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7 Tips for Effective Employee Goal-Setting

Human Resources

One of a manager’s key responsibilities is encouraging the growth of his or her employees. By setting measurable and attainable goals, the manager not only guides improvement in employee performance, but can actively help strengthen the business and enhance its reputation as an employer of choice.

Other benefits of setting goals for employees can include:

  • Helping employees focus more closely on the company’s short-term and long-range success
  • Establishing guidelines and criteria for a successful employee performance review and/or company bonus program
  • Driving deeper employee engagement

Here are seven tips for setting employee goals that can help make these benefits a reality:

1. Set Goals That Align with Company Objectives

Each employee’s goals should be tied to the company’s overall growth strategy in order to be effective. When employees understand how their individual role and responsibilities contribute to organizational growth, they’re often more focused and motivated to achieve goals that result in success for both the business and themselves. Consistently communicating strategic business goals (and regularly emphasizing the company mission) can help to keep employees engaged in the work they do.

2. Invite Employees to Identify Job-Specific Goals

Managers may have certain goals in mind for each employee, but they will likely get insightful answers if they ask employees to identify goals specifically related to their individual jobs. There’s a big difference between imposing goals on employees and encouraging them to suggest goals of their own. When their suggested goals align with company objectives, a manager can help develop action plans to attain those goals.

3. Set SMART Goals 

Asking an employee to “do a better job” doesn’t constitute an effective goal. Every goal should be set within the SMART framework:

  • Specific: A goal that clearly states who is involved, what you want accomplished, where the goal will take place, within what timeframe, what requirements and constraints are involved, and the benefits of achieving the goal
  • Measurable: Setting concrete criteria that measures progress towards reaching the goal
  • Attainable: Improve the likelihood of success through setting goals that are within the employee’s reach
  • Relevant: A goal closely aligned to the company’s overall objectives
  • Timely: A goal grounded within a specific timeframe

4. Emphasize Attainable Goals 

Goal-setting sometimes fails when the objective is too ambitious or simply unattainable, given the employee’s skill set and available resources. Burdening an employee with an unattainable goal can lead to frustration with the process and a resulting lack of motivation for further improvement.

5. Set Consistent Goals for Employees with Similar Responsibilities 

Goal-setting is usually unsuccessful when framed as a contest or competition among employees. Avoid setting different goals for employees with similar responsibilities and refrain from encouraging internal rivalries, which can lead to diminished morale and resentment for managers.

6. Reward Employees Who Achieve Their Goals 

It’s critically important to recognize employees who set goals and then achieve (or exceed) them. Not only does such a reward (a bonus, certificate, public acknowledgment at a staff meeting, etc.) honor that employee’s efforts, it demonstrates clearly to his or her co-workers that the company values this type of commitment and hard work — thus providing further initiative from the rest of the workforce. When such hard work goes unnoticed, employees can justifiably feel there’s no point in working so hard and may begin looking for a new job elsewhere.

7. Work Closely with Employees Who Fall Short of the Mark 

Not every employee will successfully attain their goals, regardless of how hard they try. Ideally, their manager is periodically assessing progress and stepping in to provide assistance where needed. In any case, when the agreed-upon deadline arrives and goals haven’t been met, there should be an in-depth discussion about what went wrong, combined with encouragement to try again and/or rework the stated objectives.

When employees fall short, avoid recriminations or other negative responses. Focus on their sincere attempts to succeed and give them the resources necessary to get it right the next time.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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