How To Set Realistic Goals For Employees

by Mike O'Neill

It's critical to your business to have motivated, engaged, and enthusiastic employees. Without happy employees, productivity and efficiency suffer. In addition, employees want and need to feel good about their work and understand how it contributes to the organization's success.

Cultivating employee engagement is a top priority in any industry. One of the most effective ways to make employees feel valued and driven in their job is to set performance and development goals that keep them moving forward and reaching success. However, goal setting has to be more than just creating a "to-do" list and checking it once a year. So let's take a deeper look at how you can set realistic goals to foster a culture of engaged and motivated employees.

What Is Goal Setting Exactly?

Goal setting is setting specific, measurable, and role-oriented objectives that employees work towards during their career with your company. Goals are a collaborative effort between a manager and a direct report, considering the employee's personal growth target, future role, and resource availability. 

Benefits Of Goal-Setting

When appropriately executed, goal-setting helps support talent development and benefits your organization, team, and the employee.

Boosted Engagement:

Providing employees something to work towards increases day-to-day work engagement, improving motivation and job performance. In addition, skill-building goals offer the means to achieve goals. 

Competitive Advantage:

InStride found that 96% of business leaders believe that investing in skill-building provided their company a competitive edge. In addition, aligning employee goals with business goals drives growth within an organization, which in turn, helps business growth.

Improved Retention:

InStride also found that 94% of employees leaving a company say they would have stayed if the company made a more significant investment in career-building education. That said, creating realistic goals and providing skill-building or continuous education helps reduce employee turnover.

Goal-Setting Challenges

Setting goals for employees has endless benefits for both them and your organization. There are challenges in setting goals that prevent you from experiencing the benefits. Some of the challenges are:

  • Unclear objectives
  • No alignment of goals to company strategy
  • Unrealistic expectations
  • No method to track the progress

The more aligned and specific the goal, the more likely the employee will rise to the challenge and possibly go above and beyond the goals. 

Defining Goals

Establishing goals is crucial for the team and individual performance and company growth. However, there are some essential considerations to take into account when setting goals:

  • Start at the top - Individual goals should begin by aligning with the team, department, and company objectives. 
  • It is collaborative - Encourages employees to take part in developing the goals. Managers support and initiate the process, but employees should be free to weigh in on the goals and provide insight to adjust the goal to meet their and your organizational goals. 
  • Goals should be measurable and attainable - Every goal should be within reach during the measured time period. Remember, goals are only effective when they're realistic. Otherwise, employees feel they'll never reach their goals and give up. This causes a decline in morale and, ultimately, turnover.
  • Focus on individual growth - Goal-setting is the opportunity to provide employee learning and development. When setting goals, include the employee's career development goals as part of the conversation.

Goal-Setting Frameworks

The most common goal-setting framework is the SMART method. It's still the most popular, and we will get to that, but let's look at other frameworks you can use. 

Whatever framework you select, ensure it aligns with your organization's goals and growth model.

OKR Goal Setting

OKR stands for objectives and key results. This framework is used by individuals, teams, or entire organizations by setting actionable challenges and assigning measurable outcomes. When determining the goal, the objective and key results are clearly defined to provide a coherent path to follow.

The objective is a high-level goal, setting concrete expectations for a specific project. The key results are data points or activities that track how a team or individual plans to reach the objective. An example of a personal OKR is:

  • Key result 1: Have lunch with a different colleague once a week.
  • Key result 2: Organize a company-wide happy hour.
  • Key result 3: Collaborate with one or more teams on a project.

As you can see, there are multiple ways OKR goal-setting can be used.

MBO Goal Setting  

MBO stands for Management by Objectives. This strategy is designed to improve employee and company performance to boost engagement through a rewards-based system. Here, the manager and direct report work together to identify achievable targets that align with the organization's more significant goals. 

When a goal is reached, there is typically a reward, for example, monetary or other forms of recognition like an award or promotion. MBOs are also used to set organizational or department-wide goals.

An organizational MBO goal may look like this:

  • Reduce turnover by 15%
  • Increase diversity by 30%
  • Increase Net Promoter Score to 80 or above

These goals are achievable and measurable, keeping the employee and the organization accountable for meeting or exceeding the goals. 

SMART Goal Setting

SMART stands for specific, measurable, achievable, relevant, and time-bound. It's the most common goal-setting framework used by organizations today. In addition, it's common to include efficacy and feedback - SMARTER at the end of the acronym to emphasize the importance of evaluation in goal-setting. Finally, the SMART framework provides clear steps to help employees and organizations achieve goals.

An example of a SMART goal looks like his:

S – Gain the skills and experience necessary to become a Team Leader at my company.

M – Complete training courses A, B, and C to apply for the position.

A – Have the necessary skills and experience and access to employer-sponsored continuing education that helps achieve the goal.

R – Succeeding in current role and career path fits larger life goals and company goals.

T – Aim to become a Team Leader in the next year.

Examples of Employee Goal-Setting

Employees can utilize several different ways to set goals. The goals can range from personal to organizational. 

Role Specific

These are goals employees set for their current position or positions they strive to hold within the company. These goals can center around job performance, advancement, or personal productivity.


These are goals that individuals and groups set for themselves and each other. Team-specific goals help organize and strategize your team and clearly outline the roles and responsibilities of the people that make up your team. 

Individual Growth

These goals are set by the employee and may or may not specifically relate to work but improve job performance and engagement. 

The common thread of work-related employee goal-setting is the need for skills development. For example, an employee goal might require a new degree, a certification, or more comprehensive on-the-job training to achieve a specific skill set. Help employees set and reach their goals. Companies must prioritize skill-building through initiatives that make it possible, like a workforce education program. 

Start Setting Goals Today

The benefits of prioritizing employee goal-setting are critical to improved employee engagement and retention. Plus, employees will know that management cares about their goals and achievements. 

Bench Builders helps manufacturers implement training and organizational improvements to engage employees and grow businesses. You'll experience the benefits of our coaching, training, and strategic planning with our proven methods. Check out the get Unstuck on Target podcast for discussions centered around business growth. Or, schedule a call and learn how I can help you improve your company’s goal setting results..

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