Goal-Setting Theory

An employee’s performance is a function of ability as well as motivation. Ability refers to a person’s knowledge and skill. Knowledge and skill alone do not lead to action. Motivation is the choice to exert effort and to persist, drawing on knowledge and skill, until a desired goal is attained. A typology for understanding motivation includes a person’s needs, values, goals, affect, and performance.

Needs are physiological as well as psychological. They affect a person’s survival and well-being. Hence, they explain why people take action. Examples of an individual’s needs are food, sleep, pleasure, and self-esteem. Thus needs explain why certain broad categories of behavior are universal, but they do not take into account individual differences in the actions people take to satisfy their needs. These differences are reflected in a person’s values.

Values refer to a broad tendency to prefer certain states of affairs over others, what the person considers good, desirable, or beneficial. Values reflect beliefs about what is important. For example, some people place far greater value on individualism than collectivism, or low power distance in the workplace than high power distance between leaders and workers. Needs affect action through their effect on values, and values affect a person’s behavior through their effect on the person’s goals. Goals define for the individual or group what constitutes an acceptable level of performance or direction of action. Thus goal setting has a positive effect on increasing a person’s interest in a task in that it provides people with a sense of purpose. Goals engage people’s values by challenging them to see how well they can do. Engaging values ensures goal commitment.

Edwin A. Locke and Gary P. Latham’s goal-setting theory states that goals are the immediate precursors and regulators of much, if not most human behavior. The theory does not imply that a person must always be fully consciously aware of a goal for it to regulate behavior. But it does state that given that there is commitment to a goal, it remains in the periphery of consciousness as a reference point for guiding and giving meaning to subsequent psychological and physiological actions that lead to goal attainment.

Goals have two main attributes: content and intensity. Goal content is the object or result that is sought. It can vary quantitatively in that a person may have few or many goals. People can have short-term proximal goals in addition to a long-term distal goal, and their goals may be easy or difficult. Goals may also vary in specificity from a vague and abstract one, such as do your best, to a specific one, such as to decrease costs by 20% within the next 12 months. Goals may also vary in type from a focus on a performance outcome to learning or discovering a specific number of processes or to those that are behavioral in nature.

Goal intensity refers to the determinants and effects of goal commitment on performance as well as the place of a given goal in a person’s goal hierarchy. Goal content and intensity can be related. An intense psychological process might be involved in setting a clear, specific goal rather than a vague goal in a situation where a great deal of information has to be analyzed and integrated before a goal can be clearly formulated. Hence, setting a specific performance goal in this instance would be more intense than adopting a vague goal.

A core finding of more than 1,000 studies on goal setting is that higher goals lead to greater effort and persistence than easy goals, given that the person is committed to attaining them. With regard to affect, higher goals make self-satisfaction more contingent on a higher level of performance than easy goals. Moreover, high goals are usually seen as more instrumental in attaining valued outcomes than easier goals. People typically view their actions that fall short of their desired goal as unsatisfactory. When a person’s self-efficacy—namely, task-specific self-confidence— is high, a negative self-evaluation usually leads to subsequent actions to eliminate the source of dissatisfaction, such as finding ways of improving subsequent performance. Action that leads to meeting or exceeding a goal results in positive appraisals. However, if a positive appraisal is followed by anticipation that attaining the same performance level again leads to a neutral or negative self-appraisal, the person is likely to set an even higher goal. In short, goals are the value standard by which people appraise their performance.

A second core finding of goal-setting theory is that goals that are specific and difficult lead to a higher level of performance than vague, abstract goals such as to do your best, even though the latter exhortation implies a high level of motivation. This is because the ambiguity inherent in an abstract goal allows people to give themselves the benefit of the doubt in evaluating their performance. Hence, a wide range of performance levels may be interpreted as aligned with the desire to do one’s best. In contrast, a specific high goal makes explicit what constitutes an acceptable outcome.

These two core findings are seen in a wide spectrum of employees including loggers, factory workers, production and marketing personnel, engineers, scientists, and college professors. These findings have been obtained in Australia, Canada, the Caribbean, Germany, Israel, Japan, and the United States. The performance characteristics studied include quantity and quality of work, production efficiency, time spent on task, profits, costs, job behavior, performance appraisal ratings, and survey returns. These findings apply to groups in addition to the individual.

Three motivational mechanisms explain how goals affect performance, namely, choice, effort, and persistence. A fourth mechanism is cognitive, namely, the discovery of appropriate strategies. With regard to choice, clear specific goals have two directional effects that are relatively automatic. First, they point a person toward goal-relevant activities and materials, and away from goal-irrelevant ones. Second, they activate stored knowledge and skills that an individual possesses that are perceived as relevant to the task.

Once the choice has been made, goals energize performance by motivating people to exert effort in line with the difficulty or demands of the goal. Holding a person’s ability constant, scores of studies have shown that rate of performance is a linear function of goal difficulty. That is, given goal commitment, the higher the goal, the higher the performance.

Persistence is ongoing effort, typically assessed in the form of duration of time spent on an activity. High goals increase the probability that a person will continue to work for a longer period of time than is the case with a vague or easy goal.

These three mechanisms, choice, effort, and persistence, operate automatically once the person commits to a goal. When people have yet to acquire the knowledge or skill necessary to attain a specific high goal, a learning rather than a performance goal should be set. This is especially so on tasks for which minimal prior learning or performance routines exist, where strategies that were once effective suddenly cease to be so. If this is not done, setting a specific high-performance goal can actually lead to lower performance than urging people to do their best. This is because people feel pressure to perform well immediately before taking the time to explore systematically optimal ways to perform the task.

The primary distinction between a performance and a learning goal is framing the instructions. The instructions respectively associated with the two types of goal invoke two different domains, namely, motivation and ability. With a performance goal, as the name implies, the goal is framed so that the focus is on the result. A search for information to attain the goal is neither mentioned nor implied because ability is a given. Performing effectively requires only the choice to exert effort and persist until the goal is attained. Similarly, with a learning goal, as the name implies, the goal is framed so that people focus on knowledge or skill acquisition—the search for and implementation of effective strategies. Thus a learning goal draws attention away from the end result. The focus instead is on discovering an appropriate process. Learning goals are particularly relevant in fast-changing organizational environments and industries that are prone to abrupt changes, and in which strategies once effective can quickly become obsolete. Relative to performance goals, they increase the probability that appropriate strategies will be discovered for mastering a task. In such instances, commitment to a learning goal has been found to be higher than for a performance goal. This is a result of goal intensity, namely the amount of thought or mental effort that goes into formulating a plan of action required of the former relative to the latter. Research is now needed to study under what conditions learning goals lead to learning, that is, the discovery of appropriate strategies or processes.

Behavioral goals, set based on a systematic job analysis, can obviate the need for a learning goal even though the task is complex for people. Behavioral goals are appropriate in relatively stable environments where the appropriate course of action is already known, and where end result variables are not easily measured for each individual, or the latter are affected by factors beyond the person’s ability to control.

Among the ways to foster goal commitment is to have goals assigned by an authority figure, make the goals public, and increase the person’s self-efficacy. Assigned goals lead to commitment because listening to the assignment without objection is itself a form of consent, and assigning the goal implies the person is capable of attaining it. This is particularly true when the person who assigns the goal is perceived as supportive and trustworthy. Making a goal public makes attainment an issue of integrity and thus binds a person more strongly to it than committing to it privately. This is because few people want to be subsequently seen by others as failures or hypocrites. Self-efficacy is people’s judgment of how well they can execute courses of action required to deal with prospective situations. People with high self-efficacy set and commit to high goals. Obstacles and hurdles to overcome are viewed as challenges and sources of excitement. People with low self-efficacy view the same obstacles and hurdles as concrete reasons for abandoning a goal.

Goal commitment can also be fostered by monetary incentives. There has been little research to date on optimal ways to design incentive plans to motivate people to try for high goals, and yet not become demotivated by getting close to the goal but not attaining it. Large incentives may also tempt some people to find ways to cheat.

Goal setting is effective regardless of whether the goal is self-set, participatively set, or assigned. Self-set goals are the core of self-management. Participatively set goals on tasks that are straightforward for people have sometimes been found to lead to higher goals than is the case when the goal is assigned by a supervisor. As noted earlier, the higher the goal, the higher the performance. Performance is equally high, as is commitment to the goal, when the assigned goal is as difficult as the one set participatively, the logic or rationale for the assigned goal is provided, and confidence is expressed in the employee’s ability to attain it. On tasks that are complex for people, participatively set goals are preferable only to the extent that through discussion they lead to the discovery of better task strategies and an increase in self-efficacy regarding the application of these strategies.

Goals have an anticipatory, feed-forward effect by energizing action at the beginning of a work period. Regardless of the method used for setting a goal, feedback in relation to goal attainment is nevertheless critical. Feedback allows people to adjust their effort, persistence, and strategy with this information. One way to conceive of the relation between goals and feedback is as follows: Feedback tells people what is; goals tell them what is desirable. Feedback involves information; goals involve evaluation. Goals inform people as to what type or level of performance is to be attained so that they can direct and evaluate their actions and efforts accordingly. Feedback allows them to set reasonable goals and to track their performance in relation to their goals, so that adjustments in effort, direction, and strategy can be made as needed. To correct an old but not completely accurate axiom in organizational psychology, That which gets measured in relation to goals is done.


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  7. Seijts, G. H., & Latham, G. P. (2005). Learning versus performance goals: When should each be used? Academy of Management Executive, 19, 124-131.

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