How to Use Goal Setting to Boost Employee Productivity

How to Use Goal Setting to Boost Employee Productivity

Nov 24, 2021   8 Min Read
Use these tips to create a positive workplace atmosphere and boost employee productivity through meaningful goal setting.

Goal setting is an important part of running any successful business, whether you own an online ecommerce shop or a brick and mortar retail store. Everyone has their own idea of what it means to set a goal. But what is goal setting exactly and are you doing it right?

Simply put, goal setting is the process of developing an action plan that guides you towards the intentions you’ve set for yourself. It begins by identifying something you want to achieve and then defining the process and steps you’ll take to steer yourself towards completing it. This blog goes into nitty-gritty details of goal setting and suggests how to use this powerful performance method to make your employees committed, motivated, and overall—more productive. 

So, does goal setting really boost productivity?

Actually, there are numerous studies that indicate goal setting has a positive impact on productivity and performance. According to psychologists Gary Latham and Edwin Locke, goal setting can increase productivity by anywhere between 11 percent to 25 percent. And, in today’s remote-centric workforce, productivity is more important than ever.

What Is Workplace Productivity?

Workplace productivity, as you might imagine, refers to how much work is achieved in the work environment. Employee productivity can be calculated by dividing the total labor output by the total input. Output refers to the amount of money a company generates by providing its goods and services, and input refers to the amount of labor necessary to produce the output. 

For example, if Company XYZ made $500,000 in 2020 by utilizing 15,000 hours, then the company’s labor productivity would be 33.3. Of course, productivity isn’t just about direct labor, since there are other things that affect productivity such as technology, overhead costs, and efficiency. 

Goal setting can make a major difference to labor input and/or output. It can be a powerful motivator since it can help your employees visualize their goals and create effective roadmaps. When you train your team on proper goal setting techniques, you can maximize profit, improve your company culture, and boost overall morale. 

Why Goal Setting Sometimes Fails & How to Avoid This

Goal setting sounds simple enough, yet the main problem with goal setting is that it can be subjective from person to person or company to company. Goals sometimes fail and it can be difficult for companies to identify the reasons why. With that in mind, here are a few reasons why goal-setting sometimes goes down like a lead balloon: 

1. Ambiguous Goals

Do your employees have clear goals?

Vague goals are often the biggest reason why goal-setting fails. Ambiguous goals make it difficult to create cohesion in your team. Conversely, clear goals increase employee productivity, create connectedness, and increase job satisfaction. 

Create goals that are well-defined and understood through each and every department in your company. Whether you’re a public or private organization, you should be able to draw a clear parallel between goal-setting and productivity. One of the best ways to create uniformity is to provide clear, tried-and-tested examples of goals that work and the ones that don’t. 

2. Lack of SMART Goals

Do you set SMART goals?

Far too often managers ask their staff to set goals without setting the criteria for goal setting in the first place. One of the most popular goal setting systems is the SMART goals. SMART goals are Specific, Measurable, Attainable, Relevant, and Time-based. 

Most importantly, they help companies steer away from setting ambiguous goals. For example, let’s say your goal is to raise funding for your startup. Your SMART goal might look like this:

  • Specific: What exactly do you want to achieve? The more niche and narrow, the easier it will be to reach your goals. 

Example: Raise $50,000 to grow your business. 

  • Measurable: How will you measure whether you’re making progress towards your goal? What evidence proves you’re moving forward at all?

Example: Pitch three relevant investors each week. 

  • Attainable/Achievable: Overly ambitious goals are more likely to grow awry. Goals that lack preparation miss the mark in the vast majority of cases as well. 

For instance, if your goal was to find the right investor, you wouldn’t send a pitch without doing your due diligence and researching that particular investor first, right? Ask yourself: what can I do to make my goals more attainable? Am I prepared enough to achieve the goals I’ve set? 

Example: Use a startup business plan template to create a detailed business plan and build a pitch deck. 

  • Relevant: Each of your goals should align with larger goals. Also, each of your goals should be measured up to a broader objective. 

In this case, raising startup money will allow your business to grow. Without funding, you probably won’t be able to step up your game and push your goals forward. 

Indeed, goals evolve over time, but each goal you set should be tied to the previous one and have a meaningful purpose. To make your goals more relevant, think of the actions you’ll need to take to put your goal in a more favorable position. 

Example: Attend networking events that will help you put your company in front of potential investors. 

  • Time-based: Every goal should have a time frame. Set deadlines and prioritize tasks to motivate yourself to get closer to the finish line. Having time-bound goals makes it easier to keep complex and multi-stage projects on the right track. 

Example: Raise funding within six months. 

Once you’ve created a goal that meets the SMART goal criteria, take a moment to gather those details and record them. 

  • Final goal: I will raise $50,000 within six months to continue growing my company. I will measure my progress by how many pitches I make each week and meetings I set, and will make sure to have at least 3 meetings weekly. I will help increase the odds of landing investor meetings by creating a detailed startup business plan and pitch deck and attending networking events.

3. Poor Company-Wide Communication

Does your company clearly communicate company goals to employees?

Not communicating your company goals in a clear way is another reason why goal setting fails. If your employees don’t understand where the company is headed, it can be difficult for them to identify themselves with the company’s objectives. 

By sharing company goals with your staff, they’ll be able to pick goals that will help the company achieve their overarching goals as well. When company-wide goals aren’t cohesive, it can quickly result in lost time and reduced productivity. To combat this, hold weekly or bi-weekly department meetings and monthly or quarterly company-wide meetings.

Communicating company goals and objectives isn’t just good for productivity. Transparency decreases job-related stress, builds trust between employees and managers, increases happiness, and boosts performance. This is especially important in a post-COVID environment where remote work is more common than ever. 

How to Set Goals and Make Them Happen

Create a Workable Plan

Do you typically keep your New Year’s resolutions?

According to Forbes, 80% of New Year’s resolutions fail by February. As previously mentioned, the reason many goals fail is because they have no actionable basis. Even SMART goals need to have a workable plan, processes, and micro-tasks in place. 

In the aforementioned example, each piece of the goal encompasses several other, bite-sized goals. For example, creating a business plan or a pitch deck are entirely goals on their own. Each portion of your SMART goals should be treated like a subgoal and have its own micro roadmap. 

The key to creating a workable plan is the ability to prioritize your goals and keep operational goals to a minimum. If your operational goals are too large or complicated, it can quickly start to feel as if you’re never making any progress towards your primary goal.

Get the Most Out of Project and Work Management Software

Does your company use project management software?

Proper project and work management software helps you keep your goals on track. The pen and paper method is not likely to bring you results, while project management software can provide much more help with goal setting, tracking, and, ultimately—achieving, and here’s how.

Project management software can make scheduling and planning seamless. It also makes it much easier to collaborate with team members, stakeholders, clients, and managers. This is especially important when working towards larger goals that consist of a myriad of subgoals and dependencies. 

Different project management software suits different types of goals and projects. For example, with a tool like Infinity, you can customize your workspace any way you like and see your work from 6 different perspectives that are, by the way, switchable in seconds. If you are, let’s say, a managing editor, you might have a goal to publish 12 blog posts and 6 guest blog posts per month. The calendar view will give you a high-level overview of status and deadlines while columns will give you insights into task statuses, assignees, priorities, and more.


Balance Autonomy & Teamwork in Order to Thrive

Do you give your employees enough autonomy?

Naturally, you want your employees to be team players. The ability to work and collaborate well with others is an important soft skill. Thus, it is super important that your team members have a certain degree of autonomy. 

According to a study from GoRemotely, 80% of surveyed employees agree that ineffective employee communication leads to stress and that half of the employees who work on a team are stressed out because of differences in their work styles. 

A great manager makes collaboration easy while giving other members of the team a certain level of autonomy. Employees want to know and feel that they are a part of a team, but they also want to have the freedom to think creatively, get work done independently, and manage their workload without interruption. Doing so will certainly boost their productivity.

Reduce Workplace Stress 

How do you know if your employees are under stress?

Setting goals is one thing, but working on these goals in a manner that inflicts stress affects productivity negatively. Goals should be used as an inspirational management technique and not criteria by which employees are bound. Like people, goals change, and making adjustments on the go, based on results, is strongly recommended. 

Goals are great, but they can, unintentionally, bring some pressure to bear on. As a manager, it’s your responsibility to find ways to reduce workplace stress. Here are a few ways to do that: 

  • Avoid micromanaging your team. Micromanagement creates additional (and unnecessary) bottlenecks in your process and cultivates a culture of apprehension and being uncomfortable. Furthermore, if you constantly request approvals, conduct check-ins, or nag about minor mishaps, it can inadvertently eliminate accountability within your organization. 
  • Make yourself approachable and available. Your team should know that they can come to you for anything. For example, if they have a goal they’re working towards and realize that reaching that goal at the agreed-upon deadline would be difficult, they should feel comfortable letting you know why they’re struggling and what modifications should be made to their goals. Always remind your team that, although you have certain expectations, they are welcome to share their experiences and communicate struggles or barriers they are facing. 
  • Show appreciation. Numerous studies have shown that showing employee appreciation can do wonders for boosting employee morale and productivity. It’s important for you to give kudos to your team members when they achieve their goals and to show appreciation for their efforts (even in situations where they fall short of their goals from time to time). 

Wrap Up

No matter what industry you’re in, and whether it’s public or private, there’s no doubt goal setting will have a positive impact on your employee productivity. Effective goal setting allows you all to overcome procrastination and holds everyone accountable for their achievements. Even more, learning and implementing proper goal setting techniques can help you outside of the workplace, too. 

Think of goal-setting techniques as the vital components of a vehicle; your project or work management software might be the engine, your SMART criteria the wheel, and deadlines the gas pedal. In this way, think of the goal as a means to your final destination. How you set up, define, and manage your goals will ultimately determine how productive and effective you are towards reaching the next place in your career.


Dave Lavinsky
Dave Lavinsky
Dave Lavinsky is president and co-founder of Growthink. Over the past 20 years, Growthink has helped over 1 million entrepreneurs, business owners and executives to start, grow and exit their companies with an emphasis on business planning.

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