Adapted from content excerpted from the American Express® OPEN Small Business Network
Setting goals with your employees is an essential element of effective human resources management.
There are a variety of reasons to set employee goals. Goals can: focus employees on the purpose of your business; enhance your chances of success by applying your employees efforts to your company’s long-and short-term success; and motivate employees. Employee goal-setting is also an important part of an employee appraisal or bonus program because without goals, achievement is not easily measured.
To be effective, employee goals must be clear and understandable. Each goal must be concrete, attainable, and critical to the growth of your business. The tips below will help you set good goals:
Set goals with employees
Employees are often the best source for information about what job-specific goals will contribute to overall increased productivity, responsiveness, or other business goal. Involving employees in goal-setting also eliminates the potential for the resentment that can arise when goals are imposed.
Reevaluate goals frequently
At a minimum, do this halfway through the year to insure that goals still make sense and that employees are on track.
Make goals specific and measurable
Don’t set goals such as “Do a better job,” because a general goal does not instruct an employee in what steps to take. An example of a constructive goal is “Increase response time to customer calls by 30%” or “Cut customer complaints by half.”
Goals don’t have to be tied to sales
Don’t automatically assume that bonuses should be tied to increased sales or even profitability. For example, it may be most important in a given year for your business to cut costs or raise visibility. Tie bonuses into that critical goal rather than one that is traditional.
Make sure employees goals are attainable
Many people have a tendency to set goals too high. Unattainable goals lead to employee frustration and lack of motivation and it is your job to make sure that employee goals are realistic.
Don’t set different goals for employees the same responsibilities. Not only will this likely breed resentment, but it can put you in legal hot water in terms of charges of discrimination.
Watch your timing
It’s common for businesses to set annual employee goals at the beginning of the year. Others may want to do it before a busy season, or at an annual company meeting. Be careful to set employee goals and conduct evaluations on a calendar year, not on employee anniversaries. This way, it will be easier for you to compare performance between people with similar jobs.
You want your employees to work against your competitors, not each other. Avoid things like contests as part of your goal setting. Instead, have your employees strive to meet a specified target within a specified period, and reward those who meet it. By doing this, you provide all of your employees with incentive to share information and help each other.
Set goals that tie employees into the success of your company
You might want to base financial incentives on the overall goals of your company. This can be used to encourage teamwork, and for everyone in the company to know that they are involved in your growth and continued prosperity. For example, Levi Strauss has set financial goals for the company for the year 2001; if the company attains that goal, it will be possible for each employee to get a bonus equivalent to their entire 1996 salary!!!
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