Your "expectations" are your ideas about how good or bad something is supposed to be. We use the phrase "set one's expectations" to describe choosing or deciding what your expectations will be:
If you set your expectations low, you won't be disappointed.
You can also use the phrase "set expectations" to describe communicating your expectations to other people, like your employees or your children:
I've always tried to set high expectations for my children and encourage them to pursue their dreams.
As a manager, you're the one responsible for setting your staff's expectations.