Abstract Goal setting is the key to achieving success in any endeavor. It is very complex to know where you are going if you don't know where to go. Everyone needs goals to get excited, grow or increase performance especially with strong goals. Setting goals, for example, helps employees know where they need to go and how they should proceed to get there. It also helps employees manage themselves. Employees should set goals that are SMART: specific, measurable, achievable, realistic and timely. Goals represent expectations and if employees have higher expectations, then employees will improve performance as long as employees achieve their goals. In most cases, what employees need is motivation, meaning and purpose in their work and if employees set worthwhile goals, they will find life, but work more specifically, more fulfilling and exciting. Once there is a goal, there is a purpose and achieving that purpose increases performance as one realizes one has achieved success. REWARD VS. RECOGNITION While companies try to get more from their employees, employees also try to get more from them. Through employee reward and recognition programs, employers can motivate employees to change key work habits and behaviors to increase company profits. Employee reward system refers to programs set up by companies to reward performance and motivate employees at a group or individual level. They tend to be separate from the employee's salary but are some form of monetary reward. Previously reward systems were considered the domain of large corporations and businesses, but now even small businesses offer them to attract the best employees in a competitive job market or simply to increase employee work performance. Although often combined with employee recognition programs, reward programs serve a slightly different purpose. Recognition programs don't tend to be monetary in nature, even if they cost the company. According to Sue Glasscock and Kimberly Gram in Productivity Today, recognition elicits a psychological benefit while reward elicits a financial benefit. The difference is important because many small businesses and corporations can use recognition programs to motivate employees while keeping costs low. MERIT VS. PERFORMANCE REWARDS Financial rewards awarded on a regular basis include bonuses, profit sharing, etc. and are tied to an employee's performance and are distanced from salary. The reward does not emphasize competence but rather excellence or success. They are separate from merit pay increases because they are usually an inflation-adjusted increase with some additional percentages for skilled employees.