Managers should meet with employees and discuss company strategy and his own goals. Then he should ask all employees to draft a set of goals and discuss it with them individually, then review their progress regularly. According to the management.about.com website, every other possibility has disadvantages.
1. The employee writes goals, and the manager just rubber stamps them
It is good as far as the employee's commitment is concerned. However, the employee doesn’t have insight into company and department strategy and therefore may be unaware of what would make proper goals. When the manager fails to provide him with input, the goals are doomed to be less relevant. Furthermore, when the manager is not involved, the employee may get the impression that these goals don’t really matter.
2. The manager writes goals for the employee
When a manager sets the goals for the employee, the strategic context is taken into account, but there is no employee involvement, leading to low commitment. Research suggests that having a say in our work is the most important motivational factor. Also, because employees are familiar with their work, they can have a better idea of what should be improved and how.
3. The employee writes a draft and reviews it with the manager
This approach is best so far, because there it involves collaboration. The flaw is that the employee still has no idea of the wider context. The company's directions and strategic needs as a whole may be not reflected in the list of goals and the manager may need to tell him to re-work it several times.
4. The manager writes a draft and reviews it with employee
Again, this involves discussion and that is good. The employee has input as to what is going to be on the list. However, most employees will just agree with the list the manager has drafted and there will be no buy-in.
5. Both write a draft, and the manager makes the final decision
The shortcomings of this approach is that there is a certain feeling of competition. The manager can write better goals since he knows more about the company's strategy on a higher level.
How do you set your employees' goals? Which way do you think is the best?
-jk-