Goals are an integral part of business success. Without goals employees do not know what to strive for, or how to tell when they have accomplished something extraordinary. Each employee must have performance goals that he is expected to meet. As a manager, you are responsible for setting your subordinates' performance goals. When you set performance goals, your subordinates know what is required of them and what they must accomplish to help the organization succeed.

Schedule a goal-setting meeting with each employee. This is the time for the two of you to discuss what types of performance goals are necessary to fulfill their job requirements, as well as to determine what types of goals the employees have in mind for themselves.

Ask your subordinate to describe the performance goals he has set for himself. If he does not know where to begin, coach him through the goal-setting process by asking prompting questions. For example, ask your employee what types of achievements he believes would be valuable, what his strengths and skills are. Then ask him what he can do to improve those strengths and skills.

Define your expectations. Let your employee know what is expected, such as diplomacy in communication, exemplary customer service and working collaboratively with the rest of the team.

Align your goals, and the company's goals, with your subordinate's goals. You want to build performance goals based on what the two of you come up with. This gives the employee a sense of involvement and ownership in his success carrying out the goals. If you tell the employee what his goals are, without giving him the chance to provide input, he may feel like he does not have any control over his own career.

Make the goals clear, specific, realistic and measurable. You want your employee to easily understand what is expected of him. It is important to keep goals realistic because you do not want to set up your subordinate for failure. You must also make the goals measurable so that you are able to track the employee's progress in meeting those goals.

Ask your subordinate how he will go about reaching those goals. Tell him to come up with a strategy or a plan of action. Identifying how to reach a goal is part of the goal-setting process.

Come up with a monitoring process. Let your subordinate know how he will be monitored to make sure he is on track to meet his goals. It may be that you want to meet with him quarterly to review the progress, or that you set up a goal checklist for your employee to keep track of himself.