Why Is It Important to Set Goals?

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Performance goals are vital for success because these objectives become the foundation for individual goals and the plan for achievement. Setting goals gives a better indicator of how an individual measures their improvement and offers a sense of reward upon completion. In this article, you will find out what performance goals are, why goals are important and the steps for creating your own goals.

What are performance goals?

Performance goals are short-term milestones that individuals set for themselves or for their employees. It’s often difficult for employees to measure their success without input from employers. In these cases, employees might set their own metrics for consistent improvement. Employers also initiate these goal systems as a way to track performance within their teams. They set specific goals for employees to work toward. Some rewards include salary increases, bonuses and gift cards. 

Why is it important to set goals for your career?

Both long and short-term goals are important to success in career advancement. Setting goals not only improves performance but gives individuals something to look forward to. Every short-term goal met brings them closer to their long-term achievements. For example, an employee who makes $30,000 per year wants to make $60,000 within the next five years. It’s a clear goal with a meaningful reward. It might seem like a lofty objective, but they have the ability to achieve it by setting their own performance goals.

Tips for creating goals with the S.M.A.R.T. method

Here is a series of criteria you can use to create effective goals:

  • ‘S’ stands for Specific. Be clear and concise. 
  • ‘M’ stands for Measurable. Include details that are quantifiable and material.
  • ‘A’ stands for Attainable. Create goals that are tangible, realistic and reachable.
  • ‘R’ stands for Relevant. Keep the objectives applicable and compatible with duties and responsibilities.
  • ‘T’ stands for Time-bound. Deadlines or timeframes should be prompt and reasonable.

S.M.A.R.T. stands for specific, measurable, attainable, relevant and time-bound. When setting goals, it’s best to keep these S.M.A.R.T. method tips in mind so that your ideas and objectives can combine to create effective goals.

How to set performance goals

Here are some steps you can follow to achieve the best results when setting performance goals:

1. First, determine an area for improvement

Before setting a goal, individuals need an area to improve. You can review examples and analyze some of the many different areas available for improvement in business. For example, a factory manager might choose to improve efficiency upon hearing how much more efficient other company factories are. 

2. Second, determine a specific goal

Successful goals need a degree of specificity. In reference to the previous example, the manager decides to offer performance-based incentives to employees. They choose to give bi-weekly bonuses as long as they produce enough product for three additional trucks on each shipping day. 

3. Third, weigh the goal against S.M.A.R.T. criteria

For goals to reach their maximum effectiveness, they must comply with the standards set forth by S.M.A.R.T. goals. Continuing with the previous example, the manager determines her goal is specific because she honed in on an area worth improving. She determines her goal is also measurable and attainable as her goal requires enough product for three additional trucks, not far from the usual five trucks. The manager measures success every two weeks, meeting the time-bound requirement.

4. Fourth, implement the change

The final step requires the implementation of the new goals and objectives with staff. Even with the appropriate calculations and S.M.A.R.T. goals, there is no guarantee of success. In this stage, the manager monitors the progress of her goal. Wherever problems occur, she addresses them, ensuring the completion of the goal every two weeks. To aid her employees along the way, she offers smaller, weekly incentives to those with the highest performance.

Examples of common work performance goals

Here is a list of some of the most common categories of goals to increase work performance:

Customer satisfaction

Customer satisfaction is a common metric based on customer experience. Those in the customer service industry find this a preferred metric for monitoring performance.

Examples of customer satisfaction goals:

  • ‘Increase customer satisfaction rating my 15% during phase one of the new grocery delivery system’
  • ‘Offer all customers aid in packing item into their vehicles, increasing customer satisfaction rating by 5% within the first month’
  • ‘Provide better customer service on calls, increasing overall customer satisfaction rating by 65% within two years’

Cost reduction

Depending on where it occurs, cost reduction benefits both customers and businesses alike. Discovering methods of cutting costs always helps the bottom line.

Examples of cost reduction goals:

  • ‘Secure 5-10-year contracts with ore producers, significantly reducing unit costs of each shipment’
  • ‘Buyout a mid-tier clothing brand, claiming their warehouses and productions, reducing stocking costs by nearly 90% immediately’
  • ‘Request a facility audit, reducing utility costs by 20%’


Producing more goods and services to keep up with demand is paramount to a business’s success. Just like cost reduction, productivity directly impacts the bottom line.

Examples of productivity goals:

  • ‘Challenge production employees to producer 5% more units each hour, resulting in an estimated 35% increase in productivity by the end of the quarter’
  • ‘Increase article minimum from 10 per week to 15 per week to increase writer productivity’
  • ‘Add an additional break during the workday with a goal of 10% increased productivity for the quarter’


Increased efficiency leads to higher productivity. Creating goals within this category benefits others as well.

Examples of efficiency goals:

  • ‘Introduce new shipping measures to decrease product delivery times from an average of 5 days to 3 days by the end of May’
  • ‘Offer gift cards to data entry personnel who complete more sheets during a week than anyone else on their team, increasing efficiency by 25% each week’
  • ‘Eliminate a redundant step in the snack cake manufacturing process to get them packaged faster, increasing efficiency by 20%’


All businesses seek methods of increasing revenue. Not only does it impact the bottom line, but it also provides the means for better goal rewards. 

Examples of revenue goals:

  • ‘Rent out restaurant and other open spaces on hotel property for weddings, increasing revenue by 35% for the year’
  • ‘Combine products into packages, making 15% higher profits than normal for the quarter’
  • ‘Discontinue current theme park transaction system and replace with a new version for fewer errors, increasing ticket revenue by 10% within the first month’