8 Do’s & Don’ts of Performance Reviews and Goal Setting

Woman with glasses smiling in office

Most businesses wouldn’t be where they are today without setting goals or reviewing performance of the company and its employees. Goal-setting and performance reviews create a solid foundation for company growth and success. Performance reviews enhance employee engagement and, according to The Hay Group, companies with high engagement have 2.5 times more revenues compared to those with low levels of engagement. As strategies to improve employee engagement continue to keep HR and business leaders up at night it’s important to understand the factors that contribute to employee engagement. According to Forbes magazine, the five elements that drive engagement are:

  1. Meaningful work
  2. Hands-on management
  3. Positive work environment
  4. Growth opportunity
  5. Trust in leadership

A solid performance review process touches each one of the fore-mentioned elements. Employee success is made possible by reviewing progress often, integrating personal goals with company goals and providing employees insight into how their actions contribute to company success. Read on to explore the benefits of performance reviews and goal setting while also avoiding mistakes before they’re made.

1. DO think of performance reviews as a system that begins during onboarding

The onboarding process can be a very overwhelming and exciting time for both the employer and new hire. However, when onboarding functions become weighed down by tedious details and paperwork, the new hire may become disengaged. It’s important to set expectations and goals early on and begin tracking progress to get them on the right track. An automated onboarding process can simplify these tedious tasks and allow companies to engage employees from the beginning.

When employers are attentive to employees’ success, new hires will want to work hard and this ultimately results in increased engagement. Goals don’t have to be complicated. In fact, in the beginning, straightforward goals foster trust and communication. Goals that will help a new hire get on track early could include:

  • Quality of work
  • Quantity of work
  • Work habits
  • Attitude/cooperativeness
  • Job knowledge & skills

2. DON’T set goals that aren’t attainable

Goals are the backbone of every business. It’s important that employees are excited about meeting goals but it’s also vital that the goals set are SMART.

S: Specific. Goals should be defined answering “Who, what, when, where, why and how?” They should include dates, resources and/or dollar amounts you’ll need to accomplish them.

M: Measurable. Identify appropriate metrics for achieving your goals. Employees should be able to track progress and measure success.

A: Ambitious/Achievable. Goals should be within reach but stretching. It’s important not to assign too many goals or ones that aren’t attainable in the amount of time allotted to the goal.

R: Results-Based. Goals align with company strategy. Goals should relate to attaining something that is necessary, of value and that supports the company’s vision.

T: Time-Bound. Determine a date, timeframe or scheduled completion of the goal.

SMART goals can be carried out through an individual development plan, which is a communication tool to ensure employees know how they can achieve their goals, what resources the company can provide to them to help and aligning these goals with organizational expectations. Managers can reference this plan on a weekly or monthly basis to keep employees on track. HR professionals can reference this plan when it comes time for performance reviews to track employee status toward achieving the goals they agreed to. Goal setting is almost always attainable as long as steps are planned out wisely and a time frame that allows steps to be carried out is established. Even goals that seem out of reach will come within reach in time.

To read all 8 Do’s and Don’ts, download the whitepaper online.