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Why Goal Setting is Good for Employee Performance?

Effective Goal Setting for Employee Performance: SMART Goals

The main goal of every business is all round success including financial success and a great brand image. However, all of this does not come without great employee performance. Employee performance remains critical to organisational performance. If the managers can ensure that the employees are performing at their best then it will ensure that the organisation’s objectives are being met. It is why there is so much emphasis on employee performance management. However, the most critical part of managing performance is  goal setting. If you do not set clear goals, employees will be working in an unknown direction or one of their own choosing. This makes it difficult to achieve organisational goals. It is because there will be no alignment between individual goals and organisational goals.  These two must remain in alignment if the organisation’s production goals are to be met. However, unclear goals can also become a critical reason for employee non performance.

The goal setting process is an important part of employee performance management. This is an area where the HR and line managers must collaborate for ongoing performance management. Inside many organisations, performance management takes the form of once an year affair. It is not something to be undertaken just once a year because that will not help  business achieve its goals. If employees are not provided regular feedback and guidance the performance management system will not be effective. Goal setting has both short and long term advantages. It can help businesses reach their target more efficiently and keep the staff more focused. Managers must therefore focus on setting SMART goals for their employees.

What are SMART Goals?

S: S in the SMART framework stands for specific. A goal must be specific which means should clearly specify your expectations from your staff. How much you expect of them and when must be laid out clearly. When goals are specific, it grows easier for the managers as well as employees to measure their progress and stay focused till completion.

M : M in the framework stands for Measurable. Many organizations use metrices to measure the progress of their employees towards their goals. Using matrices and giving the employees measurable targets helps them remain motivated and on track.    

A: A stands for attainable. You do not set unachievable targets unless you want your employees to grow frustrated. It is why they should not set unrealistic goals. Goals have to be realistic to be achievable or setting too big or small goals will lead to decline in performance.

R: R stands for relevant. The goals must be relevant to employees’ job and performance and the employees must understand the relevance of the goal to the attainment of the objectives. This also keeps employees motivated and focused.

T: T is for Time bound. You must set clear deadlines that  should not be big or small. You must provide your employees na optimum time frame to accomplish their set targets.

If you set SMART goals it helps you plan and manage employee performance. By setting SMART goals you make your objectives achievable. However, apart from setting these goals you need focus upon their alignment with the overall organisational objective. For this you must communicate your objectives before the entire organisation. Leadership must also think over organisation-wide and cross functional collaboration since it will help the various functions sign their goals and work in tandem.  It also helps eliminate performance bottlenecks and barriers. SMART goals also mean higher coordination and less wastage.

Organisational strategy can be executed with greater efficiency and higher focus if all the  functions are working in the same direction. It is why apart from setting goals for the individual employees, leadership should set clear goals for the various functions and teams. It will provide flexibility, ensure that  all the work is completed in time, projects and managed with greater efficiency and it will also allow the organization more space to adapt to the ongoing changes in the macro environment. It will also keep your processes agile while giving you the ability to manage and utilise your resources with higher precision and less wastage.

– Employees’ efforts will be focused and consistent.

– Help them understand their responsibilities better.

– Help improve organization-wide accountability and productivity.

After having set SMART goals, it is the managers’ duty to measure and track progress. They must watch if the employee are making progress and if there are any hindrances to optimum performance.  Goals can be both short and long term. If you are working on a project, you can assign short term goals to your employees that  need to be achieved in the short term – for example weekly or monthly. However, goals still have to be specific whether short term or long term goals. Managers can use digital tools to create shared goals that  are to be achieved by a team. Information systems can also be of help in this regard. However, there are goal setting software available in the market to make the managers task easier.  These tools will improve their efficiency and help track progress. Such software are especially helpful for the project managers. The best thing is to divide the larger goals into smaller goals and assign milestones. This makes tracking easier and at each stage you can evaluate progress as well as introduce new resources or tools if necessary. It also makes it easier to provide the right support to your employees.

Goal setting is not limited to just achievement of financial targets. You also get to achieve other several critical things by its help. It helps you manage a high energy and high performance environment where everyone works with focus and dedication.  For example a company wants its employee engagement level to be higher. However, its employees  constantly lose focus, grow overstressed or miss their deadlines. It asks its managers to set SMART goals. The managers bring in tools and software to help them accomplish this task. based on the kind of job and its requirements, the mangers introduced SMART goals which gave the employees a clear idea of what they will be doing.

Now the employees knew their direction and are not in dark about what they are doing and what is expected of them. This helped them retain their focus because they can now themselves keep an eye on their performance and manage it. This led to a sharp jump in employee engagement level. When the goal is clear in sight, the way to it becomes clear because employees understand what they are trying to achieve. Without clear goals, all performance would have been wasted and this would have led to further decline in employee morale. when employees do not see their contribution bearing fruit, it can lead to low morale and high dissatisfaction. Thus, goal setting can help you manage all these aspects of your employees’ performance and improve  employee engagement level and satisfaction.

Individual employees’ performance matters. So that the employees make the right efforts and dedicate them towards the attainment of organisational objectives, they must have clear goals before them. The entire process grows easier if managers are using IT based tools and software. Project managers especially stand to benefit a lot from goal setting and would have to do a lot less of explaining before their employees. Apart from individual employees, setting goals for teams and functions is also critical which can also be performed using these software and tools. The effect is directly felt on employee performance, organisational productivity and the bottom line.