The Complete Guide To Performance Review Goal Setting
Goal Setting Creates Clarity and Motivation: Clear, measurable goals established during performance reviews provide employees with direction, purpose, and accountability, transforming reviews into meaningful growth opportunities.
Different Types of Goals Serve Unique Purposes: Performance, development, behavioral, and other goal types each address specific areas of growth, from skill enhancement to fostering collaboration and achieving business outcomes.
Frameworks Ensure Goals Are Actionable and Relevant: Using proven frameworks like SMART, OKRs, or FAST ensures goals are structured, measurable, and adaptable to evolving priorities, helping both employees and organizations succeed.
Performance reviews, love them or dread them, are here to stay. While they may conjure images of awkward conversations and jargon-filled forms, they’re also a golden opportunity to align employee ambitions with organizational goals.
Done right, performance review goal setting can transform these meetings from dreaded obligations into growth-focused, inspiring conversations.
This guide will take you through everything you need to know about performance review goal setting—from the types of goals to set to tips for making the process a win-win.
Why Goal Setting in Performance Reviews Matters
Imagine heading out on a road trip without a map (or GPS, for those under the age of 30). That’s what work can feel like without clear goals. Setting goals during performance reviews gives employees direction, purpose, and a sense of ownership over their professional growth.
But let’s be real, goal setting can be difficult. Whether it’s vague objectives (“just do better”) or overly ambitious targets (“double your output by next week”), or a lack of ways to track and measure progress (performance management tools), challenges abound.
Structured goal-setting, however, can eliminate ambiguity, boost motivation, and ensure alignment between employee efforts and organizational objectives.
Types of Goals to Set During a Performance Review
A performance review isn't just a review of what someone is doing at work, but how they're doing it. Identifying certain types of goals can be useful in helping you challenge people in more meaningful ways. Just don't get too carried away.
"I have found 3 is a magic number," Stefano Grossi, Chief Product and Technology Officer at FreshBooks said. "And for each goal, no more than 3 steps to achieve them. When building the action plan, remember to use the employee strengths to address their areas of improvement, and do it within the boundaries of the team objectives. Why? Nobody needs theoretical goals, or generic “training”, that they’ll never be able to use in their day-to-day life. You want a very actionable plan, starting today to help what the team is trying to achieve tomorrow."
Here are some goal types that will frequently appear in reviews.
Performance goals
Performance goals focus on achieving specific job-related outcomes. These are the bread-and-butter of goal setting, emphasizing measurable deliverables tied to an employee’s role.
Examples:
- Increase sales by 15% in Q1.
- Reduce project turnaround time by 10% over the next 8 weeks.
- Maintain a customer satisfaction score of 90% or higher in the first half of the year.
Performance goals tie directly to company KPIs to show employees how their work impacts the bigger picture. But these goals are ultimately focused on behaviors the organization wants to see displayed in driving the desired business outcomes.
You can use these performance goals examples as a jumping off points.
Development goals
Development goals typically come as part of a broader employee development plan and target skill-building and professional growth. These goals are perfect for employees looking to level up and expand their capabilities to create a more flexible career path.
Examples:
- Develop project management skills by completing a Project Management Professional (PMP) certification course within the next six months and leading one cross-functional project afterward.
- Enhance writing and communication skills by drafting three client-facing reports or proposals each month for the next quarter, with feedback from a mentor or supervisor on each draft.
- Expand knowledge of industry trends by reading one relevant book or journal article per month and presenting key insights during monthly team meetings for the next six months.
Why It Matters: Employees want to grow. LinkedIn’s Workplace Learning Report found that 94% of employees would stay longer at a company that invests in their career development.
Behavioral goals
Behavioral goals focus on interpersonal skills, workplace behavior, and cultural alignment. These are crucial for fostering a collaborative, empathetic, and productive workplace. These are different from other goals in that they are not always time-bound, but ongoing.
The data used to measure them will be qualitative, generally coming from 360-degree feedback or some other type of peer review.
Examples:
- Improve active listening during team meetings by summarizing others’ ideas before responding.
- Foster better collaboration by contributing to two cross-departmental projects this quarter.
- Practice empathy in client interactions by proactively asking clarifying questions.
These goals can be helpful in managing a toxic or difficult employee. A recent example was posted on Reddit. Managers filled the comment section with suggestions for how to set goals for this employee.
Productivity goals
Productivity goals focus on increasing efficiency and output while maintaining or improving the quality of work. These are some of the most common goals that every employee experiences from onboarding through the entire employee lifecycle.
Examples:
- Complete three client proposals per week with an error rate of less than 1% in Q2.
- Automate at least one repetitive task each month to save five hours of work weekly by the end of the quarter.
- Increase personal sales by 20% this quarter by improving follow-up rates with leads.
Why It Matters: Realistic productivity goals are good for the employee's well-being. A Workhuman survey revealed that nearly 83% of respondents had productivity anxiety with younger generations experiencing it multiple times per week.
Communication Goals
Communication goals aim to improve clarity, effectiveness, and engagement in verbal and written interactions. These will help employees reduce misunderstandings and therefore, support a positive work environment and alignment within their teams.
Often, these are similar to behavioral goals in that they are an ongoing adjustment to the employee’s actions.
Examples:
- Improve email response time to within 24 hours and reduce miscommunication by summarizing key action points in all emails.
- Deliver weekly updates in team meetings with clear action items and a concise summary of progress.
- Strengthen public speaking skills by presenting one topic in monthly team meetings and seeking feedback from peers.
Leadership goals
Leadership goals focus on developing the ability to inspire, guide, and influence others to achieve organizational objectives. For those with aspirations of climbing the organizational hierarchy, these goals are an important part of the career mapping process.
Examples:
- Mentor two junior team members over the next six months, meeting bi-weekly to support their professional growth.
- Lead a cross-functional project by the end of the quarter, ensuring on-time delivery and positive team feedback in post-project surveys.
- Complete a leadership development certificate within the next six months and apply learned techniques in team meetings.
When it comes to leadership goals, perhaps more than any other type of goal, there is no universal experience or blanket approach to setting these goals. Journeys into leadership are unique to the person, therefore, your approach to developing these goals needs to vary by the employee.
“Leadership training programs need to address diverse team challenges and identify individual leadership styles to set managers up for success,” Char Stark, People Operations and Talent Strategist at Beacon HR said.
Problem-solving goals
Problem-solving goals aim to enhance critical thinking and decision-making skills to effectively address challenges and implement solutions.
Many employees possess problem-solving abilities but haven’t fine-tuned these skills because they aren’t challenged in their roles enough to use them on a regular basis. This type of goal makes for excellent stretch goals due to their inherent need for creative thinking.
Examples:
- Resolve at least two customer complaints weekly by identifying root causes and implementing solutions within 48 hours.
- Develop a new workflow to reduce the team's reporting errors by 25% within the next quarter.
- Create and present a plan to address a recurring operational bottleneck within the next 60 days.
These are good examples, but there are some common challenges that may arise. The first is that employees may not feel empowered to take these on without being asked to, so you may have to help them identify these opportunities for them to develop their influence within the organization.
Another is, they may not inherently take the right approach, may lean toward thinking the answer is simpler than it is, or simply don’t have the know-how or desire to find answers to tough questions.
Time management goals
Time management goals are designed to improve the ability to prioritize tasks, meet deadlines, and maximize productivity.
These goals are something you might expect to see as part of a performance improvement plan or as a supplement to the aforementioned productivity goals, but they can be applied to any employee depending on the context.
Examples:
- Use a task management tool to plan daily priorities and complete at least 90% of high-priority tasks each week for the next month.
- Reduce meeting durations by implementing clear agendas and ensuring meetings do not exceed 30 minutes whenever possible.
- Allocate two hours of uninterrupted focus time daily to work on complex projects for the next quarter.
Teamwork Goals
Teamwork goals focus on fostering collaboration, mutual support, and productive interactions within a team. They’re similar to behavior goals in that you’ll need some 360-degree feedback in order to properly assess them.
Examples:
- Contribute to at least one team brainstorming session per month and offer three actionable ideas during each session.
- Act as a liaison between two departments during a collaborative project to ensure alignment and clear communication by project completion.
- Increase team cohesion by organizing one informal team-building activity every quarter.
“Setting teamwork goals is the heart of organizational performance management,” Ben Levitan, CEO of Cedalion Partners said. “It's not done on email or even in one meeting. Setting teamwork goals is about connecting the head (quantitative, measurable, etc.) with the heart (emotion, passion, perseverance).”
How To Set Effective Goals For Performance Reviews
You can take any number of approaches to setting goals. You can have long-term goals that are measured over the course of a year or short-term goals that evolve with each quarterly performance review.
Regardless of which framework or cadence you pick, the first thing you have to do is identify an area of opportunity or improvement and ensure that the person you’re setting the goal for has bought into it as part of their path forward. Without that, you’ll be spinning your wheels on improving performance.
Once you’ve captured their enthusiasm, you can then identify the right framework for the goals you want to set, assuming you don’t already have a system in place. Here are some common solutions.
SMART goals framework
SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound. They’re the gold standard for actionable, clear goal setting.
Benefits:
- Clear expectations eliminate misunderstandings.
- Progress is easy to track with measurable milestones.
- Employees feel more focused and motivated when goals are realistic and relevant.
Example: Instead of “Get better at presentations,” a SMART goal might be: “Deliver one 10-minute presentation to the team by the end of the month and receive feedback from at least two colleagues.”
OKRs (Objectives and Key Results)
OKRs involve setting ambitious objectives paired with measurable key results. They’re great for innovative or fast-paced teams where stretch goals align with individual and organizational missions.
When to Use: OKRs shine in teams with big visions. For example, a marketing team might set this OKR:
- Objective: Boost the company’s brand presence online.
- Key Results: Publish 10 blog posts, achieve 50,000 page views, and increase social media followers by 20%.
FAST goals framework
The FAST framework focuses on making goals Frequently discussed, Ambitious, Specific, and Transparent. Unlike traditional goal-setting methods, FAST prioritizes continuous conversations, bold objectives, and organizational visibility to ensure alignment and accountability.
Benefits:
- Frequent discussions keep goals adaptable and aligned with changing priorities.
- Ambitious objectives inspire innovation and encourage teams to stretch their capabilities.
- Specific goals provide clarity, reducing ambiguity and driving focus.
- Transparency fosters accountability and collaboration across teams.
Example: Instead of a general goal like “Improve sales,” a FAST goal might be:
- Frequently discussed: Progress is reviewed weekly in team meetings.
- Ambitious: Increase sales by 25% in a competitive market.
- Specific: Focus on three key product lines with targeted campaigns.
- Transparent: All team members can see the goal and progress updates in the company dashboard.
These are just three frameworks you can try. There are a variety of other goal setting techniques that can drive performance.
Feedback and adjustment loop
Goals aren’t static. Life happens, markets shift, and priorities evolve. Regular feedback ensures goals remain relevant and achievable. Two factors that your feedback loop can be built around include:
- Setting Milestones: Break long-term goals into smaller chunks. For instance, a year-long project goal might have quarterly deliverables.
- Regular Check-Ins: Schedule monthly one-on-ones to review progress and make necessary adjustments so that you have an element of real time performance management.
Tips For Successful Goal Setting In Performance Reviews
- Be specific and clear: Vague goals lead to vague results. Spell out exactly what’s expected, why it matters, and how success will be measured.
- Align goals with career development and company objectives: Balance individual growth with organizational needs. For example, an employee aiming to learn advanced Excel skills can tie this to improving team reporting processes.
- Regularly monitor and adjust goals as necessary: The best goals are flexible. Regular check-ins keep them relevant and help employees navigate roadblocks.
- Encourage employee ownership of goals: People are more likely to achieve goals they’ve set themselves. Involve employees in the goal-setting process to boost buy-in and accountability.
- Provide resources and support for goal achievement: Goals without resources are just wishes. Whether it’s funding for a training course, time for professional development, or mentorship, ensure employees have what they need to succeed.
Tools For Goal Setting
There are a number of tools that can help you set meaningful and measurable goals for employees. As always, we’re looking at the best options in the market to help your people practices be as effective as possible and have broken down our favorite goal setting software below.
What's Next?
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