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Effective goal setting: Performance vs. development goals

Recruitment | 6 Min Read

Effective goal setting: Performance vs. development goals


Performance and development goals work in tandem to ensure employee satisfaction, efficiency, and business growth. While performance goals define employees’ job responsibilities containing established objectives that are specific, quantifiable, and clear, development goals focus on learning and career development that encourage employees to grow professionally.

Performance goals highlight performance expectations, competency, and productive behaviors. Development goals encourage learning new skills, gaining knowledge, increasing team participation, cultivating leadership skills, and enhancing existing skills.


The importance of goal setting for employers

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Better employee engagement:


Performance goal setting gives employees measurable objectives, increasing engagement and performance. Understanding the value of their contribution towards organizational goals helps raise employee morale. Similarly, development goals help employees gain the skills they need to achieve their performance goals.


Competitive edge:


Investing in skill-building programs in pursuit of development goal achievement gives an organization a competitive edge in the long run. Additionally, when employee skill-development goals align with business or performance goals, it empowers growth within the organization.


Better employee retention:


According to a BetterBuy study, employees who are offered professional development opportunities are 15% more engaged and have 34% higher retention than employees who are not. Therefore, development goals help employees stay engaged and strive to achieve performance goals.


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Performance vs. development goals



  • Performance goals define specific, measurable outcomes and help evaluate an employee’s present performance level.
  • Development goals facilitate employees’ personal and professional development through new skills, abilities, and knowledge.


  • Performance goals are for short-term achievements as they focus on measuring progress and improvements over time
  • Development goals help achieve desired outcomes over the long run.


  • Performance goals enable employees to contribute to the team and organization’s success actively.
  • Development goals are individual aspirations, but they often align with organizational goals.

Goal setting

  • Performance goals are set by managers, team leaders, or organizations for employees, and they may or may not involve prior discussions between management and the employee.
  • Development goals are set by employees with their manager’s assistance to gain competencies that enable career growth.



Clarity and understanding

Complete clarity and understanding regarding what is to be achieved and a well-defined plan to achieve it.

Real-time evaluation

Regular evaluation and progress tracking must be ensured to help employees move in the right direction and to guide employees if they are not.

Essential for growth

Both types of goals help improve employee motivation and increase employees’ focus on specific objectives that ensure success in professional and personal life.


Best practices for employee goal setting

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1. Write SMART goals:


Defining and setting up employee goals should be a collaborative effort and follow the basic SMART guidelines.

Specific: Define clear achievements with zero ambiguity in understanding.

Measurable: Define goals that can be measured qualitatively or quantitatively.

Achievable: Ensure that goals are realistic.

Relevant: Align goals to organizational objectives.

Time-bound: Define timelines for goal achievement.

The guidelines can be made SMARTER by adding the following:

Evaluate: Regularly monitor performance to ensure progress is being made.

Readjust: Flexibly modify the plan based on real-time needs.


2. Develop a measurement infrastructure


Specific goal measurement aspects must be defined to assess employee progress and efforts. It is important to establish KPIs that focus on improvement, such as team productivity, job satisfaction, skills gap, etc.


3. Performance tracking


Use performance evaluations or tracking as a regular feedback mechanism to help employees optimize their development and growth.


4. Modifying goals


The business landscape is evolving rapidly, which means that any set goals may also require modification with time.


How to define performance and development goals

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Performance goals


These goals must link employee development with organizational goals and team development. Therefore, performance goals can be performance standard-related, project-based, or about process improvement. For example:

Improving sales

Employees can achieve the goal of increasing sales to grow company revenue by accomplishing tasks like:

  • Identifying a set number of new sales opportunities every month
  • Devising new marketing strategies as per the latest market trends
  • Learning how to operate new, advanced CRM software

Generating more website traffic

Employees can accomplish tasks that help improve the popularity and visibility of the organization’s website:

  • Running targeted paid advertising campaigns online
  • Creating a certain number of engaging content pieces
  • Optimizing the web content for better search engine rankings

Enhancing customer satisfaction

Employees can foster customer loyalty and ensure high customer satisfaction by being assigned tasks like:

  • Identifying pain points in the customer journey and fixing them
  • Asking for feedback from customers
  • Conducting regular surveys to track progress in goal achievement

Setting marketing-related goals

Employees from the marketing department can be assigned performance goals like:

  • Increasing organic traffic to a website by 20% in 3 months
  • Devising efficient strategies to reduce social media spending by 25%
  • Increasing conversions and sales during the upcoming season
  • Determining a media mix for building an online presence after a brand identity revamp


Development goals


Directly connected to an employee’s personal development, development goal setting can include attaining new skills, learning new things, or improving competency levels. For example:

Honing leadership skills

Improving one’s capability to lead and motivate teams helps achieve developmental goals through:

  • Attending workshops on leadership
  • Reading leadership books
  • Seeking opportunities to lead within the organization

For example, Mercer | Mettl’s Leadership Development helps assess employees on their leadership qualities. This assessment measures competencies according to current leadership styles, critical thinking, and business requirements.

Acquiring certification

Involves acquiring specialized knowledge and skills in a particular field and earning certification. For this development goal, employees can:

  • Begin by identifying the field they wish to study
  • Put in research to choose the right certification program
  • Dedicate time for classes and create a studying schedule

Building professional relationships

A robust professional network is an effective way to bring in new advancement opportunities for employees as well as the organization.

  • Attend industry-related networking events, social events, seminars, etc.
  • Connect with leaders of different departments and teams within the organization
  • Be active on social media and share aspirations, ambitions, and achievements regularly

Strengthening communication skills

Counted among the most important soft skills for aspiring leaders, employees can enhance their communication skills by:

  • Engaging in open conversations with teammates
  • Actively listening to others
  • Allowing people to voice their opinions


Common challenges to effective goal setting

  • Setting unachievable goals reduces employee morale. Creating clear, measurable, and specific employee goals supports better performance over a stipulated period and aids career growth.
  • Improper timeline definitions for employee goals can hamper everyday work. Setting achievable timelines for accomplishing short-term goals helps employees understand the maximum time they have to achieve an objective.
  • Properly defining achievement targets allows for tracking employee performance in real time. Without this factor in goal setting, employee accomplishments over a set period cannot be evaluated.
  • Using iterative feedback helps define key performance indicators and a progress infrastructure, allowing managers to provide constructive feedback wherever necessary.


How Mercer | Mettl can help

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Proper goal setting and regular assessments to garner insights on employees’ progress are crucial for employee engagement and positive relations.

Mercer | Mettl provides a suite of advanced digital tools to help organizations streamline their goal-setting, assessment, and feedback processes. Organizations can choose customized solutions that encompass a battery of scientifically validated assessments perfectly suited for an organization’s individual development and business needs. The tools and research-backed assessments, cloud platform, and in-depth analytics are perfectly placed to help companies reinvent their organizational development strategies, delivering transformative results across the entire employee lifecycle.



Employee performance and development goals are beneficial to improve employee engagement, satisfaction, and retention, while also contributing towards achieving organizational goals and driving business results. Mercer | Mettl offers customizable holistic online assessments to help businesses design relevant performance and development goals, including Skills Gap Analysis, Succession Planning, High-Potential Identification, and Leadership Development.



Can you have a goal that is both a performance and development goal?

What is the purpose of performance management and development?

Originally published May 15 2023, Updated June 5 2024

Written by

Vaishali has been working as a content creator at Mercer | Mettl since 2022. Her deep understanding and hands-on experience in curating content for education and B2B companies help her find innovative solutions for key business content requirements. She uses her expertise, creative writing style, and industry knowledge to improve brand communications.

About This Topic

Performance appraisal, also known as performance review, is the process of assessing a professional’s progress, job-relevant skills and areas of development, over a set period.

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