How to set employee performance goals: Tips and examples

Remote work, flexible hours, and cutting-edge technology are just a few of the elements that have redefined today’s workplace. But despite these seismic shifts in where and how we work, one thing remains constant: the importance of employee performance goals.

Not only can employee performance goals help maximize the potential of your team, but they can also benefit your business as a whole. Goal setting for employees may also lead to better collaboration, increased sales performance and stronger engagement.¹

Not sure how to set employee performance goals? Whether you’re gearing up to hire your first employee or looking to reinvent your business’s goal-setting strategies for existing hires, find helpful tips and example frameworks in this guide.

What are employee performance goals?

Set by employers to evaluate performance, employee performance goals are specific, measurable objectives that help assess an individual’s efforts and achievements within their role. These goals align with both the employee’s professional growth and the organization’s broader objectives, providing clear benchmarks for success and are one way to manage employees.

For employees, these goals can be tailored to support individual aspirations such as promotions, salary increases or mastering new skills. For employers, these goals ensure alignment with team and company priorities while driving engagement and productivity.

Here are three key categories of employee performance goals examples that can play a pivotal role in an employee’s success:

• Job performance and role-specific goals: Employers often set goals to ensure employees excel in their specific roles and meet expected standards. These goals may focus on enhancing productivity, quality, or efficiency. Some examples include: Increase sales revenue by 15% over the next quarter by focusing on upselling and cross-selling techniques. Respond to 95% of customer inquiries within 24 hours to improve client satisfaction ratings. Streamline project workflows to reduce completion times by 10% by the end of the year.

• Skills development goals: Developing skills not only helps employees grow but also equips them to contribute more effectively to the company. Employers may focus on technical skills, leadership abilities, or interpersonal communication.Some examples of skill development goals include: Complete advanced Excel training within three months to improve data analysis capabilities. Deliver three internal presentations this year to strengthen public speaking and leadership confidence. Earn a professional certification, such as a PMP or CPA, by the next performance review period.

• Contributions to company growth: Goals in this category align individual performance with broader company objectives, fostering a sense of ownership and impact. These might include goals such as: Identify and implement two cost-saving measures that reduce department expenses by at least 5%. Develop and launch a new customer feedback program by Q3 to gather insights for product improvement. Mentor two junior team members over six months to prepare them for increased responsibilities.

By incorporating these employee goals in performance review processes, employers can ensure goals remain actionable and meaningful. During evaluations, tracking progress on these employee goals for performance review provides a clear framework for assessing success and identifying areas for growth.

Why is employee goal-setting important?

By setting clear and attainable employee performance goals, organizations can enhance motivation, focus, and productivity among their teams. Performance goals can also provide a basis for feedback and recognition, driving employee retention and fostering a culture of continuous improvement.

In fact, aligning employee goals with business objectives can lead to a significant increase in productivity and efficiency, up to 35%.¹

Here are some industry-specific examples of what that might look like:

• Healthcare: Set goals such as reducing patient wait times by 10% through improved scheduling software, or enhancing care quality by achieving higher patient satisfaction scores in surveys.

• Technology: A software engineer may have a goal to reduce application bugs by 20% through peer code reviews and automated testing.

• Retail: A store manager might aim to increase sales by 15% by implementing cross-selling strategies and staff training programs.

Having clear goals provide measurable feedback mechanisms, which are crucial for performance reviews and recognizing individual contributions. This approach not only drives individual and organizational success but also helps build a culture of continuous improvement and recognition, which can help retain top talent and boost overall team morale.

How to set employee performance goals

So how many performance goals should an employee have? Read on for strategies for setting goals with your employees.

Set SMART goals

Need some inspiration for creating employee performance goals? Try the SMART method. Designed to set specific, measurable goals, this popular framework can help guide employees and employers when narrowing down their objectives.⁴

SMART is an acronym that stands for:

Specific: Goals should be clear, well-defined, and answer the "what," "who," and "why" of the objective. Here are some examples in different industries:

• Sales: Close five new client accounts within the next quarter by targeting high-value prospects.

• Healthcare: Ensure all patient follow-ups are scheduled within 24 hours of their initial appointment by implementing a streamlined booking system.

• Customer Support: Resolve 95% of customer complaints within 48 hours to improve customer satisfaction scores.

Measurable: Goals should be quantifiable, allowing progress to be tracked and measured with established, concrete metrics. Some examples of measurable goals include:

• Marketing: Increase social media engagement rates by 20% in three months by posting daily and using analytics to refine strategies.

• Finance: Reduce monthly expense report errors by 10% by introducing a new review checklist.

• Education: Achieve a 90% pass rate in professional certification programs by providing tailored training materials.

Achievable: Goals should be challenging yet attainable. They should stretch employees to perform at their best while considering available resources and capabilities.

• IT: Complete the migration of all internal systems to cloud-based solutions within six months without disrupting ongoing projects.

• Retail: Boost average transaction value by $5 through upselling and targeted product recommendations.

• Construction: Reduce project overruns by 15% by adopting new project management tools.

Relevant: Goals should be aligned with the overall objectives of the individual, team, department, and organization.

• Human Resources: Develop a new onboarding program within three months to improve employee retention rates by 10%.

• Logistics: Increase delivery efficiency by implementing route optimization software to achieve a 95% on-time delivery rate.

• Legal: Reduce contract turnaround time by 20% through the adoption of standardized templates.

Time-bound: Goals should have a specific timeframe or deadline.

• Engineering: Launch a new product prototype within six months, ensuring it meets quality and safety standards.

• Hospitality: Train all staff in updated health and safety protocols by the end of the next quarter.

• Nonprofit: Secure three new funding partners for the upcoming fiscal year within the next six months.

Using these examples, both employees and employers can align efforts with SMART criteria to ensure clear, achievable outcomes that benefit individuals and organizations alike.

Examples of SMART goals for employees

Here’s an example scenario of how to write performance goals using the SMART method: Let’s refer to the marketing associate’s goal of creating weekly email campaigns.

By following the SMART method, the employee would set tighter parameters for their goal. It may look something like this:

• Specific: Increase customer acquisition by 10% by creating one email campaign per week for 12 total weeks.
• Measurable: The goal is quantifiable, with a specific metric (e.g., create an email once per week over 12 weeks to boost customer acquisition) that can be measured to track progress.
• Attainable: While challenging, the goal is realistic and achievable.
• Relevant: The goal aligns with the organization's objective of increasing sales.
• Time-bound: The goal has a set time frame for completion.

Employee performance goal examples

Below is a guide on what type of goals lead to the highest levels of employee performance. Before creating employee performance goals for your team, use these examples as a guide:

• Project management goals: Successfully lead and deliver three projects on time and within budget in the next quarter by utilizing project tracking software and coordinating regular check-ins with stakeholders. Focus on managing resources efficiently and mitigating risks to ensure deliverables align with client expectations and company objectives.

• Professional development goals: Obtain a project management certification within the next six months to be eligible for a senior promotion, showcasing expertise in methodologies such as Agile or Scrum. By completing this certification, employees can take on more complex projects and mentor junior team members to foster team growth.

• Collaboration goals: Implement a project management system by end of year to improve cross-functional collaboration and streamline communication between departments. The system should include tools like shared task boards and real-time updates, ensuring all teams stay aligned on priorities and deadlines.

• Communication goals: Improve email response time to within 24 hours for all incoming client inquiries by setting up automated reminders and prioritization workflows. This may help clients feel valued and helps build stronger relationships, enhancing customer satisfaction and loyalty.

• Sales and revenue goals: Increase sales revenue by 15% in the next quarter by identifying new business opportunities through market research and targeted outreach campaigns. Focus on expanding into untapped segments, building partnerships, and upselling to existing clients to drive growth.

• Quality goals: Implement a customer feedback system within three months to identify areas for improvement in product quality, such as usability or durability. Analyze collected feedback regularly and integrate actionable insights into product updates to maintain a competitive edge.

• Innovation goals: Contribute two unique ideas to improve existing products or processes every quarter by staying informed about industry trends and customer needs. Focus on creative solutions that enhance efficiency, reduce costs, or address unmet client demands, demonstrating a proactive approach to innovation.

Keep in mind that this is just a short list of employee performance goal examples. To maximize the potential of your team, employee performance goals should be tailored to the specific needs and targets of each employee and your organization.

What to do if employees fall short of performance goals

When employees fail to meet their KPIs and metrics, employers should approach the issue constructively. Rather than viewing underperformance as a problem to be punished, it should be treated as an opportunity to identify challenges, provide support, and develop strategies for improvement.

One tool that can be used to address underperformance is a performance improvement plan. This formal document outlines specific areas where an employee is falling short, sets clear goals, and provides actionable steps to help them get back on track. Regular check-ins can ensure accountability while demonstrating that the organization is invested in the employee’s success.

Another factor to consider is whether employees have access to adequate training and resources. Sometimes, underperformance is a symptom of a skill gap rather than a lack of effort. Offering targeted training programs or pairing employees with mentors can help bridge these gaps. Sharing productivity tips such as time management techniques can empower employees to work more efficiently and align their efforts with organizational goals. Ultimately, the goal is not just to address individual underperformance but to create a culture where employees feel supported and guided to succeed.

Looking for more employee best practices? Check out our guide to hiring freelancers for your business and retention strategies to support your employees.