[Traster]

In my experience (manager of teams 5-10 people) the purpose of the goals is to ensure that you're setting expectations between you and the company and holding you to what you agreed on in the first place. The key is that if you haven't agreed something up front, then when you come to review your performance there's a really high chance that you've focused on doing things that the company didn't want you to do or doesn't value.

Now, the most problematic issue with settings goals is timing. By tying your goals setting process to the financial year or to bonuses the result is that you have to set goals so far in advance you can't reasonably set them, and you're almost certainly going to review them at a point where it's unclear what the outcomes are. Which is why this is better done as a continuous process. Every month or so you should be looking at your goals saying "Is this still relevant", "what progress have I made towards this", and "What am I doing that is not captured by this goals". And by doign that and actually recording that throughout the year when it comes to annual review time you have relevant goals, you have clear record of progress towards them, and you aren't worried about things that are still in progress. Most importantly though - you play the recency bias lottery. In every company I've worked in a project delivered in the 3 months before review is worth 10x what a project delivered in the 3 months after review is worth, if you have written documentation throughout the year you can fight against this.