How to set employee performance goals: Tips and examples

Remote work, flexible hours, and cutting-edge technology are just a few of the elements that have redefined today’s workplace. But despite these seismic shifts in where and how we work, one thing remains constant: the importance of employee performance goals.

Not only can employee performance goals help maximize the potential of your team, but they can also benefit your business as a whole. Goal setting for employees may also lead to better collaboration, increased performance, and stronger engagement.1

Not sure how to set employee goals? Whether you’re gearing up to hire your first employee or looking to reinvent your business’s goal-setting strategies for existing hires, find helpful tips and example frameworks in this guide.

What are performance goals?

Set by employers to evaluate performance, employee performance goals are specific objectives used to measure an employee's efforts and achievements.1

Depending on an employee’s individual aspirations (e.g., promotion, raise, etc.), performance goals can help bridge the gap between where an employee is compared to where they want to be, while also boosting their overall dedication to your company. Here are some categories where performance goals can be relevant:

  • Job performance and role
  • Skills development
  • Contributions to company growth

Why is employee goal-setting important?

By setting clear and attainable employee performance goals, organizations can enhance motivation, focus, and productivity among their teams. Performance goals can also provide a basis for feedback and recognition, driving employee retention and fostering a culture of continuous improvement.

In fact, aligning employee goals with both organizational and employee needs can lead to a significant increase in performance, up to 22%.1 Having the right goals in place can also help boost the percentage of a business’s high performers from 44% to 60%.1

How to set performance goals

Ready to get started? Read on for strategies for setting goals with your employees.

  1. Align employee and company objectives using cascading goals

    A business is only as strong as its team. So when employees understand how their efforts contribute to an organization's success, they may become more motivated and engaged to drive real, measurable growth.1

    That’s where cascading goals come in. This goal-setting approach aligns individual and team-level performance goals with the broader strategic goals of an organization. For example, if a business’s main objective is to increase sales, a marketing associate’s performance goal may be to create weekly email campaigns to drive organic engagement.

    By providing employees with a clear sense of direction and purpose, they see first-hand how their efforts can contribute to the success of their team and organization.

  2. Collaborate with employees

    When employees are involved in setting their goals, they are more committed to achieving them. This increased commitment can translate into better dedication and performance.

    Moreover, employees possess valuable insights into their roles, capabilities, and challenges — so by collaborating with them, employers can better align their company-wide objectives with employees’ aspirations for professional growth.

  3. Establish performance reviews

    One of the best ways to track employee performance goals is through regular performance reviews.1 They can help foster accountability and serve as a measurement tool to track progress and drive improvement.

    The result? Employees can communicate their challenges and ask for support, while employers can offer guidance and assistance to help employees succeed in their roles.

Employee performance goal examples

Before creating employee performance goals for your team, uses these examples as a guide:

  • Project management goals: Successfully lead and deliver three projects on time and within budget in the next quarter.
  • Professional development goals: Obtain a project management certification within the next six months to be eligible for a senior promotion.
  • Collaboration goals: Implement a project management system by end of year to improve cross-functional collaboration and communication.
  • Communication goals: Improve email response time to within 24 hours for all incoming client inquiries.
  • Sales and revenue goals: Increase sales revenue by 15% in the next quarter by identifying new business opportunities.
  • Quality goals: Implement a customer feedback system to identify areas for improvement in product quality.
  • Innovation goals: Contribute two unique ideas to improve existing products or processes every quarter.

Keep in mind that this is just a short list of performance goal examples. To maximize the potential of your team, employee performance goals should be tailored to the specific needs and targets of each employee and your organization.

Set SMART goals

Need some inspiration for creating employee performance goals? Try the SMART method. Designed to set specific, measurable goals, this popular framework can help guide employees and employers when narrowing down their objectives.2

SMART is an acronym that stands for:

  • Specific: Goals should be clear, well-defined, and answer the "what," "who," and "why" of the objective.
  • Measurable: Goals should be quantifiable, allowing progress to be tracked and measured with established, concrete metrics.
  • Achievable: Goals should be challenging yet attainable. They should stretch employees to perform at their best while considering available resources and capabilities.
  • Relevant: Goals should be aligned with the overall objectives of the individual, team, department, and organization.
  • Time-bound: Goals should have a specific timeframe or deadline.

Examples of SMART goals for employees

Here’s an example scenario of how to write performance goals using the SMART method: Let’s refer to the marketing associate’s goal of creating weekly email campaigns.

By following the SMART method, the employee would set tighter parameters for their goal. It may look something like this:

  • Specific: Increase customer acquisition by 10% by creating one email campaign per week for 12 total weeks.
  • Measurable: The goal is quantifiable, with a specific metric (e.g., create an email once per week over 12 weeks to boost customer acquisition) that can be measured to track progress.
  • Attainable: While challenging, the goal is realistic and achievable.
  • Relevant: The goal aligns with the organization's objective of increasing sales.
  • Time-bound: The goal has a set time frame for completion.

Looking for more employee best practices? Check out our guide to hiring freelancers for your business and retention strategies to support your employees.

Was this content helpful?

Sign Up for the PayPal Bootcamp

In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.


We use cookies to improve your experience on our site. May we use marketing cookies to show you personalized ads? Manage all cookies