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Setting Employee Goals: The Why and How of Goal-Setting

Setting goals is an important part of an employee’s development. It lets the employee know the expectations of management, and how success will be measured. Setting goals allows employees to grow within their current positions, become more effective at their jobs and increase their possibilities of advancement.

Here’s What We’ll Cover:

What Are Employee Goals?

Why Is It Important to Set Goals?

How Do You Write Goals?

What Are Personal Development Goals?

What Are Employee Goals?

Employee goals are targets or results an employee is tasked with achieving. Goals are usually related to one’s current position, with the possibility of some goals related to advancement at a company.

Many businesses set goals once a year, and they are later used to measure an employee’s performance by comparing the goals to the results achieved. This performance rating then determines the raise and bonus amounts awarded to an employee.

Goals should be long term, so that managers can help set milestones that the employee can realize, on the way to achieving them.

Why Is It Important to Set Goals?

Setting goals, and defining how they will be measured, allows an employee to better prioritize and plan his time.

Employee goal-setting is often policy at larger organizations. Supervisors are expected to work out the goals with employees, monitor their progress, and provide regular feedback to ensure success.

This process will also help the supervisor to conduct a more informed review at the end of the year.

How Do You Write Goals?

Goals should be SMART. SMART is an acronym for Specific, Measurable, Assignable, Realistic and Time-Related.

Here’s a breakdown of SMART:


What exactly is being asked of the employee? The goal should be clear enough that anyone can understand it.

For instance, a goal could be: “Increase customer sales at our downtown Chicago store”.


How will success be measured? If there’s no metric, a supervisor and an employee can argue about whether or not the goal was actually met.

A metric could be: “Increase customer sales at our downtown Chicago store by 20%”.


Can this be done by the employee alone, or does he need help? What resources are at the employee’s disposal, or can be assigned to him? Maybe the employee needs help from marketing, or some specific staff at the downtown store. Do these other team members have the time to help?


Should this project be undertaken? Is 20% even feasible? Perhaps the store increased its sales already in the last quarter by 8%, and maybe that was considered a major milestone.

Goals need to be attainable. If the bar is set too high, the employee may be paralyzed by inaction, and not be able to contribute anything.

Also, one should always consider when setting goals: Does the goal match up with the company’s objectives?

If an employee doesn’t know when the goal is expected by, then the goal may never be achieved.

A metric with a time factor could be: “Increase customer sales at our downtown Chicago store by 20% in the first quarter”.

SMART goals were developed in 1981 by George T. Doran in a magazine article entitled “There’s a S.M.A.R.T. way to write Management’s Goals and Objectives”.

For more on this subject, consult What Are Smart Goals?

Once they are set, goals should be agreed upon by both the supervisor and the employee, in writing.

What Are Personal Development Goals?

Personal development goals are goals not directly related to a business, but one’s own development as a human being. However, realizing them can help improve one’s performance working with individuals or teams throughout a career.

Personal development goals can also be life-long goals, meaning the learning is constant for some of the goals, and they are never fully achieved.

Personal development goals include:


The understanding that one is an individual, separate from others and the environment.


This is the understanding of one’s own feelings, preferences and motivations, and how they affect actions.

Emotional Intelligence

This is the ability to understand one’s own emotions, and those of others (through empathy), and using that information to guide one’s behavior.

Building Self-Esteem

This is about understanding one’s own worth (subjectively), and building confidence around that.

Developing Skills

Learning a particular ability or talent. For instance, one may take a course in crisis management, or a new language (even if these courses are not required of the individual in his current position). The reasons for taking the courses may be personal, perhaps the subject interested the person, or he felt he may need these skills later in his life.


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