1. Communicate what to focus on (and what to block out)
2. Track progress and motivate employees
3. Help employees define and meet their own career development milestones
4. Show how different initiatives are connected to one another
5. Give employees direction while supporting their autonomy
The two most popular frameworks for corporate goal setting are SMART goals and OKRs.
SMART goals are commonly associated with Peter Drucker’s Management By Objectives concepts. SMART goals encourage the employee to detail how it will be accomplished, balancing expectations with reality. A SMART goal must be written in a way that answers the following criteria:
Example of a non-SMART Goal: Close more business in Q1
Example of a SMART-style Goal: Close (actionable) $1M (measurable) by the end of Q1 (time-bound) by bringing in qualified leads through cold calls and demos (specific and relevant)
Objectives and Key Results (OKRs) are often organized at the company, team, and individual level and define larger objectives and several measurable results that track progress. OKRs divide the goal into the achievement and any measurable actions that support it.
Example OKR-style Goal: Close $1M in business by the end of Q1
Example Key Results:
For a little more context on OKRs, go here.
Regardless of the framework, companies have to decide whether they want goals to emphasize employee performance and development or operational alignment. Grouping goals together by team, department, or theme is a good idea, but enforcing strict alignment can be a heavy burden on companies because it can emphasize compliance over flexibility, performance, and innovation. With strict alignment, any missed task — because an employee is on leave, because one team is taking longer than they planned for, because of any unexpected change -- throws off the whole goal tree. This can lead to a lot of needless extra work around re-alignment, effectively punishing everyone for a small shift that could actually be dealt with on a much smaller level.
Directionally associating goals via tags, teams, etc., however, means using goals to motivate employees rather than enforcing alignment.