Learning goals are development opportunities related to new processes or roles that an employee might not have engaged in before. For example, an employee’s learning goals could be adapting to a new type of software, managing a team for the first time, or learning about a foreign culture before an international partnership deal.

Performance goals, meanwhile, are directly related to the way an employee does their job – such as increasing sales by 10% year over year or developing and publishing 30 pieces of content for the company blog this quarter.

“Performance review goals are important because an employee might not know what they should be aiming for in the first place,” said James Lewin, head of e-commerce and marketing at Bring Me Drink. “This might mean your idea of successful numbers and their idea of successful numbers aren’t the same. With the goals in place and agreed upon, they’ll have something to work towards and push themselves.”

Key takeaway: Learning goals focus on career development and skill-based education, while performance goals reflect an employee’s success in their current role.

Why should you develop employee goals?

There are several reasons why setting goals is important to your employees as well as your business. Here are some of the main reasons to set clear, actionable goals for your employees to follow.

Improving performance evaluations

Employee goals set targets for your staff to aspire to. They can serve to measure and improve job performance or motivate employees to pursue personal and career development opportunities.

“If you don’t have a clear way to assess a person’s performance … you disadvantage both the employee and the organization,” said Caroline Adams Miller, a goal-setting expert in the University of Pennsylvania’s Wharton Business School executive education program and co-author of Creating Your Best Life (Sterling Publishing, 2009).

Aligning individual and company objectives

Aligning your employee’s individual goals with larger company objectives is an effective way to get buy-in from your staff on your business’s mission. Without aligned goals, employees might get tunnel vision, narrowing the scope of their focus to simply completing their day-to-day tasks without feeling like part of the operations of the larger business.

“By looking at both employee goals and the business’s goals too, you’ll be able to align both so that everyone is pulling in the same direction of company success,” Lewin said. “So, for example, retaining clients will keep recurring income coming in. Similarly, the more sales that are made, the better the business’s bottom line.”

Boosting employee morale

When employees achieve their goals, they are likely to gain a sense of accomplishment. You can increase this feeling by offering small rewards to employees who complete their individual or team goals. For example, some companies might offer a quarterly financial incentive to teams that hit their targets. This not only boosts productivity, but also improves morale by giving employees a direct interest in meeting their goals.

Identifying career advancement opportunities

If you’re looking to promote employees to leadership positions, their progress toward previous development goals can serve as a useful insight. Consider the nature of these goals and whether an employee achieved them. For example, if an employee leads a team project and presentation successfully, they might be good management material. These goals should be viewed in the larger context of an employee’s skill set before promotion, of course, but they are an additional factor employers can consider to improve their decision-making.

“A development goal is slightly different, because this is more of a growth plan rather than a performance metric,” Lewin said. “Development goals can help to upskill employees, see them rise through the hierarchy of the company and make a name for themselves.”

Key takeaway: Employee goals can serve to improve individual skill sets, boost productivity, increase morale and align individual goals with the larger company mission.

What are the different approaches to employee goal setting?

There are several ways to approach the goal-setting process so that the objectives you identify are concrete, attainable and relevant to your larger mission. Here are a few approaches you might consider implementing in your development of employee goals.

SMART goals

A common method of developing goals is the SMART approach:

• Specific
• Measurable
• Actionable
• Relevant
• Time-bound

The SMART goal-setting method ensures goals are not vague, subjective ideas like “improve sales.” Instead, a SMART goal would be something like “increase sales 10% through e-commerce channels by the end of Q3.”

HEART goals

While the SMART approach to goal setting is commonplace, Scott Holman, president of career development company Stop Clowning Around, said HEART goal setting takes a different approach that some employers might find more effective:

• Habit-forming
• Emotional
• Actionable
• Realistic
• Time-bound

This variation of goal-setting focuses more on the personal interests of the individual pursuing the goal, ensuring there is buy-in beyond simply doing their job, Holman said. “Organizational goals are not linked to the emotional personal goals that actually motivate a human to habit-change and [achieve goals].”

For example, a HEART goal could be “I will write down my daily tasks every morning so I can save time and operate more efficiently, thereby reducing stress and improving my overall productivity.” Another example is “follow up with every sales prospect within one week for the next quarter to increase conversions and my commission.”

Key takeaway: There are multiple approaches to employee goal development. Which you choose depends on the circumstances of your business and what methods your employees respond to.

How to track and measure employee goals

Perhaps the most important element of setting employee goals is knowing how to measure them and track performance against them. The measurability of a goal is determined in the development of it, which is why making goals specific, clear, attainable and pegged to a quantifiable value is so important. Even somewhat abstract goals, such as “develop and deliver a presentation to the wider team on a current project,” can be measured. How many days did the presentation take to develop? How many times did an employee need to practice delivering the presentation?

“In the workplace, a measurement tool would be how many times you have to practice a speech in order to be confident delivering it on stage, or how many accounts you can settle a day when you are paying bills,” Miller said. “If you haven’t done the goal before and it is a learning goal, you are learning which metrics are most effective by flattening your learning curve by studying people who have accomplished those goals before, being mentored by someone, or reading a book about a role model.”

Tracking performance against goals is also incumbent upon the employer or manager who helped employees set them. This is partly related to the measurability of the goal set in the first place. “Improve sales” is not a measurable goal, and what constitutes “improvement” might be different in the mind of a manager and an employee.

However, “increase sales by 10% on e-commerce platforms by the end of Q3” is a clear, measurable goal that can be reviewed beyond a simple pass/fail designation. If an employee failed to meet the goal but increased sales by 8% in the allotted timeframe, a clear improvement can still be measured. Similarly, if an employee exceeds the goal and increased sales by 15%, it is evident they surpassed the goal significantly. Measuring goals this way not only improves how you recognize top performers, but can also help you refine future goals with a more realistic key performance indicator.

According to Diane Gayeski, professor of strategic communications at Ithaca College, some common criteria for measuring workplace goals are “sales figures, scrap and production rates, customer satisfaction ratings, number of calls or cases processed, development of new business or products, reduction in expenses, [and] creation and execution of new strategies or platforms.”

These measurable goals can be used as key metrics to track employee performance on an ongoing basis. Performance reviews, Gayeski added, should happen consistently throughout the year.

“Ideally, performance reviews should be ongoing, not just once a year,” she said. “There should be mechanisms to offer ongoing feedback and celebrations and rewards. Employees need to understand what makes worthy performance; it’s not enough just to show up on time and put in your hours. They need to feel that their supervisor’s assessment of them is fair and data-based, and not based on how much the person ‘likes’ them.”

Key takeaway: All employee goals should be tied to quantifiable measurements and regularly assessed in an ongoing performance review between employee and manager.