You can be on Entrepreneur’s cover!

Set Goals For Your Employees Goal setting is an important part of your sales team's appraisal and bonus program. Follow these tips for establishing effective goals.

entrepreneur daily

Setting goals with your employees is an essential element ofeffective human resources management.

There are a variety of reasons to set employee goals. Goals can:focus employees on the purpose of your business; enhance yourchances of success by applying your employees efforts to yourcompany's long-and short-term success; and motivate employees.Employee goal-setting is also an important part of an employeeappraisal or bonus program because without goals, achievement isnot easily measured.

To be effective, employee goals must be clear andunderstandable. Each goal must be concrete, attainable, andcritical to the growth of your business. The tips below will helpyou set good goals:

Set goals with employees

Employees are often the best source for information about whatjob-specific goals will contribute to overall increasedproductivity, responsiveness, or other business goal. Involvingemployees in goal-setting also eliminates the potential for theresentment that can arise when goals are imposed.

Reevaluate goals frequently

At a minimum, do this halfway through the year to insure thatgoals still make sense and that employees are on track.

Make goals specific and measurable

Don't set goals such as "Do a better job," becausea general goal does not instruct an employee in what steps to take.An example of a constructive goal is "Increase response timeto customer calls by 30%" or "Cut customer complaints byhalf."

Goals don't have to be tied to sales

Don't automatically assume that bonuses should be tied toincreased sales or even profitability. For example, it may be mostimportant in a given year for your business to cut costs or raisevisibility. Tie bonuses into that critical goal rather than onethat is traditional.

Make sure employees goals are attainable

Many people have a tendency to set goals too high. Unattainablegoals lead to employee frustration and lack of motivation and it isyour job to make sure that employee goals are realistic.

Be consistent

Don't set different goals for employees the sameresponsibilities. Not only will this likely breed resentment, butit can put you in legal hot water in terms of charges ofdiscrimination.

Watch your timing

It's common for businesses to set annual employee goals atthe beginning of the year. Others may want to do it before a busyseason, or at an annual company meeting. Be careful to set employeegoals and conduct evaluations on a calendar year, not on employeeanniversaries. This way, it will be easier for you to compareperformance between people with similar jobs.

Avoid rivalry

You want your employees to work against your competitors, noteach other. Avoid things like contests as part of your goalsetting. Instead, have your employees strive to meet a specifiedtarget within a specified period, and reward those who meet it. Bydoing this, you provide all of your employees with incentive toshare information and help each other.

Set goals that tie employees into the success of yourcompany

You might want to base financial incentives on the overall goalsof your company. This can be used to encourage teamwork, and foreveryone in the company to know that they are involved in yourgrowth and continued prosperity. For example, Levi Strauss has setfinancial goals for the company for the year 2001; if the companyattains that goal, it will be possible for each employee to get abonus equivalent to their entire 1996 salary!!!

The viewsand opinions contained herein are not necessarily those of AmericanExpress and are intended as a reference and for informationalpurposes only. Please contact your attorney, accountant or otherbusiness professional for advice specific to yourbusiness.

Copyright © 2002 American Express Company. All RightsReserved.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

This Dad Started a Side Hustle to Save for His Daughter's College Fund — Then It Earned $1 Million and Caught Apple's Attention

In 2015, Greg Kerr, now owner of Alchemy Merch, was working as musician when he noticed a lucrative opportunity.

Business News

I Designed My Dream Home For Free With an AI Architect — Here's How It Works

The AI architect, Vitruvius, created three designs in minutes, complete with floor plans and pictures of the inside and outside of the house.

Marketing

Save Big and Get This Pro Collage App for $39.99

Edit, adjust, and create collages in seconds.

Business News

This Fan-Favorite Masters 2024 Item Is Still $1.50 as Tournament Menu Appears Unscathed by Inflation

The pimento cheese sandwich is a tradition almost as big as the tournament itself.

Business Solutions

Handle In-House Projects More Efficiently with MS Project Pro — Just $24 Through April 16

It's designed to help teams stay on task with features like management templates, timesheets, generators, and more.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.