tant that the goal-setting process involve both employee and
manager as active participants.
In any event, we’ll take the position that you are going to use
your common sense during goal setting. Make the goals as spe-
cific as you need them to be to improve performance.
Parts of a Goal Statement
There are two major parts to a goal statement. The first part
describes what the employee must accomplish, the “what.” The
second part describes the criteria that will be applied to deter-
mine if the employee has achieved the “what.” Let’s look at some
examples.
Consider this statement: “Reduce overall spending by 10%.”
The first part—“reduce overall spending”—describes the “what.”
The second part—“by 10%”—describes the metric that can be
used to determine if the overall goal is achieved. By itself, the first
part is too vague. By adding the second part, the criterion, we
now have a specific and concrete way of determining success
and evaluating progress toward the goal throughout the year.
Not all goals are so easily quantified. Take this example:
“Prepare accounting statements that are approved without sig-
nificant modification by the independent auditors.” In this case,
the “what” is “prepare accounting statements.” The criterion,
however, is not something that is counted or measured. If the
accounting statements are approved “without significant modi-
fication” by the auditors, then the employee has achieved this
goal. (Of course, it would be good if you could define or describe
what you mean by “significant.”) This makes perfect sense. This
goal accurately reflects the business importance of having audi-
tors provide the stamp of approval. So criteria can be quantifi-
15Setting Performance Goals That Work