Goal setting can affect employee performance in many positive ways if the goals are both relevant to the company and realistic and achievable by the employee. Employers must give employees a clear direction when it comes to setting goals so that the objectives of top management are being met. If employers guide employees in setting goals that really matter to the company, the employee is often more empowered knowing his or her job is actually important to the organization's success. The results of such empowerment on employee performance are often an increased motivation to do the job and an increased sense of loyalty to the company.
Although pay raises and/or promotions are goal setting incentives that should be awarded when warranted, increased motivation and increased loyalty can also result from the positive attitude employers give employees in the goal planning and goal achievement processes. Studies show that employees often exceed performance expectations. This is demonstrated in employees achieving higher than expected sales quotas, especially when they feel they can trust their employer to be fair and appreciative of their work efforts.
Remember that a goal is a clear written description of a specific action to be completed by a set date. Goal setting done in writing is extremely important as then the goal becomes a decisive plan for achievement rather than just a notion. Progress on goal achievement should be reviewed at regular intervals, especially in long-term goal setting situations to keep both the employee and the employer on track and up to date.
Accurate communication is crucial in setting goals to ensure the goal is interpreted and understood to mean the same thing to both the employer and the employee. The use of verbs such as write, complete, file, and prepare, helps in establishing a clear goal. Successful goal planning between the employer and the employee usually leads to successful goal achievement. Workers guided in achieving reasonable goals with reasonable incentives for their achievements are likely to stay with the organization longer and tend to refer similarly talented and motivated workers to the company. Goal setting can even affect poor performers in a positive way when managers coach these employees to help them to achieve set objectives.