each goal. List the specific steps the employee needs to take to reach the goal. Don’t leave anything to chance. Be specific and be complete. Be sure to state a time frame in which the goal should be achieved. Open-ended goals are less likely to be achieved. The deadline you and the employee set will depend on priorities, resources, and the skills, experience, and abilities of the individual employee. Finally, don’t forget to include a standard that is objective and specific for measuring performance for each goal. For example, so many units of production, a specific level of quality, or the achievement of a particular result. Both you and the employee need to have a way of telling when the goal has been reached.
• #17: Slide Show Notes At the end of the evaluation period, meet with the employee to review and evaluate achievement of performance goals. This is usually done during the employee’s formal performance appraisal, but may be handled in a separate meeting before the appraisal if you prefer. During the review meeting, you’ll want to consider the following points: Were all the goals achieved? If not, why not? What problems did the employee encounter, and how were they resolved? What new skills, experience, and knowledge were gained? What’s the logical next step? This, of course, brings us to the setting of new performance goals, which is the topic of the next slide. Think about some other questions you might ask when reviewing performance goals. Ask trainees to suggest other questions they might ask when reviewing performance goals. For example, does the employee think that the goals are helping to achieve career aspirations?
• #18: Slide Show Notes Goal-setting is an ongoing process. Once goals are achieved, new goals must be set. You and the employee can begin with any goals not achieved during the previous period. Some may have become obsolete, but others may still be worth pursuing. New goals should also take into account career plans and ambitions. Along with furthering the needs of the organization, performance goals should also help the employee achieve personal growth and advancement. New goals might arise as a result of changing company or department needs. A lot can happen in the period between performance appraisals. New goals might also be related to additional training or the coaching needs of an employee. For example, a goal might be to develop a new skill or acquire new information through some form of training—either an in-house program, a seminar, or perhaps a certification or degree course at a local educational institution. And finally, new goals will also be found in the next level of achievement for the employee. The goals will build on previous goals to support and encourage continued growth and development.
• #19: Slide Show Notes Do you understand the information presented in the previous slides about the goal-setting process? It’s important for you to understand this information, since it will help you set effective performance goals with your employees. Answer any questions trainees have about the information in the previous slides. Conduct an exercise, if appropriate. Now let’s consider one final point—the employee’s role in goal-setting.
• #20: Slide Show Notes Employees are central to the goal-setting process. A supervisor who sets performance goals for employees will not be as successful as one who sets goals with employees. Be sure to encourage active employee participation in the process. Some employees may be used to being told what their goals are, or they may be reluctant to express their aspirations. Others may be afraid of taking on too much, or feel uncomfortable sharing responsibility for achievement. So you may need to make them feel comfortable with the process and keep drawing them into the discussion. Listen to employees’ concerns and aspirations. Remember that to be successful, performance goals must incorporate the employee’s needs as well as yours. Seek mutual agreement. Buy-in is an essential ingredient for success. Employees should always be asked to sign off—literally—on the mutually agreed-upon goals. Seek a good fit between the employee’s career goals, your objectives, and the needs of the company. The ideal performance goals support all three.
• #21: Slide Show Notes Here are the main points to remember from this session on setting performance goals: Performance goals motivate and direct employee achievement. They are essential to the success of employees, your department, and the organization. Work together with employees to develop meaningful and useful goals. Link each performance goal to an action plan to ensure achievement. This concludes the setting performance goals training session. Give trainees the quiz, if appropriate.