Target Dialogue: management by setting goals

The overall company strategy cascades down from top management to the different business units, departments, functions, and ultimately to every single employee. Designing a combination of  concrete and measurable targets covering the company, team, and individual performance is the basis of a performance management leadership style. Written targets provide a framework for the evaluation of team and employee performance. Ultimately, they are the basis of incentive pay-out in those companies where wages are partly linked to team and individual performance.




The process of setting and reviewing individual targets is usually known as Target Dialogue. Large companies will usually devise schemes that include a combination of corporate, team and individual targets. Corporate and team goals are set from the General Management and spread top down to the rest of the company teams by the corresponding managers.

Supervisors have three functions during the Target Dialogue process:

Communication of company and team goals: managers communicate the corporate and team targets, watch for the alignment of their team, and gain commitment from their direct reports. 

Individual target setting: individual targets, which are aligned with the company goals, are agreed between employee and supervisor at the beginning of the term.

Review: at the end of the year, the performance of the company is evaluated by general management and the result communicated again to the employees through the respective managers. Additionally, supervisor and employees discuss the achievement of personal targets and agree on a final quantitative score that will be the basis for the individual incentive pay-out.

Target dialogue template example