The Talent500 Blog

What Are Performance Goals and Why You Need Them

Every company expects specific things from employees. A few indicators are used to assess the performance of each employee in fulfilling those expectations. If an employee is able to match up to the performance goals, they can maximize their potential and value in the company. Delve deeper to understand the concept and importance of employee performance goals. 

What Are Performance Goals?

Performance goals are nothing but short-term targets for employees. Defining these goals ensures that employees understand what is expected from them. Therefore, performance goals give employees a sense of direction in the company. Your ability to fulfil performance goals will have a huge impact on your promotions, appraisals, dismissals, and more. 

Who Sets Employee Performance Goals?

The employer, supervisor, manager, or HR department of a company usually sets performance goals. The goals will differ according to the objectives and performance standards of every company. Usually, performance goals are set after considering the intricacies of a job role to keep employees motivated. 

How Are Performance Goals Different from Development Goals?

Performance goals are something employees strive to achieve. These goals are according to the priorities of the specific role or organization. Performance goals can help improve the duties and productivity of an employee. They ensure that an employee’s achievements align with the overall goals of the company. 

Development goals are designed to promote the professional development of an employee. These goals are focused on areas that will drive advancement and growth in a professional’s career. Development goals encourage improved performance through learning and personal development. 

A major difference between performance and development goals is who sets them. Development goals are usually set by employees themselves with support from management. Employees usually depend on the organization to fulfill their professional development goals through financial sponsorship, skill-based training, and more. 

How to Set Performance Goals

Setting performance goals requires the following:

Review Company Objectives

The overall goals of the company are an important consideration while designing performance goals for each employee. The effectiveness of performance goals improves when employees are aware of what they need to contribute toward the company’s growth. 

Collect Insights from Employees

While developing performance goals, taking suggestions from employees is a great idea. Employees will be more motivated to achieve those goals if they have some say in setting them. The management should speak to each employee to determine their goals for a particular performance period. After finalizing the goals, the management should create an action plan for the achievement of those goals. 

Rely on the SMART Method

The SMART method is essential for setting up performance goals for each employee. All effective performance goals should have the following characteristics:

  • Specific: The management must clearly define what they want each employee to achieve rather than keeping it ambiguous. 
  • Measurable: The performance goals should be measurable so that it is easy to keep track of achievements.
  • Achievable: Set up performance goals that are realistic and can be achieved with dedication and available resources.
  • Relevant: All employee performance goals should ultimately be aligned with the overall objectives of the company.
  • Time-bound: It’s important to set up a specific timeline for achieving performance goals. 

Examples of Workplace Performance Goals

A few performance goals examples are as follows:

  • Data Entry Operator: A data entry operator can aim for a productivity goal of typing 100 words per minute in one month.
  • Call Center Executive: A call center executive can aim to handle 20 calls in an hour before the next performance review. 
  • Project Manager: A project manager can set an educational goal of completing their PMP certification within two years. 

The performance goals for employees examples focus on different types of objectives, ranging from productivity to educational goals. 

Importance of Setting Performance Goals

The importance of setting performance goals is as follows:

  • Motivating employees to remain productive
  • Making employees prioritize their work to attain different objectives
  • Enhancing the decision-making process by considering the goals as a guide. 
  • Promoting teamwork among the members of an organization
  • Evaluating the performance of an employee
  • Creating a roadmap for employees to move forward in the organization
  • Improving the time management skills of employees to meet project deadlines 


After creating performance goals for employees, it’s also important to keep track of them. Employees should be appreciated for successfully fulfilling their performance goals for a specific period. It only motivates them to do better and contributes toward the overall development of the company. 


  • What is the importance of clear performance goals?

Setting clear performance goals for employees will ensure that they feel a sense of connection with the organization. 

  • What is the purpose behind setting employee performance goals?

Performance goals encourage employees to perform better and contribute to the development of the company. 

  • What is a good performance goal?

A good performance goal is specific, measurable, achievable, relevant, and time-bound. 

Nemo Job

Nemo Job

Senior Writer at Talent500. Enjoys long walks on the beach, when the beach is closed. Fascinated by all things related to anime, comics, video games, music, and cinema. Cautiously optimistic. Relentlessly sarcastic.

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