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Glossary

Target Agreement

Summary

Objective setting is a crucial component of modern human resource management, where employees and managers jointly establish goals that are to be achieved within the scope of their activities. This agreement enhances the motivation and performance of employees, which ultimately leads to an improvement in the overall performance of the company. The individual goals are usually aligned with the overarching company objectives and enable a clearer focus of the employees on these goals.

Introduction

Objective setting is a term from human resource management that refers to the process of jointly setting goals between employees and managers. This process boosts the motivation and performance of employees and contributes to the improvement of the company's overall performance.

Definition

Objective setting is the agreement of individual goals between employees and their supervisors. These goals are to be achieved within the scope of the employees' activities and serve to increase performance capability, motivation, and satisfaction. The individual goals are often aligned with the overarching company objectives, enabling a clearer focus of the employees on these goals.

Objectives of Goal Setting

The goal setting pursues several objectives:

  • Enhancement of motivation and performance capability of employees
  • Improvement of communication between employees and managers
  • Increasing the transparency of requirements and expectations
  • Development of a goal-oriented company culture
  • Increasing employee satisfaction

Goal Setting Process

The goal setting process consists of several steps:

  1. Goal Definition: The manager and the employee jointly define the individual goals to be achieved within the scope of the employee's activities. The goals should be formulated SMART, i.e., specific, measurable, accepted, realistic, and time-bound.
  2. Goal Setting Discussion: In a personal conversation, the goals are jointly discussed, adjusted, and recorded in writing. The goals should be formulated in a way that is understandable and traceable for both sides.
  3. Implementation: The employee works on achieving the goals during the agreed time period. The manager should provide support and, if necessary, assistance and feedback.
  4. Goal Monitoring: At the end of the agreed time period, there is a review of goal achievement. It is discussed to what extent the goals have been achieved and whether adjustments are necessary.
  5. Performance Review: The achievement of the goals is evaluated based on objective criteria. Bonus payments or other incentives can also serve as a reward for successful goal achievement.

Structure of Goal Agreements

The structure of goal agreements can take various forms:

  • Individual Goal Agreement: The goal setting occurs between an employee and their manager. The goals relate to the individual tasks and responsibilities of the employee.
  • Team Goal Agreement: The goal setting is done collectively for an entire team. The goals relate to the team's collective performance and collaboration.
  • Project Goal Agreement: The goal setting occurs for a specific project and relates to the collective achievement of the project goals.

Opportunities and Risks of Goal Setting

Goal setting offers numerous opportunities but also involves some risks:

Opportunities:

  • Boosting the motivation and performance capability of employees
  • Promotion of communication between employee and manager
  • Increasing employee satisfaction through transparent requirements and expectations
  • Development of a goal-oriented company culture

Risks:

  • Overburdening employees with unrealistic goals
  • Development of a lone wolf mentality and competitive thinking
  • Lack of flexibility and adaptability to changes
  • Goal agreements as a mere control instrument

Conclusion

Goal agreements are an important tool in human resource management to enhance the performance and motivation of employees. Joint goal setting fosters communication between employees and managers and increases employee satisfaction. The goals should be realistic and aligned with the overarching company objectives. However, when implementing goal agreements, potential risks such as overburdening or competitive thinking should be considered.