Goal Setting for Performance Review Appraisal

Goal Setting for Performance Review Appraisal

Goal setting is the first step in performance management as it helps you and your team agree on what’s expected of them.

Performance goals are targets or objectives a professional must achieve within a specified period (typically a year) to have a good performance review. Performance reviews determine the year-end bonus, pay raises, and promotions for the staff.

If set realistically, performance review goals motivate your staff to work hard and meet their targets for a good appraisal.

Goal-setting and performance reviews are essential aspects of performance management and vital to get right for the sake of the company’s performance.

In this article, we’ll talk about goal setting for performance review appraisals and the most efficient way to set team goals.

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Understanding Performance Appraisal and Performance Management

People often use performance appraisal and performance management interchangeably, though incorrectly. These are two different concepts, and we’ll clarify them for you in this section.

Performance appraisal

Performance appraisal or review is the process of evaluating the work performance of each individual employee and their contribution to a company. It’s usually conducted annually and aims to help them learn and grow. 

Companies also use appraisals to identify the top-performing staff members for rewards and recognition programs.

Performance management

Performance management, on the other hand, is a broader concept, and appraisals are a part of it. It comprises everything from setting goals to tracking each employee’s progress, providing feedback, and rewarding good performance.

Similarities and differences between performance appraisal and management

The similarities between performance appraisal and management end in the fact that both deal with employee development and performance. As explained, the former is a part of the latter process.

To get a better understanding, check out these differences between the two.

Performance AppraisalPerformance Management
PurposeTo measure employees’ annual performanceTo regularly monitor and improve staff performance
Ongoing process
ScopeNarrow: Only deals with the formal yearly appraisalsBroad: Involves goal setting, performance tracking, feedback, etc.
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The Process of Setting Goals During a Performance Review Appraisal

The success of your performance review process depends on how well you’ve set the goals at the beginning of the year. The goal-setting process, though straightforward, requires input from multiple stakeholders and due diligence.

In this section, we’ll cover expert tips on how to set employee performance goals for performance appraisals the right way.

Team involvement in setting goals

Setting goals for performance appraisal should be a collaborative effort. While your role as a manager or team leader is crucial, you must also include your team in the process.

Here are some tips to get you started:

  • Start by assessing each employee’s performance and identify areas for improvement
  • Ask them about their professional development goals, motivations, and preferred career paths
  • Discuss the key areas that both of you agree they should work on in the coming year, including learning new skills
  • Set clear targets and objectives that each team member must meet before the year’s end
Create SMART goals to achieve your long-term objective with ClickUp’s Yearly Goals Template

If any of your team members are new to goal-setting for performance appraisals, you can suggest they use ClickUp’s Yearly Goals Template. Ideal for beginners, this template helps you identify your ideal future and what you wish to achieve.

The docs template lets you set and track annual goals for both your personal life and work. The template can:

  • Help you decide on measurable goals to track throughout the year
  • Guide you on how to set realistic and achievable goals
  • Make it easier to break down big goals into smaller, more manageable tasks
  • Allow you to quickly visualize and adjust goals as needed

Take advantage of ClickUp Meetings to set up goal-setting discussions with your staff. It makes agenda-setting and scheduling easy. 

At the end of the review process, ask for feedback from all employees to improve the process and make it more transparent.

The survey feature of ClickUp Form View is perfect for seeking employee feedback. It can also create easy-to-use self-appraisal forms for performance review discussions.

ClickUp Form View
Use the ClickUp Form view to create employee feedback and self-appraisal forms for the performance review process

Pro tip: use ClickUp Brain to summarize your meeting notes and cull out action items from them. Share these with team members after the meeting to ensure you’re on the same page.

Leadership’s role in performance goal setting

Apart from team members, you must also include senior leadership in the goal-setting process. They can help you set team goals for the year. So, your next step should be to meet with senior leaders and request their views on your plans.

Department heads or vertical leaders typically have their own goals, plus the collective goals assigned to their department. To meet those, they must ensure all the teams under their supervision strive to achieve those targets.

Leadership involvement in the goal-setting process ensures that the goals of individual teams are in sync with overall organizational goals. Moreover, leadership buy-in helps to get teams aligned on targets.

Incorporating performance indicators in goal setting

Goals, whether they’re for performance appraisal or any other purpose, should always be accompanied by key performance indicators. Don’t set qualitative goals for which you can’t measure performance. For each goal, you must have a KPI you’ll use to assess whether the goal is achieved or not.

The next step in the goal-setting process, therefore, is setting measurable performance indicators or KPIs for goals.

Utilize the ClickUp SMART Goals Template to create specific and measurable goals that you can also track easily.

Set better goals with the ClickUp SMART Goals Template

The template helps team leads and HR managers set and achieve goals by:

  • Defining SMART goals and breaking them down into smaller steps and tasks
  • Monitoring and visualizing the progress of tasks 
  • Assessing the resources required for task completion
  • Keeping stakeholders updated about the progress 

It offers five different views, including a SMART Goal Worksheet for brainstorming and storing idea

Measuring performance against goals

Once you’ve finalized and set goals, use goal-tracking apps like ClickUp to track and measure performance.

ClickUp Goals makes the goal-setting and tracking process easier and faster. Use it to create SMART goals, track their status, and measure key results. 

clickup goals feature
Set goals and visually track their progress using ClickUp Goals

You need to evaluate the results and KPIs at the end of the review period. Using good performance review software will help you streamline the process.

You can also use the ClickUp Performance Review Template to conduct one-on-one performance evaluation discussions with clear talking points for each employee. 

Use the ClickUp Performance Review Template to set clear discussion points for your review meeting and provide feedback

Use it to list the key discussion points for your one-on-one performance review sessions. You can also note down the feedback you want to provide an individual during the review session. 

It uses the start, stop, and continue format to let an individual know what they are doing well and what they should improve or stop altogether.

Once your meeting is over, share the feedback with each individual for future reference.

Alternatively, leverage one of the other performance review templates by ClickUp.

For low-performers, there are many performance improvement plan templates that you may use.

Pro tip: Help your team stay on top of their performance metrics and create a culture of transparency by setting up dashboards to track and update individual and team performance metrics automatically. You can do this with a few clicks using ClickUp Dashboards

Importance of creativity and teamwork in the goal-setting process

You can’t assess staff performance in silos. It’s not enough to evaluate how one performs on their individual tasks. You should also determine how well they work with their team members and perform collaborative tasks.

Ensure you include goals related to teamwork, creativity, and innovation during the goal-setting process. People who come up with creative solutions to problems and are quick to help others should be recognized and rewarded.

ClickUp for HR Teams can help you manage talent and reward top-performing staff members. 

Start with the ClickUp Bonus Matrix template to assign performance ratings and bonuses to staff members.

Visually organize staff ratings and bonus distribution using the ClickUp Bonus Matrix Template

Here’s how it helps:

  • See the performance ratings of all team members at a glance
  • Use color-coding to categorize tasks based on the level of expertise required for them
  • Organize the information on each employee’s current and proposed salary in a visual format

Aligning individual goals with the performance review process

One of the crucial goal-setting strategies is aligning individual goals with the overall business goals.

Design the performance review process, keeping both the employee and the company’s objectives in mind. Then, set team and individual goals that help meet the business goals.

Quick recap: Goal setting for performance appraisals

  • Start with the team: identify individual strengths and development areas, and let each team member articulate their plans for the future
  • Align individual goals with company objectives
  • Get leadership buy-in
  • Pick measurable goals, and decide how you will track them
  • Ensure you also include goals related to teamwork and collaboration
  • Set up mechanisms to track goals and review performance
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Benefits and Challenges of Goal Setting for Performance Appraisals

The importance of goal-setting in a workplace performance review can’t be denied. It sets the tone for the entire appraisal process and helps team leaders and managers objectively evaluate staff performance.

However, goal-setting is not easy. Let’s discuss the benefits and challenges associated with it.


Here are some of the key advantages of goal-setting for performance appraisal.

  • It gives a clear understanding of what’s expected of each employee and makes the performance appraisal process more objective and streamlined
  • Having clear goals keeps the staff motivated to perform well and achieve the targets to get rewards
  • Communicating performance goals helps you maintain transparency in the performance review process
  • Setting clear performance benchmarks holds individuals accountable for their work and encourages them to take ownership of their responsibilities
  • Setting annual goals helps align individual and team performances with overall business goals, driving business success


Though beneficial, goal-setting has some challenges as well. Let’s discuss some of these briefly.

  • Setting unrealistic goals could demotivate staff members and have the opposite effect on performance. The solution is to ensure all goals you set are realistic and achievable. If you are taking up a moonshot as a goal, ensure you link performance criteria not only to its achievement but also to efforts made toward it
  • It takes careful consideration to set holistic goals that don’t just focus on performance in one area but cover all important aspects. Involving teams, stakeholders, and leaders in the goal-setting discussion can help prevent this
  • One of the most common problems with goal-setting is that people often set vague or broad goals that are difficult to track. To prevent this, define metrics and tracking mechanisms along with each goal you choose.
  • If the goals don’t include teamwork and collaboration, you may end up pitting staff members against each other, which hampers the company culture. To avoid this issue, ensure that some of the goals relate to team skills such as collaboration, mentoring others, and being approachable and helpful
  • Maintaining fairness and transparency in the goal-setting and performance-tracking process is a challenge for many. Organizations must actively work on this aspect by setting up a communication cadence around goals, including open townhalls and email updates
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Types of Performance Goals and Examples

Here are some common types of performance review goals for performance reviews.

Team building goals

These goals aim to improve team collaboration and dynamics. As discussed, individuals can’t work and be evaluated in silos. How well someone works within a team also matters.

Including team-building goals in your performance review process ensures that you encourage staff to work on their teamwork and collaboration skills.


  • Attend four team-building activities and events in the year
  • Maintain 90% attendance for team meetings and actively participate in them
  • Mentor one new joiner in the team each quarter

Time management goals

Time management is a crucial business skill that helps professionals be more productive at work. SMART time management goals strive to improve an individual’s ability to manage multiple tasks while consistently meeting deadlines.

ClickUp’s Project Time Tracking
Measure and analyze the time spent on tasks to ensure productivity & adherence to the budget with ClickUp’s Project Time Tracking

To track such goals, we often use project metrics related to the timely completion of tasks and meeting project deadlines.

ClickUp allows you to add time estimates for each task, which you then assign to various individuals. By tracking the time taken to complete a task versus the initial estimate, you will be able to determine an individual’s time management skills.


  • Meet all project deadlines and complete tasks on time or ahead of time
  • Create a personalized time management plan to prioritize tasks and dedicate time for various daily activities
  • Reduce the turnaround time of customer support queries by 15%

Project management goals

Project management goals aim to test an individual’s professional skills and performance in terms of how well they manage their day-to-day work tasks and projects. It could include anything from staying within the project scope and budget to getting high client ratings.

Use ClickUp for goal-setting and to track staff performance toward these goals.

Manage end-to-end operations with ClickUp
Set project goals and regularly monitor whether they’re on track using ClickUp


  • Create a project scope and execute it without any scope creep or last-minute changes
  • Make a budget forecast for a project with 95% accuracy
  • Reduce project costs by 10%

Problem-solving goals

These goals aim to improve an individual’s ability to identify issues and devise effective and innovative solutions. This is an important business skill that helps your team overcome any hurdles that affect their projects.

Problem-solving is not an inherent skill; we have to hone it with time and practice. By making it a part of the performance appraisal process, you incentivize staff members to help with project challenges proactively instead of leaving them to their managers or supervisors.


  • Identify three key process-related issues and offer feasible solutions for each
  • Propose a plan to improve project efficiency and resource utilization
  • Create and execute a plan to reduce customer churn by 20%

Educational technology goals

These are learning and development goals that specifically focus on learning how to use new software and technology for work. With technologies like AI and robotics completely changing the business landscape, upskilling your team to use the latest tools is a must.

That’s why you should allow your staff to participate in company-sponsored training programs and give them the best tools to do their jobs.

The ClickUp Learning and Development Goal Setting Template can help you set training goals for your team members.

This template uses the SMART goals framework for goal-setting but offers a few additional features. You can, for example, tag tasks based on their progress status—on-track, off-track, etc.

It also uses color coding to categorize tasks based on the effort required to complete them. The best part is that it lets you assign each task to one or more assignees to ensure accountability.


  • Complete 10 hours of technology-related training this year
  • Attend or host one knowledge-sharing session with your team every month

Communication goals

Effective communication is crucial for all aspects of a successful business, as it helps people exchange ideas, share knowledge, and collaborate with others.

Soft skills like these are especially important for people in managerial roles and are a crucial leadership quality. In fact, many organizations consider this a necessary skill when promoting people to senior positions.

That’s why it’s essential to set goals to improve your team’s communication skills. These could relate to verbal and speaking skills or written communication, depending on each individual’s strengths and weaknesses.


  • Complete three training sessions on improving verbal or written communication skills this year
  • Speak at two team meetings, events, presentations, or knowledge-sharing sessions
  • Produce one white paper related to the team’s research

Related: A guide to operational goals (with examples and templates)

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Simplify Goal Setting With ClickUp

Goal-setting is an integral part of performance evaluations. Without clear and measurable goals, team leaders cannot determine an employee’s job performance over a year. 

Having clear goals helps them identify the top-performing and low-performing staff members. Based on performance reviews, they may reward some employees and provide constructive feedback to others to improve performance.

This process helps with training and professional development of your staff, ensuring they get better at their jobs every year.

Having an all-in-one talent and project management solution like ClickUp will boost your team’s productivity and streamline your annual performance reviews. From goal-setting to performance evaluations, ClickUp can help with all aspects of performance management. 

Sign up for free and explore all its features.

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Frequently Asked Questions (FAQ)

1. What is goal-setting for performance appraisal?

It is the process of setting performance and professional development goals for employees in an organization. These goals become the basis for their annual performance review and ratings. Teams normally set goals at the beginning of the business year. While performance is measured periodically, the final formal review is done at the end of the year.

2. How do you write goals for a performance review?

Use the SMART goals framework to create specific and measurable goals you can realistically achieve within the specified period. 

Consider various types of goals and set goals for different categories, such as problem-solving, leadership goals, and team collaboration goals. Then, identify and list the key performance indicators you’ll use to measure an individual’s performance on each goal.

Take input from the leadership and discuss the goals with each staff member before you finalize them. Document the goals in an organized manner and share them with each staff member so they can reference them throughout the year.

3. What is goal setting in the workplace?

Goal setting is the process through which team leaders and managers set individual and team goals for their teams that align with the overall business objectives. The aim is to make each individual accountable for contributing to the company’s success and have them take ownership of their part. 

Goal setting also helps maintain transparency in the performance appraisal process by letting individual team members know what’s expected of them. This improves employee satisfaction and engagement as well.

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