A Zielvereinbarung (target agreement) sets goals jointly between employer and employee, often tied to a variable pay component (bonus). It differs from a Zielvorgabe, where the employer sets the goals unilaterally at its reasonable discretion (§ 315 BGB). If goals are culpably not set in time, the employee can claim damages amounting to the lost bonus.
At a glance
- Zielvereinbarung: goals are agreed jointly. Zielvorgabe: the employer sets them unilaterally, but must exercise reasonable discretion (billiges Ermessen, § 315 BGB)
- Usually the basis for performance-related variable pay (Bonus)
- Goals must be fixed in time; once the period has ended they can no longer be set retroactively
- If the employer culpably fails to set goals in time, the employee can claim damages, usually the bonus that would have been achievable under fair goals (BAG 10 AZR 171/23)
- The bonus scheme itself is subject to works council co-determination (§ 87 BetrVG)
Zielvereinbarung or Zielvorgabe?
- Zielvereinbarung: both sides negotiate the goals together
- Zielvorgabe: the employer sets the goals unilaterally, at reasonable discretion and within the contractual framework
- Either way, the goals must be fixed early enough to still provide incentive and direction
FAQ
What happens if no goals were set by the end of the period?
Then achievement can no longer be measured. If the employer culpably missed setting them in time, it owes damages. The starting point is the bonus that would have been achievable under fair, realistic goals.
Can the employer set or change goals unilaterally?
With a Zielvorgabe, yes, but only at reasonable discretion and within the contractual framework. Unrealistic or arbitrary goals do not survive review by a court.
Do goals have to be „SMART“?
Not legally required, but advisable in practice: specific, measurable, achievable, relevant and time-bound. Clearly measurable goals reduce disputes over achievement and the size of the bonus.
Does the works council have to be involved?
For the design of bonus and pay schemes, yes. The individual target level is free of co-determination, but the underlying system is subject to it.
Last updated: August 2026
This article provides general information and is not a substitute for legal advice in individual cases.
