There is much debate these days as to whether annual goal setting and performance evaluation programs are effective or should be eliminated altogether. These programs can be highly effective and achieve great results – but they rarely do. As a result, many companies are considering scrapping their program. While this may seem like the easy solution, why not first look at why you aren’t getting the results you want. Ask yourself: Could you be the performance issue in the goal setting process?

Why Do Most Goal Setting Process Programs Fail?

Consider why most companies fail to reap the benefits of these programs. If you are a leader, you likely have a large part to play in this. While employees may take steps to set themselves up for success through the annual goal setting process, the actions of managers have a much larger impact on the success of this valuable process.
Many leaders don’t take the necessary steps to get the most from these programs, either due to lack of ability or understanding. This can result in decreased confidence, engagement and motivation with employees – and with the leaders themselves.

Do’s and Don’ts of a Goal Setting Process

There are some simple things you, as a leader, can do to reduce the negative impacts and reap the rewards of a well-run program. These 10 Do’s and Don’ts will help you get the most out of your annual goal setting program and your team

Do: Take the goal setting process seriously.

Don’t: Treat it as just ‘another HR exercise’.

Your attitude is likely to be mirrored by your team. Goal setting programs should enhance the productivity, alignment and success of an organization when used effectively. Approaching this in a positive manner to set your team up for a successful year will send the message that you and your team understand how your roles fit in the organization and are invested in the company’s success, as well as your own.

Do: understand the corporate and departmental strategy and ensure your team goals reflect these.

Don’t: Set your team goals in isolation.

Taking the time to ensure employees are all working toward common goals and on projects that support the overall organization’s strategy minimizes aggravating re-work, duplication of effort and makes the most of everyone’s time. It also demonstrates that you and your team understand and support the corporate strategy or direction. Ensure your own personal goals align with your team’s and your leader’s goals. Then, you can demonstrate the criticality of all pieces in meeting objectives.

It also helps to identify early any goals that are out of alignment and need to be adjusted.

Do: Be specific and ensure you identify and discuss potential roadblocks, dependencies and budget constraints so that there is a plan for all should these changes be encountered.

Don’t: Set vague goals or leave it up to the employees to identify potential issues.

You may have a broader lens of the interdependencies between departments, budget and corporate priorities. Highlighting these early in the goal setting process allows you to plan contingencies and allow for an environment where your team feels safe letting you know when issues do arise.

Do: Use the opportunity to match work to employees’ strengths, interests and development needs.

Don’t: Approach project work or special goals as a repeat of last year’s initiatives.

Ensure the distribution of work is evenly spread through your team. And keep in mind a balance of day-to-day tasks and special project work.

(On the subject of tasks, check out this post about the dangers of multitasking next)

Discussing interests, strengths and development needs through this process will result in increased engagement, passion and effort from your team. Not to mention, a sense of equity and respect through the team.

Do: Use it to set expectations and clarify desired outcomes

Don’t: Leave expectations open ended or unclear

This is an opportunity for leaders to clearly outline what they expect and what success looks like. This is also an ideal time to listen to input from your team and collaborate on an approach. You have hired smart, talented employees. Being flexible in your approach and working together to lay out project goals and getting buy-in on the expected result minimizes any chance of year-end surprises.

Do: Be flexible

Don’t: Rigidly adhere to goals if budgets, priorities, or corporate needs change.

An annual goal setting process is about aligning employees’ work to the goals and priorities of the company. If those change, your team members’ goals and priorities should also change. Being flexible when things change allows for both the organization and your team to succeed in spite of ambiguity.

Do: Use these goals to aid in performance and development discussions.

Don’t: Wait until the end of the year to address concerns.

Your employees’ annual goals are as much a tool for you as for them. Regardless of the employee’s level, referring to the goals throughout the year and providing timely and constructive feedback keeps your team focused and on target. This also aids in year-end conversations, whether someone has exceeded all expectations or is still in need of development.

Do: Use it as a reminder of the entire year’s performance

Don’t: Fall into the trap of basing assessments on the last few months of the year, which are easy to remember.

This is difficult for many leaders as recent project successes and hiccups are most vivid in our minds. Use the annual goals as one point to remind you of what was achieved throughout the year. At the same time, consider how projects evolve, hurdles are overcome, and developmental progress is made.

This is also a good time to look at how evenly distributed the work of the team was through the year, both in quantity and complexity. Many members of your team may have succeeded in all of their goals. But the number and complexity of them may be quite different.

Do: Evaluate what the employee achieved as well as how they achieved their goals.

Don’t: Focus only on the end result of goals without taking into consideration how the employee worked with other members of the team and organization in achieving goal success.

This is a common pitfall in many organizations. Too often, employees get rewards for results at the expense of the culture in the team or company. Leaving a wake of destruction should never be rewarded, regardless of what targets were accomplished. Rewarding the employees who demonstrate your organization’s values results in a much more cohesive and productive team. Ultimately, driving your organization further ahead.

Do: Evaluate the totality of employee performance

Don’t: Evaluate an employee’s entire year of performance-based solely on the goals that were created and achieved.

Front line employees bring great value to an organization by completing their day-to-day work with high quality and integrity. If one member of a team has completed ambitious goals but left the rest of the team to pick up the extra work, this is not a win for the team. There must be balance within the team with each member being recognized and rewarded for their contributions.

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Did you learn a lot about the goal setting process in this post?

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This post was first published in 2017 but it was updated in 2021 just for you.