Building a goal-setting system for employees and providing incentives for their achievement is a crucial tool for enhancing business efficiency. When employees know what is expected of them and how their successes will be evaluated, they can focus on tasks that lead to the accomplishment of set goals.
Research shows that companies that have established a goal-setting and incentive system for their employees often have higher profitability indicators compared to those that do not employ this approach. For instance, a Gallup study revealed that companies with a high degree of goal commitment have a 3.3% higher annual profit than companies with low goal commitment.
Constructing a goal-setting system may be a time-consuming and effort-intensive process, but the results can be significant. In this article, we will explore how to build a goal-setting system for employees and what incentives can be used to stimulate their achievement.
Step 1: Defining company goals
The first step in constructing a goal-setting system for employees is to define the company's goals. Company goals should be Specific, Measurable, Achievable, Relevant, and Time-bound (SMART goals). For example, a company goal could be to increase annual profit by 10% in the next year. This goal is specific, measurable, achievable, relevant, and time-bound.
Step 2: Developing goals for each employee
Once the company goals are defined, the next step is to develop goals for each employee. Employee goals should be aligned with the company goals and contribute to their achievement. A goal-setting system for employees, based on the SMART methodology, is one of the most effective approaches to enhancing productivity and work efficiency. Goals formulated according to this methodology should be:
- Specific - clear, concise, and unambiguous;
- Measurable - have criteria that allow determining whether the goal has been achieved;
- Achievable - realistic and attainable within the given timeframe and available resources;
- Relevant - aligned with the company's strategic objectives and the employee's tasks;
- Time-bound - have a clearly defined deadline for completion.
Examples of such goals include:
- Increase sales of product X by 10% within the next 6 months through marketing initiatives.
- Reduce response time to customer inquiries by 20% within the next 3 months through streamlining request processing.
- Improve employee satisfaction levels to 85% by the end of the year through implementing a feedback system and enhancing working conditions.
Step 3: Designing an incentives system
An important component of a goal-setting system is the incentives system. When employees see that achieving goals not only brings them personal satisfaction but also can be rewarded with monetary or other incentives, they become more motivated and productive.
The incentives system can employ various approaches, depending on the company's characteristics and budget allocated for incentives. These may include:
- Financial incentives: bonuses, rewards, salary increases, etc.
- Non-monetary incentives: recognition, honorary titles, privileges, paid time off, etc.
- Internal events: corporate parties, trips, excursions, etc.
It is crucial for the incentives system to be fair and transparent, so that employees do not feel deceived or inadequately rewarded for their efforts. Additionally, the incentives system should be linked to the achievement of specific goals to motivate employees towards productive work.
Building a motivation system quickly and effectively
All the aforementioned steps can be swiftly accomplished using the WicanDo employee motivation platform, leveraging our expertise and experience. With this application, you can establish goals for employees based on work performance indicators. Employees can track their goal progress over various periods, while managers can view KPI achievement analytics for departments, as well as the progress and contributions of each employee.
Furthermore, you can assign any relevant tasks specific to your company that you want to motivate employees with, such as participation in training and sports events, publishing job vacancies and company reviews, or meeting step quotas.
The fulfillment of employee goals and tasks is rewarded with points that they can exchange for prizes and incentives of their choice in the rewards marketplace. Additionally, celebrating an employee's goal achievement is publicly recognized, allowing for public acknowledgment of their work.