What are Performance Goals? - Definition & Examples

Lesson Transcript
Instructor: Aaron Hill

Aaron has worked in the financial industry for 14 years and has Accounting & Economics degree and masters in Business Administration. He is an accredited wealth manager.

Learn what performance goals are and how they are vital to your job success. Find out the keys to setting effective SMART goals, and see a few examples of how these goals can be written.

Defining Performance Goals

Do you have a desire to work for a big corporation? Or, maybe you want to manage people or even own your own business? Have you ever wanted a transfer to a new department, get promoted, or get a pay raise? If the answer is yes to any of these questions, you may need to read this lesson. These things are usually only possible when employees set and meet basic performance goals dealing in areas such as motivation, productivity, accountability and job satisfaction.

Performance goals are short-term objectives set for specific duties or tasks in your current job position. These goals are usually related to the overall company goals or specific department goals where you work. They help you know what is expected of you in your position. To be effective, it is important that they are clearly defined and easy to measure.

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  • 0:00 Defining Performance Goals
  • 0:52 How Are Performance…
  • 1:36 Why Are Performance…
  • 2:24 SMART Goals
  • 2:54 Examples
  • 4:10 Lesson Summary
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How Are Performance Goals Created

Where do these goals come from? A best practice is that a manager and employee work together to create goals that are specific both to the job and to the aspirations of the employee. This will help ensure that the employee is engaged and buys in to the company's goals. Goals can also come from the highest parts of the company.

For example, if an employee wants to attain a project manager role, it would be important for the manager to include a goal or two that involves the assignment of a few special projects. The manager might define timelines, types of projects, and ways to measure the project's success. The employee's future ability to get additional projects would most likely be driven by their ability to successfully achieve their current performance goals.

Why Are Performance Goals Important?

Why set goals? At a very basic level, most people like to know how they are performing. They also prefer to have a road map that helps keep them focused and prioritized on the right things. Performance goals help do this. They can also be vital in getting a promotion or pay raise because they are often used to gauge employee performance. At a higher level in the organization, executives like to create performance goals to make sure the overall company goals and those of the specific departments and employees are aligned. For example, if the main focus of the company is to reduce operating expenses by 20%, but many of the departments are hiring more sales employees, investing in new expensive software, and buying new equipment to help drive sales, the likelihood of reaching the expense goal of the company is very slim.


Setting SMART goals is an important part of performance goal setting and a mainstream technique used in corporate America. Using SMART methods require goals that are:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time-sensitive

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