If you want to be a successful leader, you have you be able to set goals for your employees. You read that right. That annoying once a year exercise that someone in HR makes everyone do, is actually one of the most important ingredients of leadership success. A leader’s ability to motivate, engage and retain employees, as well as hit all of your deliverables are dependent on being able to set proper goals for staff. Despite this being critical, most leaders neglect this exercise as not important. Then at the end of the year they are wondering why deliverables have not been hit and why their top performer wants to quit. So, how exactly do you go about setting meaningful goals for your employees?

Align goals to the company objectives

In order to set effective goals, the first thing leaders should do, is take a step back and look at the big picture. If we are honest, most annual goals involve employees and leaders copy and pasting job descriptions into the HR system or listing day business as usual activities. So, let’s be clear. Business as usual activities are NOT employee goals. An employee’s day to day deliverables, are just that and should be expected to be delivered as standard. Goals should be things that are supposed to be completed in addition to a person’s standard daily activities.

By linking goals to the strategic objectives of the company a leader does two things. First, they boost employee engagement, because an employee feels they are working for a larger purpose and not just doing a job. Secondly, it boosts overall business performance as employees are focused on valuable and impactful activities as opposed to day to day busy work.

Get employees to suggest their own goals

Ownership is an important aspect of goal setting. There is a big difference between a leader telling an employee what their goals are and an employee suggesting goals that could be achieved. An employee is much more likely to work hard on delivering goals that they suggest, than being told what is expected of them. Ask the employee what they would need to do in order to perform their job better. The answers are often surprising. Salespeople will volunteer to make more sales calls; operational people will ask to streamline processes. A little bit of ownership goes a long way.

Set SMART goals

A well-established way to set goals is to make them SMART. This stands for specific, measurable, achievable, relevant, and time-based. If an employee is asked to make more sales calls, this is not a SMART goal as it is too vague. Let’s assume the person made 50 sales calls a day last year. The goal for this year needs to be specific, so define what more means. This year the employee will make 60 sales calls a day. This seems obvious, but lack of defining it will cause issues at year end. 51 sales calls a day is still more but the leader may have been expecting 100 a day. This can be measured by the activity being registered on the CRM system. The goal is achievable as it is only asking for a 20% increase not 100% more. It is relevant because it ties into the overall aim of increasing revenue for the company. It can be made time-specific by defining when this will be expected from. I cannot emphasize enough the “achievable” part of this process. If the employee does not believe they are achievable, then they are not even going to try.

Reward employees

There are two easy ways to lose employees as a result of the goal setting process. The first is to set unachievable goals. If they cannot be achieved why would the employee stay at the company as they know they are going to fail. The second way to lose an employee is to not reward them for achieving their targets. Imagine you are the salesperson in the example above. You increase your level of activity by 20% and you make more sales, increasing the revenue brought into the company. How is that employee going to respond if they are not rewarded for that achievement? What is the point of them doing more if they do not get anything for it?

Finally, its important to remember the message it sends to other employees. If they see a colleague work a lot harder and get reward and recognition for it, they are going to want to follow suit. There is a reason for them to work harder and achieve more. But if they see that there is no point to working harder, why would they bother to put in the extra effort?