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A goal that is not realistic or too broad or vague will have a demotivating effect on your employees. You want your employees to reach the end of their work day feeling like they accomplished small goals, instead of feeling like they will never achieve a larger, more intimidating goal. For example, being one of the top ten distributors in a market with hundreds of competitors is an unrealistic goal for a small, growing business. It might be more effective to focus on improving the company's quarterly sales or improving the company's distributor's list for the year. These "small goals" can be monthly or quarterly targets. Clearly link these targets to a long term mission. Employees will be highly engaged knowing that their efforts are directly contributing to the company's mission. This will allow your employees to get direct feedback from management as to how close or far they are to achieving their goals. Set aside the time to tell employees what they doing right and where they need to improve on. Nothing engages an employee like the prospect of a raise or appreciation in an upcoming review, so use these sessions to motivate the employee to work harder. The review can act as a scheduled "reward system". You may even notice employees becoming more serious and dedicated to their work closer to review time. When managers offer consistent feedback, employees feel their managers support them. By building a relationship of trust and openness, the employees will feel free to discuss even their small, rare mistakes and work on them so they do not turn into bigger problems later on. Encourage growth and development by providing suggestions or have your employees come up with solutions to solve their current issues during or after their performance assessment.
Set clear, realistic goals. Have a long term mission in place and translate it into small goals. Set up regular performance assessments.