The top-down approach enables all sub-goals across the organisation's hierarchy to correspond to the company's overarching goals. Teams can create goals very quickly; however, the disadvantage is that management is only familiar with the opportunities and problems of individual departments in unique cases. Unrealistic and therefore unattainable goals can be the result.

With bottom-up planning, teams at the lower levels of the organisational hierarchy set the goals first. In this case, managers have conversations with direct reports to identify focus areas and priorities. These are formed into goals and then gradually integrated into the overarching goals and strategy framework at a higher level.
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Goals tend to be more realistic with bottom-up because planning starts directly from the employees involved. The result is higher motivation and identification with the created goals. However, a challenge that may arise from this planning approach is an increased expenditure of time and coordination. Also, plans might contradict each other and the goals set for the organisation are not ambitious enough.

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Using a balanced approach is recommended, i.e., using top-down and bottom-up planning simultaneously. First, the manager sets a target or clearly defines the context (overarching goals), taking bottom up insight into consideration. Then, the employees use this context as guidelines to create their own goals, which top management approves.

Once there's a planning approach in place, the next step is to take the proper steps to ensure planning is successful and there's a framework and culture in place to monitor progress.

Define organisation, group and personal goals

Employees are more aligned once they understand how their effort will contribute to the more prominent organisations or team ambitions. There should be healthy Manager-Employee relationship. Start by asking your employee to draw up goals that directly contributed to the overarching goal of the organisation for that quarter or year. Once initial goals have been suggested, discuss whether targets set are challenging and realistic. This process looks like a negotiation between the employee and the manager. When the goals are set too high and demanding, employees can get discouraged and resent you. If the goals are too low, you will miss opportunities, settling for mediocrity. The sweet spot is to have ambitious goals that create energy and momentum.

Managers believe their work is complete once the goals of their team members align with the organisational goals. However, this is only half a piece of the puzzle. The other half involves setting goals that an employee is personally trying to accomplish at work. By taking into cognizance the interests of your employees,  you'll get back more value from them. This goes a long way in Employees satisfaction and productivity. For example, if your employee has expressed an interest in leading, but it's not part of her job responsibilities, you can find ways to sculpt her job to include being responsible for minor details of the project or peers.

The first step is to ask if they have any personal goals to share with you. This ask should be subtle, and your employees should not feel any pressure -- they should only share if they feel comfortable. After which, you can then ask what adjustment they think is necessary to help achieve these goals. Adopting this approach creates a feeling of ownership for the goals and alignment as personal goals should also contribute to the team's or company's goals.

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Monitor progress & Hold employees accountable

Frequent monitoring of progress will help managers detect troubles early on. The biggest mistake managers can make is to wait until quarterly or bi-annual reviews to check in on goal progress. Instead, managers should conduct reviews weekly or bi-weekly and provide feedback where necessary. Even high-performing members need ongoing coaching and feedback. The best approach is to ask your employee what monitoring and feedback would be most helpful to her, especially if the goal is challenging.

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What to do when goals fall short

While monitoring your employees' progress, there might be a need to rework them to ensure they are. Only very few people reach their goals without some challenges along the way. In this case, ensure your employee comes up with a potential solution so you can provide guidance and coaching. You can also increase the frequency of monitoring to know how the goal is doing. If efforts to rework the goals fail, then you will need to get further involved.
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However, there are scenarios that even with the best support, employees fail to meet their targets. In this case, you need to figure out what went wrong and why. As a manager, you can't just brush it off -- discuss what happened and where you think something went wrong with your employee. Managers need to learn the right way of dealing with negligent employee. From Netflix's "No Rules, Rules" culture playbook, a recommended approach is to "Sunshine the failure"; ensure your employee publicly writes about what went wrong, the learnings from the failure and possible solutions. Once potential solutions have been discussed, the employee can take another stab at reaching the goal. If the failure was something outside the employee's control, acknowledge the disappointment but don't dwell on it. Instead, quickly move on to the next thing.

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FAQs

How do you handle situations where an employee's personal goals conflict with the organisation’s goals?

Handling situations where an employee's personal goals conflict with the organisation’s goals requires a nuanced approach. Managers need to engage in open and empathetic dialogue with employees to understand their aspirations and how they see themselves growing within the company. Sometimes, finding a middle ground where an employee’s personal development goals can be aligned with the organisation’s objectives through creative role adjustments or project assignments is possible. When conflicts are irreconcilable, it may be necessary to honestly discuss the situation and explore alternative paths within the organisation that better suit the employee's aspirations. This process underscores the importance of flexibility, communication, and a commitment to finding mutually beneficial solutions.
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How often should managers meet with employees to review progress on goals?

Regarding the frequency of manager-employee meetings to review goal progress, a general guideline is to have these check-ins at least once a month. However, the optimal cadence may vary depending on the nature of the goals and the employee's role. For example, quarterly meetings may suffice if an employee works on a long-term project with milestones spread over several months. On the other hand, if an employee is responsible for critical, time-sensitive goals, weekly or even bi-weekly check-ins may be more appropriate. The key is to balance providing regular feedback and support while allowing employees sufficient time to progress on their goals.
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How can organisations measure the impact of goal setting on employee satisfaction and company performance?

Measuring the impact of goal setting on employee satisfaction and company performance can be approached through quantitative and qualitative methods. Surveys and questionnaires can gather employee feedback on their satisfaction with the goal-setting process and its influence on their engagement and motivation. Performance metrics, such as productivity levels, quality of work, and achievement of specific benchmarks, can provide quantitative data on the effectiveness of goal setting in enhancing company performance. Additionally, turnover rates and employee engagement scores can offer insights into the broader impact of goal setting on organisational health. By analysing this data, companies can refine their goal-setting processes to support employee satisfaction and company success better.