How Goal-Setting Drives Employee Engagement and Retention

How Goal-Setting Drives Employee Engagement and Retention Insights and Strategies for Enabling Great Performance With Goals

What role do monthly, quarterly, or annual goals play in your work life?* Goals are a daily guide for setting 30% my priorities Goals are metrics to meet for quarterly 30% annual compensation/bonuses Goals periodically show me how 27% best to align with my organization Goals are the source of my 26% current to-do list Each day, employees around the world show up to work, presumably to achieve…something. Yet, according to the 昀椀ndings We set goals up once a from our 2022 State of Performance Enablement research report, goal- year and rarely look at 21% them again setting practices vary widely across companies, with varying degrees of success. In our survey, nearly one in three respondents said goals Goals do not play a relevant role in 16% are used as a metric for compensation at their companies, another third my work use them to set daily priorities, and more than a quarter consider goals their current to-do list. Twelve percent of employees told us that they I do not have formal or informal job 12% don’t set them at all. goals in my role But when performance is the entire point of a job and achievement is a *Respondents could select all that apply. critical part of growth and career-building, why aren’t more employers focused on the way that progress is measured? How Goal-Setting Drives Employee Engagement and Retention

Goals and performance management aren’t unrelated — in fact, they’re deeply interconnected. Goals are essential guideposts for aligning teams to a shared vision Some system for setting goals, outcomes, priorities — whatever and an important tool in helping employees understand how their you prefer to call them — is necessary for the objective evaluation e昀昀orts contribute to the success of the business. of performance. When promotion, compensation, and growth opportunities are informed by measures of progress against Yet, many companies keep goal-setting and tracking distinct from irrelevant goals that don’t accurately re昀氀ect an employee’s what they call “performance management,” if goals are regularly achievements, employees feel disengaged and unvalued. tracked at all. In fact, 21% of survey respondents said that their goals are set annually and never looked at again — and if the last few years Furthermore, the business loses a critical opportunity to identify have taught us anything, it’s that the needs and demands of growth and upskilling opportunities to enable better outcomes, a business can change overnight. as well as to truly understand and reward the e昀昀orts of its best performers. Goals provide important context for productive performance conversations. Without meaningful measures of an individual’s progress against intended outcomes, the evaluation of performance is subjective, inconsistent, and biased. How Goal-Setting Drives Employee Engagement and Retention

Rigid goals leave Do you feel trapped in out-of-date goals by the end of the quarter/year? employees feeling trapped. 12% Yes. My goals are always irrelevant by the end of the period. 36% Somewhat. Some goals do become less relevant over time. If goals are critical to understanding individual and overall business 25% No. My goals rarely need to change. performance, and achievement 27% No. My goals can be updated as needed to keep pace with change. and recognition are essential for employee engagement, then As business circumstances change and new priorities are introduced, employers should be alarmed that many employees are left tied to goals that no longer matter — making the traditional performance evaluation process even less useful, and providing an inaccurate assessment of the impact of an individual’s performance. Conversely, in a program that’s optimized for engagement, goals are 昀氀exible and employees have the ability to set their own goals against the company’s guiding objectives. In addition, employees are 48% of employees feel trapped empowered to update them when they’re no longer relevant. And by out-of-date or irrelevant when employees feel like their work directly impacts organizational outcomes, they tend to feel more satis昀椀ed with their work and goals by the end of companies. But goals can back昀椀re when they’re not 昀氀exible or a quarter or year. aligned with the work employees are actually focused on day-to-day. How Goal-Setting Drives Employee Engagement and Retention

People who reported feeling trapped in 28% 41% Are you looking to change companies? goals also said that they don’t like working at and How 昀氀exible are your job goals their companies and are less likely to think when situations change in your work? they’re working on the right things. What’s 55% more, employees who don’t feel empowered 50% Very 昀氀exible. Goal-setting is agile and responsive to change. to update their goals as priorities change Somewhat 昀氀exible. Goals are hard — but not are also more likely to say they’re actively impossible — to change. looking for work. 17% Not at all 昀氀exible. Goals are set in stone. 9% Planning to Not planning to change jobs change jobs 10% 25% 21% 4% 11% 12% 16% The good news is that the appetite for goal- setting is high, as is the demand for 昀氀exibility and autonomy in setting work priorities. Sixty How often are you empowered to create percent of employees who don’t have a way to or adjust your job goals? update goals told us they wanted this ability. But regardless of how goal-setting functions at Never As situations your organization today — whether goals are change passed down, from the bottom up, or some Annually Weekly combination thereof — it’s essential that you work to ensure your employees understand Bi-annually Monthly how their work contributes to the overall Other (please objectives of the company, and that their goals Quarterly specify) are relevant to and re昀氀ective of their work. How Goal-Setting Drives Employee Engagement and Retention

Goal-setting alone isn’t enough. Establishing a practice of goal-setting is an important step in creating strategic alignment and work priorities that facilitate performance. But to drive real impact, goal-setting must be accompanied by meaningful conversations between employees, managers, and teams on an ongoing basis. How could your 1:1 check-ins better 昀椀t your needs?* These conversations provide an opportunity to identify potential risks or challenges and address any blockers, as well as discuss More oriented around my career 33% more long-term career goals and plans for employee growth growth and development and development. More oriented around my goals 31% and milestones More collaborative with 30% Performance management should be a continuous my manager process that’s integrated into the 昀氀ow of work — so seamlessly that it simply becomes the way teams work Held more often 28% — versus the episodic, backward-looking model of performance management so many companies Held less often 15% continue to struggle with today. Other (please 7% specify) *Respondents could select all that apply. How Goal-Setting Drives Employee Engagement and Retention

Better conversations drive deeper engagement. While 1:1 conversations are a fairly common practice at many organizations, most fall short today. Overall, 60% of employees feel that their current model of check-in conversations isn’t totally working for them. Nearly one-third of employees want these meetings with managers to focus more on their goals and milestones; close to one third want them to be more oriented around growth and development; and about another third want more time to collaborate on projects. Of the 60% who are dissatis昀椀ed, 28% said they wish 1:1 conversations were held more often, while less than two in 10 expressed a desire for less Goal progress increases by an average frequent touchpoints. of 30% when performance programs An emphasis on employee growth and development, and the tools to include the use of conversations, document and support those plans, were a consistent theme among our feedback, and recognition. survey respondents. Not only do employees want more investment from their managers around career development opportunities, employers see a major boost in employee engagement when they equip employees with the tools they need to map and track those aspirations. According to an analysis of customer data, Betterworks found that goal progress increases by an average of 30% when performance programs include the use of conversations, feedback, and recognition. How Goal-Setting Drives Employee Engagement and Retention

Best Practices for E昀昀ective Performance Enablement Enabling great performance isn’t just about any one element — it’s a combination of proven practices that drives employee engagement and business impact. Enable agile, employee-driven Promote meaningful conversations short- and long-term goal-setting: and feedback: Employees want Overwhelmingly, employees told us they meaningful conversations that want more control over their own goals, incorporate work goals and priorities, adjusting them as priorities shift and career growth and development, and using them as part of their day-to-day 1:1 collaboration with their leaders on routines. Employees who have this ability strategic projects. All of these contribute are less likely to say they’re looking to to better performance, as well as deeper leave their current companies. employee engagement. Integrate goals into the 昀氀ow of work: Establish goals focused on work, Goal-setting should be a practice that as well as personal and professional integrates with the way your teams work development: HR, managers, and and the applications they use most employees need data that helps them often. To be e昀昀ective, goals should be make decisions proactively for the bene昀椀t visible to employees and easy to update of both the company and individual without extensive manual data entry. The employee performance and growth. best solutions are lightweight and allow employees to review and adjust their goals in 15 minutes or less a week. How Goal-Setting Drives Employee Engagement and Retention

Discover Betterworks Companies like Colgate-Palmolive, Intuit, Freddie Mac, and Udemy rely on Betterworks to enable great performance. Betterworks’ best-in-class HR talent management solutions are designed to drive exceptional performance by putting employee experience at the heart of how companies align, motivate, retain, and develop their people. Unlike legacy HR technology, Betterworks is a lightweight, enterprise-ready solution that integrates with the tools employees use every day. Want to learn more? Download the full report. betterworks.com © Copyright 2013-2022 Betterworks. All rights reserved. Various trademarks held by their respective owners.     