Goal Setting involves setting specific, measurable and time targeted objectives. In an organizational or business context, it may be an effective tool for making progress by ensuring that participants are clearly aware of what is expected from them, if an objective is to be achieved. On a personal level, Goal setting is a process that allows people to specify then work towards their own objectives - most commonly with financial or career-based goals. Goal setting is a major component of Personal development literature.

The business technique of Management by objectives uses the principle of goal setting. In business, goal setting has the advantages of encouraging participants to put in substantial effort; and, because every member is aware of what is expected of him or her (high role perception), little room is left for inadequate effort going unnoticed.

To be most effective goals should be tangible, specific, realistic and have a time targeted for completion. There must be realistic plans to achieve the intended goal. For example, setting a goal to go to Mars on a shoe string budget is not a realistic goal while setting a goal to go to Hawaii as a backpacker is a possible goal with possible, realistic plans.