Goal setting for employees | Step-by-step guide

Graphic image of a man standing while typing on a computer at small desk next to a potted plant

Table of Contents

There’s plenty of advice on the internet on how to plan goal setting for your employees. As a leader, you’ve probably tried a bunch of them already: balanced scorecards, the S.M.A.R.T. technique, the W.O.O.P. plan, and other catchy-sounding frameworks that haven’t really done the trick.

We know, it’s crucial to get goals set for you and your teams. Why? Research shows that the better you are at setting goals and objectives for employees, the higher their productivity, profitability, and performance. It probably isn’t so hard to understand why goals lead to performance — without a clear vision of the end goal, even your best performers will be taking shots in the dark. Clarity knocks a load off the workload and channels efforts in the right direction, leading to better performance.

Read this next: Maximize your workforce with high-performing teams

By doing goal setting ‘right’, you increase the probability of hits over misses. And yet, time and again, studies have shown that businesses aren’t quite there yet. Only 16% of the employees surveyed could confidently say that they understood their company’s vision or goals.

If you’re starting your 2025 with the quest for finding the right framework to setting goals and objectives for employees, consider your search over. PowerToFly is always here to help you with your talent management needs, so it’s only natural that we’ve got a step-by-step guide on workforce goal setting too!

Step-by-step guide to setting goals for employees

Step 1: Start with a career “GPS” for employees

A big reason why goals don’t work (including the ones we set for ourselves) is that we don’t really want to do what we set the goal for. Now, hear me out — say you have set a goal for an employee to advance their skillset. You’ve then provided them the resources to pick new skills up. For this example, let’s say you want them to learn a bit of UI/UX design, and the goal for this quarter is upskilling in that area. But, it’s likely to fail if they don’t really want to learn UI/UX. Naturally, we are more likely to see the goals being fulfilled if we set them based on what makes us feel, well, fulfilled!

So, when we are planning this goal-setting exercise, we have to take a step back and map out a career trajectory for our employees that at least partially uses their compass, too. What is their current professional satisfaction? What are their current duties at work? Where do they see themselves going from here? You are guiding them to reach their destination with this approach of goal setting; what we call the Career GPS.

If you’re looking for a good way to get started, our intuitive personal skills audit tool, SkillMeter, can help you (and your employees) understand your competencies, skills, and strengths better.

Read this next: How to craft the perfect employee development plan

Step 2: Reverse engineer goals based on company challenges

How do you usually go about setting goals? You probably look at where you want to be, what you need to get there, and that’s pretty much the whole plan. Right?

Now, picture this instead. Think about where you DON’T want to be. There are some obvious answers for a business: We don’t want to be operating at a loss, or we don’t want to run out of innovation. The standard stuff! Now, the second step is identifying things that could get us to those negative outcomes.

If you don’t want the business to go out of business due to bad finances, you have to identify everything in the present moment that could lead to that, right? This could be bad debt, over-expenditure, improper shareholder handling, etc. These are your core challenges at the moment. Studying them will also tell you the short-term challenges your business is likely to face.

So, instead of setting goals exclusively based on where you want to be, set goals that take you away from an unpleasant possibility. Once you identify these key challenges, you can reverse engineer your way from there to defining action points for each employee that help you resolve these challenges and steer far from trouble.

The reason this works is simple, but kind of morbid. Fear is a great motivator.

Read this next: Turning challenges into opportunities

Step 3: Focus goals on key behaviors

While goal setting, we may be missing another somewhat obvious insight; goals that work on the surface do not necessarily make deep impacts.

Think about it! Every business wants to set their teams up for better performance, better productivity, and better interdepartmental harmony. But those are all end results. When we only look at the final picture, we overlook everything that is stopping us from getting there.

To accomplish the end result, we have to account for the small steps in between. Or, simply put, do not focus on the goal; focus on the behavior that would lead to the goal.

So, if the goal is higher productivity, a key behavior that can inspire this result is employees taking ownership of their deliverables. This can happen when we entrust them with the kind of projects and responsibilities they naturally fit with. Another way to boost productivity is to first improve employee engagement. Research shows that engaged employees are also likely to be more engrossed at work.

One more example — if we want to set up a team that collaborates and communicates effortlessly, we have to look at what will get them there. Sure, the right tools and tech access are important. But all that investment is wasted if your employees don’t feel comfortable enough to interact freely. So, the key behavior that we should encourage is expression and open reception. When we identify these key behaviours, we start by setting up team-bonding exercises and safe spaces for all employees to communicate their needs.

In both the scenarios, focusing on the steps to the goal is the goal.

Read this next: The best way to set diversity & inclusion goals

Step 4: Design “stretch and recover” goals

As we’re all probably acutely aware, there is such a thing as “pushing too hard.” But it’s also true that goals feel better when we get a REAL challenge to conquer every now and then? In fact, when you accomplish a task you thought was difficult, you’re more motivated and confident of your own potential for the future. So, while we want to ‘stretch’ our teams’ capabilities a little sometimes by setting them up for higher benchmarks and ambitious goals, it’s important to find some balance with easier and more effortless tasks to help prevent burnout.

That second part is done with ‘recover’ goals.

So,what does that look like in practice?

If your sales team grew the order book by 30% in the previous quarter, it’s time to get ambitious. Set them up for 60% this time! That’s the stretch goal. And to help them unwind and stay motivated, ‘recovery’ goals can be simple tasks such as attending a webinar on digital sales or conducting a joint exercise with the product team to help with the ‘stretch.’.

Read this next: 12 tips for setting better goals

Step 5: Create a structure for goal-tracking

Screenshot of a Google Sheet with the title "Goal-Tracking." The column names are: goal name, objective owner, key metrics, start date, target date, progress, current status, next steps, notes/comments.


Now you have your goals set — the big ones, the small ones, and the recovery ones that work on employees’ holistic growth and on your business opportunities — all at once! Perfect! But there’s just one small piece missing.

Results!

Without a set framework or metric system in place to measure progress, your goals can’t become your true compass. So, here’s a quick way to complete goal setting for employees. Define success metrics. It will be different for each team, so you will also need to incorporate their managers into this discussion. Once the metrics are defined, you’ll also need tools to track them. This doesn’t need to be overly complex, you can use a simple Google sheet, for example.

Check out the template above for inspo.

Now, you have the metrics and the tools. All you have to do is tune in with your crew every few days to ensure the system is up and running, just as you planned. At the start, when you have just introduced the new goals, you could go for biweekly check-ins. With time, as you see growth and better understanding of the new vision, the frequency can be adjusted.

And That’s it! You’re all set with a goal framework that will work for your business and your employees both. Don’t forget to celebrate your little and huge victories. Rewards and recognition can play a huge role in keeping their morale up.

Read this next: The role recognition plays in employee retention

In fact, at the end of the year, we suggest hosting an ‘annual goal-check’ day, where every employee gets to present their wins in a fun way. A little Canva or Prezi touch can help make that pitch really creative. We see endless possibilities ahead of us as we mark the start of a new year!

The best time to start? Now, of course!


Looking for support as you build high-performing, inclusive teams? PowerToFly helps the world's leading companies attract top talent and retain engaged employees with solutions that simplify recruitment, enhance employee satisfaction, and drive long-term business success. Let's chat!

You may also like View more articles
Open jobs See all jobs
Author


What skills are you missing?