Ask any employee how they feel about goals at work and you’re likely to get a lukewarm response. A lot of people associate the concept of goals and goal-setting with their annual performance review, which means it’s hard to separate the idea of growth from the promise of a bump in salary or a promotion.
But it turns out that tying development goals to salary is not the most effective way of motivating employees (hence the less than enthusiastic reception). So how do you create an environment where employees feel motivated to consistently pursue their goals? Let’s investigate!
The traditional approach to goal-setting
Most of us have experienced some variation of this: You sit down with your manager and come up with the goals that you’ll be pursuing, often for a long time period like the next quarter (or even the entire year). Your ability to achieve these goals is then used to determine whether you receive a raise or promotion, which you discuss with your manager at the end of year meeting where you then plan your goals for the next period.
This approach is flawed for a few reasons: First, the fact that achieving your goals is tied up with monetary compensation or outward recognition (in the form of a promotion) complicates motivation. Daniel Pink’s research shows that money is actually not a very effective way to motivate employees. They’re much more likely to be motivated by things like the desire to learn and master new skills.
Similarly, behavioral science has demonstrated that extrinsic motivation (which relies on external factors) is much less effective than intrinsic motivation (which is based on a person’s innate desire to accomplish a specific goal).
This approach to goal-setting and performance measurement is also based on what psychologist Carol Dweck refers to as a “fixed mindset.” By focusing on specific results rather than the process that employees used to achieve them, companies and managers send the message that employees aren’t really able to change.
And, of course, the fast-paced nature of today’s workplace means that priorities are often shifting and goals that are set at the beginning of the year aren’t likely to be relevant 12 months later.
Considering all these factors, it’s not hard to see why the traditional approach to goal setting is wildly unpopular among both employees and managers!
The high-performance approach to goal-setting
In the previous section we examined some of the flaws in the current approach to goal setting. But this doesn’t mean that goals should be scrapped altogether. Goal-setting has been shown to increase performance, in some cases by 36%! So how can it be improved? Let’s take a look at how high-performing organizations approach goal-setting.
Many companies have begun to decouple employee development from performance reviews. This means that employees can set goals for their professional growth without fear of it having a negative impact on their compensation. This approach fosters what Carol Dweck calls a “growth mindset.” When employees feel comfortable admitting that they don’t have a particular skill yet, it allows them create a path for learning and have open conversations with their manager about how to get there.
Along the same lines, having goals removed from compensation decisions makes it easier to tap into intrinsic motivation. Employees can think about what they’re truly interested in learning and will be much more motivated to pursue it.
And finally, this approach can free employees to aim as high as they’d like since they’re not worried about the repercussions of not meeting their goals the way they are when achieving them is tied in with performance.
How to help your employees set growth-oriented goals
Want to see your employees enjoy the benefits of better goal-setting? Here are a few tips to improve your organization’s approach to growth and development.
Remove compensation from development goals
The first step is to decouple compensation from development discussions. A number of companies like Google and VMware have seen success with this approach.
Provide a framework so employees know what sorts of goal to set for themselves
You don’t want to tell employees exactly which goals to set for themselves since this will reduce the chances of tapping into intrinsic motivation, but at the same time, it’s helpful to provide a framework. Give examples of the types of specific, process-oriented goals that employees are likely to stick to and achieve.
Have regular check-ins about development
Setting a regular cadence of check-ins gives employees the chance to share how it’s going. Managers can also use this opportunity to help their direct reports reassess where their focus should be since it may shift based on specific projects or other changes in company priorities. Get more tips on how managers can better support employee growth in this post.
Praise to promote a growth mindset
Carol Dweck recommends focusing praise on effort and perseverance (things employees have control over) rather than talent (something they don’t have control over) in order to encourage a growth mindset. Think about ways of framing your development discussions that will encourage growth and accepting challenges rather than shying away from them.
Offer learning & development resources
The burden doesn’t have to fall on managers and HR to identify all the learning opportunities for employees. By providing self-service resources, you can empower employees to lead their own growth and development journey.
Putting it all together
Setting ambitious goals is an important way to drive employee performance and create a winning culture. But it’s essential to approach goal-setting in a way that resonates with employees. By giving them the power to set goals that are meaningful and personal, you can boost their chances of success—and your company’s, too.
Want to learn more about how to approach goal-setting and employee development? Download a copy of the “Employee-Owned Performance Development” eBook.