Defined

• Employee performance agreements help set meaningful, attainable goals and objectives for an employee. The agreement puts both company management and employees on the same page regarding the expectations of employment. The agreement is often beyond a regular job description.
  
  

Features

• Most performance agreements will set specific goals and objectives for employees. For example, goals can include increasing sales by 10 percent, achieving a tier two bonus, remaining positive during difficult work situations and decreasing operating costs by two percent for the next quarter.
  
  

Purpose

• Companies will often use employee performance agreements as a way to encourage employees to govern their own actions. While it can be a risky move if the employee has goals that do not match with the company's mission, it can allow for a compromise between the two parties that will strengthen the working relationship.