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In this tutorial by Phil Dever, he guides supervisors on how to handle employee goal setting. Once an employee sets their individual goals using a workflow, it is routed to the supervisor for review and approval. The supervisor receives an email notification and can access the workflow by selecting it from the new workflows section. The supervisor can see the goals submitted by the employee and has the ability to edit, delete, or add additional goals as needed. This process ensures effective communication and alignment between supervisors and employees in goal setting.