Discover the big disconnects in performance management today in the 2024 State of Performance Enablement report.

How Goals and Conversations Empower Employee Performance

By Michelle Gouldsberry
August 23, 2022
4 minute read

Why do your employees come to work everyday, whether it’s on a shop floor, a medical facility, or remotely in front of their computer?

Presumably, it’s to do more than just put in the hours and collect a paycheck. The majority hopefully like what they do and want to feel that their work is not only personally meaningful, but makes a difference to their organization and their customers and clients. They want to grow in their roles, develop new skills, and have purposeful and rewarding careers – or at least, feel good at the end of every day. And, of course, employees want to be recognized for doing well. All these factors promote engagement

How can any of this be achieved if there are no strategic goals to work toward or the goals no longer reflect the business’s current needs? Likewise, how can meaning, satisfaction, and achievement be realized if there is no way to measure those goals to tie them to performance and career development?

The short answer is, none of it can be accomplished. Yet, the Betterworks 2022 State of Enablement Performance global research report reveals that about one in five employees sets up goals and rarely looks at them again, while a whopping 48% feel trapped by out-of-date or irrelevant goals. When performance is the point of a job and achievement is a critical part of growth and career-building, why aren’t more employers focused on the way progress is measured? This is the fundamental question explored in our latest guide, How Goal-Setting Drives Employee Engagement and Retention.

Tying goal achievement to performance management

Many of us can probably cite in our sleep the famous quote attributed to management theorist Peter Drucker: “What gets measured gets improved.” 

Employers must be able to evaluate performance objectively and to measure the right things. A process for setting goals, outcomes, priorities — whatever an organization prefers to call it —  is at the crux of these efforts. Doing so enables employees to understand how their efforts “move the needle” for their employers and how their work aligns with the activities of peers – essentially, a shared vision. 

At a time when business disruption and the pace of change are faster than ever before, goals not only need to be established, but also updated as the organization’s needs shift. And ideally, employees should be empowered to do the updating flexibly as they see fit. Those who are on the front lines at work often understand best what adjustments need to be made to address the needs of the business.

Maintaining relevant goals also gives both employees and employers a window into skill-building and growth opportunities. For example, an employee may discover they need to learn how to build a data analytics dashboard in Python to help their department achieve its strategic goal of improving forecasting capability.      

When employers and employees can set and measure progress on relevant goals, they can more objectively measure performance and growth, as well as tie these into promotion and compensation. This ensures high performers are fairly rewarded for their efforts and that all employees have greater opportunity to contribute and advance.

What do goals have to do with retention? 

For an employee, there is no tangible difference between not having goals or having outdated goals. Both can make work equally useless and frustrating, and lead to disengagement. In fact, our research found that employees who feel trapped by their goals are less likely to think they’re working on the right things, don’t like working at their company, and are more likely to say they’re actively looking for work.

Among employees with agile goal-setting capability, 41% said they are not planning to change jobs, while 28% said they are planning to look for work elsewhere. Among employees with no goal-setting flexibility, 17% said they would seek new roles.

Related content: 5 Best Practices for Employee Retention

Goals and conversations: the sail and the wind

Think of goal-setting as the first step toward creating strategic alignment between the work of an employee and the goals of the organization. To use a sailing analogy, these are like the mainsail, the large and most important triangular sail that is attached to the main mast of a sailboat. But what gives the sailboat power is the wind pushing on the mainsail. And the wind that powers goal achievement is frequent conversations between managers and their direct reports.

Goal performance increases by 30% when performance management programs include conversations, feedback, and recognition.

Ongoing conversations help employees discuss challenges, stay on track, cover career goals, and plans for growth and development. Numerous studies have pointed to the impact of managers on employees’ decisions to stay or go. Yet, Gallup found that only 21% of U.S. employees strongly agree that they received meaningful feedback from their managers in the preceding week. 

More frequent and directed check-ins between managers and their reports will yield better employee performance. What do employees want more of? Our research shows that the top four “wants” are check-ins that focus more on career development and growth, along with goals and milestones, are more collaborative, and more frequent.

Goal performance increases by 30% when performance management programs include conversations, feedback, and recognition according to a Betterworks analysis of customer data. Such an approach is forward-looking and employee-centered, and is designed for today’s workforce, expectations and business environment — rather than occasional and backward-looking, as is the traditional performance management approach still in use by many organizations today.

Related content: OKR Review Meeting: Why You Need Frequent Conversations to Succeed

Flexible goal-setting and steady manager-employee conversations based on data are two essential components of an employee-first performance management solution that will yield higher retention, accomplishment, and satisfaction. To read the comprehensive findings on this topic, download the comprehensive guide, How Goal-Setting Drives Employee Engagement and Retention.