What are performance objectives? Simply put, they state the concrete results that employees aim to achieve within a specific time frame. Because they keep people moving toward a goal, they’re a cornerstone of performance management.
Importantly, performance objectives differ from personal development goals. They are tangible outcomes achieved for the organization. Often called key performance indicators, they include specific accomplishments that together help meet team goals. In contrast, developmental goals include personal improvements that will help them achieve the desired outcomes.
Table of Contents
1. The Purpose of Performance Objectives
2. Types of Performance Objectives
3. How to Set Performance Objectives
4. Tracking Performance Objectives
The Purpose of Performance Objectives
Why are performance objectives important?
Having good performance objectives ensures people are focusing on the right priorities. They align with team and organizational goals to keep individuals on track. “Well-designed performance goals can help your team align their work activities with the company or department’s overall strategy,” writes Forbes.
Plus, having performance objectives boosts motivation, engagement, and job satisfaction. Employees will have more enthusiasm for their work when tackling a specific challenge. They also feel more supported.
“Of companies who have effective performance management systems, 91% say that employees’ goals are linked to business priorities,” writes McKinsey. “The explanation is simple: employees will be more effective if they can see how their individual goals fit into the big picture.”
Not setting performance objectives can bring serious consequences. Employees will feel confused about where they should focus, and teams will fall short of their goals. They will struggle to stay focused and engaged. Though they want to succeed, they’ll lose sight of their goals or the motivation to achieve them. Introducing them will improve business outcomes by providing much-needed direction.
Types of Performance Objectives
As Forbes discusses, performance objectives can fall into various different categories, such as these:
- Revenue goals
- Sales goals
- Conversion rate goals
- Traffic goals
- Social media goals
- Email marketing goals
- Product development goals
- Customer satisfaction goals
- User growth goals
To set performance objectives, an employee can choose specific metrics to track in one of these areas. For example, conversion rate, site traffic, and customer attrition are several metrics you can build performance objectives around. A social media specialist may aim to boost site traffic by a certain percentage this month, for example.
A product development specialist might aim to redesign a product in a way that solves two specific problems.
How to Set Performance Objectives
Managers should work with each employee to set the right performance objectives. Let’s walk through what this process entails. Then, we’ll look at examples of good and bad ones.
Set SMART Goals
SMART performance objectives are specific, measurable, achievable, relevant, and time-bound. Follow these steps to set SMART performance objectives:
- Choose two or three areas in which to improve. That way, you won’t feel overwhelmed. For example, a PR specialist may want to increase awareness of a company’s social responsibility practices. “Look at strengths, weaknesses, opportunities and threats” when deciding on goals, suggests senior consultant Jon Desenberg of the Performance Institute in Arlington, Virginia.
- Think of a meaningful outcome you want to achieve in each of these areas. Choose something that will further the team’s success in a tangible way.
- Make it measurable, quantifying the outcome you aim to achieve. For example, the PR specialist may aim to increase awareness of corporate giving programs by 75%. (This can be measured via opinion surveys.) Further, ensure you’re measuring actual results, not just the work put in. In other words, don’t measure calls made or emails sent, says the Society for Human Resource Management (SHRM). Instead, measure the actual response you get.
- Ensure your goal is achievable. Choose something that pushes you to aim higher, but not unreasonably high.
- Make sure your goal is relevant to your team and organization’s mission. Also make sure it aligns with your personal goals.
- Decide on a time frame for achieving your goal. Set a target date that feels manageable. The PR specialist may aim to accomplish their goal by the next quarter, for instance.
- Review goals periodically. As organizational needs change, adapt your goals.
More on Smart Goals
Traditionally, employees often focused on setting annual goals. And long-term goals remain valuable. But setting monthly or quarterly performance objectives has two important benefits. First, it boosts momentum because employees can achieve these goals in the foreseeable future.
This gives them a long enough time frame to achieve something meaningful but short enough to build anticipation. Second, it allows for agile goal-setting in response to fast-paced changes in today’s business environment.
Equipped with SMART goals, employees will be prepared for success. Now, let’s look at a complementary aspect of goal-setting.
Establish Collaborative Goals
Gartner has found that just 15% of employees’ goals involve teams, and only 9% plan goals with peers. “Individual goal setting overlooks team-based work. Work today is more team-based, and goals should reflect that,” they stress.
“Have individuals share goals with their team and ensure that everyone understands how their goals relate—and that they are jointly accountable for achieving the results outlined in their business strategy.”
In other words, set performance objectives that team members can work toward together. This will boost accountability, notes Forbes. Each person can be responsible for certain duties leading to the achievement of the goal. This means their individual SMART goals should all align, supporting one larger team goal.
Managers should coordinate collaborative goal-setting, mapping out how employees’ performance objectives relate.
Examples of Measurable Performance Objectives
Here are some measurable performance objectives that apply to an array of roles.
- Salesperson: Acquire 20 new customers. Guide 50 leads to the decision-making stage of the sales funnel.
- Marketing staff member: Carry out 3 successful social media campaigns for 3 different products this quarter, boosting website traffic by 10%. Acquire 100 new leads.
- Accountant: Conduct an internal audit of the company’s financial statements. Prepare profit and loss (P&L) statements for the month. Create a report showing P&L over the past quarter.
- HR manager: Carry out 2 group sensitivity training. Conduct 4 skill-share workshops for managers.
- IT specialist: Achieve a 95% success rate on a phishing test. Achieve a 99.99% server uptime rate.
- Customer service representative: Resolve at least 95% of customer concerns fully (measured by satisfaction rate).
Performance objectives matter in the nonprofit world as well as business. For a development coordinator, procuring two grants within the quarter would be an example of a performance objective.
Examples of Bad Performance Objectives
Bad performance objectives can fall into a few categories:
- Being unreasonable
- Being too easy
- Not being specific enough
- Not relating to results
For example, “Get better at customer service” is not a real performance objective. Why? It doesn’t state a specific goal. Neither is “Attend every staff meeting” because it doesn’t pertain to results. Likewise, “Email 500 people” doesn’t relate to outcomes.
Further, “Bring in 300 new leads this month” is a bad performance objective for someone who brings in 25 leads. Having unreasonable expectations sets people up to feel like they’ve failed—even if they actually increase their performance. In turn, this will decrease morale.
But “Bring in 28 new leads” may be too low for a marketing professional who is growing by leaps and bounds. Aiming for 35 new leads may feel more reasonable.
Tracking Performance Objectives
What roadblocks might you face in tracking performance objectives? Accurately measuring results can sometimes prove tricky. Similarly, employees may lose sight of their progress on a daily basis, which can decrease morale.
What’s the solution? Use performance management software in conjunction with performance objectives. Good software will allow you to set key performance indicators (KPIs) and track progress toward them. These tools will help employees stay on track to meet their goals. Every day, they can refer to their dashboard to see tasks and priorities.
Managers can also refer to this dashboard to assess employees’ progress.
Good software will even break down tasks into individual steps, helping people understand exactly what to do. This eliminates any confusion, increasing momentum toward goals.
Additionally, instant feedback will help managers keep employees apprised of their progress. Plus, it lets you share pointers for how to improve. Managers should also refer to performance objectives during each one-on-one session. This will keep them front of mind and provide a space for addressing any questions.
With strong performance objectives, managers and employees will increase their effectiveness. They’ll achieve more together because they’ll be working in a focused and self-directed way. As a result, your whole team will achieve its overarching goals and be prepared to set even more ambitious ones!
Want to learn more about how performance management software will improve your goal achievement? Demo our product!