Goal-Setting Theory

Overview

People perform better when they are committed to achieving certain goals. Factors that ensure commitment to goals include:

• The importance of the expected outcomes of goal attainment
• Self-efficacy, or belief that the goal can be achieved
• Promises or engagements to others, which can strengthen level of commitment

Aim for the goal

Goal-setting is closely tied to performance. Those who set realistic but challenging goals are likely to perform better than those who do not.

Goal-setting is a key component of performance in a business setting, but certain principles apply. Goals that are difficult to achieve and specific tend to increase performance more than goals that are not. A goal can become more specific by attaching a quantity to it (for example, "increase productivity by 50 percent") or by defining certain tasks that must be completed.

Goals in Business (Motivation)

Managers cannot constantly drive motivation, or keep track of an employee's work on a continuous basis. Goals are therefore an important tool for managers, because goals have the ability to function as a self-regulatory mechanism that gives an employee a certain amount of guidance. Shalley, Locke, and Latham have identified four ways goal-setting can affect individual performance:

1. Goals focus attention toward goal-relevant activities and away from goal-irrelevant activities.
2. Goals serve as an energizer. Higher goals induce greater effort, while low goals induce lesser effort.
3. Goals affect persistence.
4. Goals activate cognitive knowledge and strategies that help employees cope with the situation at hand.

Locke et al. examined the behavioral effects of goal-setting, concluding that 90 percent of laboratory and field studies involving specific and challenging goals led to higher performance than those involving easy or no goals. While some managers believe it is sufficient to urge employees to "do their best," Locke and Latham have a contrasting view. They propose that people who are told to "do their best" generally do not. To elicit some specific form of behavior from another person requires giving the person a clear view of what is expected. A goal is therefore vital, as it helps an individual focus his or her efforts in a specific direction.

However, when management merely dictates goals, employee motivation to meet these goals is diminished. To increase motivation, employees should participate in the goal-setting process.

Goals and Feedback

Managers should track performance so that employees can see how effective they have been in attaining their goals. Without proper feedback channels, employees find it impossible to adapt or adjust their behavior. Goal-setting and feedback go hand-in-hand. Without feedback, goal-setting is unlikely to work.

Providing feedback on short-term objectives helps to sustain an employee's motivation and commitment to a goal. When giving feedback, managers should:

• Create a positive context
• Use constructive and positive language
• Focus on behaviors and strategies
• Tailor feedback to the needs of the individual worker
• Make feedback a two-way communication process