Managers have long understood the importance of effective goal-setting for employee motivation. Much more than a means of quantitatively measuring employee performance, goal-setting combines clear deadlines and established objectives to help employees work in a more structured and effective manner.
When done well, goal-setting can increase employee engagement, boost employee performance, and foster a company-wide culture of development. On the other hand, empty and abstracted goals can actually hinder performance instead of driving success.
Worryingly, one survey found that 60 percent of employees don’t know what their company’s mission, vision, and values are. In another survey, only 13 percent of employees “strongly agree[d]” their managers help them set performance goals. It’s no wonder, then, that so many companies fail to achieve the most important part of goal-setting: aligning personal goals with company initiatives.
However, a more collaborative approach to goal-setting can help improve employee motivation and engagement while ensuring that individual goals serve the company’s overall mission.
The Benefits of Collaborative Goal-Setting
As the name suggests, collaborative goal-setting is a process in which employees and managers work together to identify and set goals. As opposed to the closed-door leadership style in which decisions are made unilaterally by managers and enforced from the top down, collaborative goals prioritize transparency and team work. When goals are set collaboratively, employees and managers come together to identify, evaluate, and prioritize objectives. Ideas are shared between manager and employee in an open and inclusive conversation.
Research shows that collaborative goal-setting drives employee engagement. According to Gallup, “individuals who strongly agree that their manager helps them set performance goals are nearly eight times more likely to be engaged.” Another Gallup report found that employees whose managers hold them accountable for their goals are 2.5 times more likely to be engaged.
Let’s break down some of the key reasons why collaborative goal-setting is so effective in motivating employees:
1. Collaborative Goals Align Personal Goals With Company-Wide Objectives
Personal goals are only meaningful if they are connected to broader organizational ambitions. When personal goals are abstract and arbitrary, employees are unable to measure their work beyond the scope of their individual efforts. This makes employees feel out of touch with the broader organizational workings and, therefore, more prone to becoming disengaged.
In contrast, when personal goals are aligned with broader objectives, employees have a clear idea of how their work contributes to the bigger picture. In turn, employees can monitor the direct impact of their goal-completion on wider company initiatives.
Moreover, the culture of collaboration that arises from collaborative goal-setting breeds more accountability and trust. Everyone plays their part in advancing the company’s mission, and each role is valuable to the organization in clear terms.
2. Collaborative Goals Encourage Communication
Communication is key for employee motivation. When employees feel their voices are consistently ignored, they’ll become less motivated and engaged.
Communication is not simply a matter of hearing employees out. Rather, organizations must encourage reciprocal communication between managers and employees. Employees expect their leaders to really listen to their ideas, concerns, and questions and to engage in dialogue with them. In turn, leaders who truly listen to and understand their employees are able to inspire professional development and improve employee performance.
Annual performance reviews make goal-setting an annual task. As a result, the goals set in these conversations fail to address the ongoing, year-round needs and ambitions of the employee. These goals also fail to connect with the changing objectives and missions of the company.
Setting collaborative goals requires ongoing and open communication channels. Each goal needs to be clearly articulated and consistently reinforced. Moreover, collaboration necessitates a two-way dialogue. Employees and managers offer input and work together to establish specific, manageable, and pragmatic goals. Managers are not only listening to their employees but also acting on what they hear.
3. Collaborative Goals Encourage Flexibility
Business moves quickly. Priorities can change overnight, and corporate directions can shift dramatically as a result. In this climate, fixed goals can easily become obsolete.
Although inevitable, dramatic business changes can have a devastating effect on employee morale. When an employee works toward a goal, their motivation comes from the desire to push the company forward and impress their colleagues. If the goal becomes obsolete and no longer reflects the company strategy, the employee will likely feel their efforts and hard work were futile.
Collaborative goals are dynamic and ever-evolving by nature. Built on a foundation of ongoing communication and mutual trust, these goals can quickly be adjusted to remain relevant, whatever the organization’s current situation. When employees and managers work together to establish goals, it becomes easier to keep everyone aligned through changes in company strategy and objectives.
Stuart Hearn is CEO of Clear Review.