Goal-Setting Theory Essay Example

as number one in importance among other seventy three management theories (Smith and Hitt. 2005). Goal-setting theory (Locke & Latham. 2002) was build inductively over a 35- year period in the industrial and organizational psychology based on 400 laboratory and field studies.This theory is based on Ryan’s thesis in 1970 where conscious goals affect action (Locke and Latham. 2002) therefore Locke and Latham began investigating about the possible impact of goals on individual performance. This theory has high level of validity and it is effective for individuals, groups and organizations (Locke and Latham. 2006). According to Locke (1978) this theory is “recognized explicitly or implicitly by virtually every major theory of work motivation”. Scientific Management” and “Management by Objectives” (MBO) theories has absolutely recognized the significance of goal-setting in theory and practice.

At first, goal-setting was denied in “Valence- Instrumentality- Expectancy” (VIE) and “Human Relations” theories but was later acknowledged. Lastly, goal-setting theory has been persistently refused in “Organizational Behaviour Modification” (OB Mod) and “Job Enrichment” theories because they do not agree with it theoretically but has implicitly acknowledge it in practice. (Locke. 978) Based on many meta-analyses of goal setting research, researchers such as Mento, Steel and Karren (1987), Tubbs (1986) and Locke, Shaw, Saari and Latham (1981) came to an agreement that difficult to achieve, specific and challenging goals improves performance rather than easy or unclear goals such as “do your best”.

For example, an employee will feel more challenged and put in more effort when his manager requires him to sell 100units of computers in one month rather than having his boss only urging him to do his best.Based on other relevant literature about goal

setting, McShane and Travaglione (2007) defined goal setting as the “process of motivating employees and clarifying their role perceptions by establishing performance objectives”. Similarly to Locke and Latham’s goal-setting theory, for both McShane and Travaglione goal setting has the potential to enhance and refine employee performance in two ways. They are by “stretching the intensity and persistence of effort” and by giving clear and not vague role perceptions to employees so that the effort is “channeled towards behaviours that will improve work performance” (McShane and Travaglione. 007) As stated by Locke and Latha, there are four mediators or mechanisms of goals that can affect performance.

The first one is that there is “focus of attention on the desired end state to the exclusion of other goals” (Smith and Hitt. 2005). This means that goals can limit and direct employee’s attention, effort and action to only goal-relevant activities and not interrupted by unwanted and irrelevant ones. For instance, if one’s goal is to get a high distinction grade in Mathematics, one will focus and dedicate all his or her effort and attention to studying math and not play the Playstation.

One will think twice to play and not concentrate on studies. The second mediator is the investment of effort and energy in goal-relevant activities (Locke and Latham 2002). High and difficult goals lead to more effort than easy or vague ones. For example, if one has a goal of finishing an essay in 2 days time, he or she is likely to put more effort by working harder and faster in order to finish the essay before the due date. Next, without skills and task knowledge, a goal

cannot be achieved because performance needs both motivation and ability (Locke and Latham 2006).One cannot achieve a desired goal unless one has the ability and knowledge of it.

In 1990, Wood and Locke suggest that goals affect action indirectly by motivating the person to discover and use task-relevant knowledge (Locke and Latham. 2002). Whereas according to Latham and Locke (2006), goals may motivate a person to use his or her existing ability, may motivate people to acquire new knowledge especially when they are confronted with new tasks and may naturally “pull stored task-relevant knowledge into awareness”.The fourth and last mediator is the “persistence of effort through time until the goal is attained” even though there are obstacles (Smith and Hitt. 2005). Goals affect and influence persistence.

According to LaPorte and Nath, hard goals stretches effort when people are allowed to control their time spent on tasks (Locke and Latham. 2002). For instance, tight deadlines results to a more rapid work pace than loose ones. According to Latham and Locke (2006), there are 4 key moderators to ensure the effectiveness of goal-setting theory.The first moderator is feedback. McShane and Travaglione (2007) define feedback as “any information that people receive about the consequences of their behaviour”.

People need feedback to track their progress because they need to know how they are doing so far, like have they achieved the goals or are they in the right track, so that they can modify the methods or strategies to match what the goals requires and adjust the level of their effort to improve their performance (Latham and Locke. 006, Smith and Hitt. 2005, Latham and Locke. 2002, Lee et al. For instance, if

a student has a goal of getting a high distinction grade in studies, he or she needs a feedback from the teacher in order to know whether he or she is on target and which part needs improvement. In 1983, Matsui, Okada and Inoshita found that people would increase their effort or try a new strategy after knowing they are below target (Lee et al. 1991, Locke and Latham. 2002).

Many researchers such as Bandura, Cervone, Becker, Erez and Strang et al agrees that feedback is an essential moderator of effective goal setting because the combination of goals and feedback is more effective than goals alone (Locke and Latham 2002, Lee et al. 1991). Feedback is so fundamental for the success of goal setting that McShane and Travaglione (2007) discussed in detail the five characteristics of an effective feedback. They say that an effective feedback should be credible, specific, relevant, timely (in the sense that feedback should be given as soon as possible after a result) and sufficiently frequent.Secondly, as stated by Seijts and Latham’s work in year 2000, people must have a goal commitment in order for goals and performance to be effective (Smith and Hitt.2005). In 1999, Kelin, Wesson, Hollenbeck and Alge find goal commitment primarily important and relevant when goals are difficult because difficult goals, compared to easy ones, requires great amount of effort and have lower chances of succeeding which is why people need to commit to it (Locke and Latham. 2002) because if they lack the commitment they will not be motivated to attain the goal (McShane and Travaglione. 2007).

Goal commitment can be enhanced by two factors, one must view and

believe that the goal is significant and important and they must have confidence and believe that they can achieve the desired goals (Smith and Hitt. 2005, Locke and Latham. 2002, Skinner and Roche. 2003, Locke and Latham. This is also known as self-efficacy. The third moderator is task complexity. Meta-analyses have been conducted and the result is that goal setting is more effective with simple and direct tasks rather than complex tasks because it is harder to acquire task knowledge for tasks that are complex (Locke and Latham. 002, Smith and Hitt.

Setting difficult and specific goals for complex tasks can interfere with employee’s performance because it encourages them to focus on the outcome rather than the effective methods to achieve the goal (Skinner and Roche. 2003). And some people may not do the tasks well even though they have high goals because they lack the needed task knowledge (Smith and Hitt. 2005). Fourth, situational constraints can adversely affect goal attainment (Smith and Hitt. 2005). Brown, Jones and Leigh found that goal setting is effective only when role overload was low (Locke and Smith. 006). Role overload is when there is excess of work but is lacking of the essential resources to accomplish the tasks. Goal participation is sometimes considered effective in goal setting by McShane and Travaglione (2007). Latham along with Yuki, Mitchell and Dossett found that subordinates who were allowed to participate in decision making and setting goals have higher performance and set higher goals, compared to subordinates who were assigned by supervisors (Locke and Latham. 2002) and higher goals mean higher performance.

Goal setting can also be said as an object to achieve or an outcome to

be set as a standard for judging one’s satisfaction (Smith and Hitt. 2005, Locke and Latham. 2002). High and challenging goals, as compared to low or easy goals, are motivating since people are required to attain or achieve more so that they are satisfied (Locke and Latham. 2006, Smith and Hitt. When people know that they can meet job challenges and grow by going after and achieving important and meaningful goals, they get a feeling of success and satisfaction in the work place (Locke and Latham. 006). In other words, people will want to pursue more and work harder in order to get a feeling of satisfaction from his or her accomplishments. However, there are several limitations of goal-setting theory.

The first problem is when the manager’s goal is not in coordination with the organization’s goals. Without coordinating and aligning the goals of an individual with the organization, poor performance will be the result because conflicts may arise. (Locke and Latham. 002) Another problem that may arise is when employers combine monetary incentive with goals (Latham and Locke. 2002, McShane and Travaglione. 2007).

This can encourage subordinates to set up easy goals rather than hard and challenging ones just to get the incentives and according to Barsky (2007) there is a link between goals with monetary incentives and unethical behavior in the workplace. His reasons are incentives may increase the desire and motivation to attain the goals thus employees will want to accomplish the goals at any cost unethically.Next, as mentioned earlier, setting difficult goals for complex tasks is ineffective as it interrupts with the learning process of the task (McShane and Travaglione. 2007, Locke and Latham.

Lastly,

employees tend to ignore job performances that are difficult to measure as they focuses on “a narrow subset of measurable performance indicators” (McShane and Travaglione. 2007). Is goal setting effective? Although there are several limitations or disadvantages to goal-setting theory, this theory is still considered an effective, useful tool and is widely used and acknowledged.As mentioned earlier, this theory has been rated as number one among other organizational behaviour theories. It is also regarded as “one of the most efficacious and sound in organizational sciences” (Rauch.

According to Russel and Curtis, this theory has received many support and Robbins stated that it provides “one of the more powerful explanation of motivation” (Rauch. 2006). Setting difficult, specific and challenging goals is not only effective for business wise but a variety of performance (Locke, Shaw, Saari, & Latham, 1981, Mento, Steel, & Karren, 1987).

In 1983, Katzell and Guzzo regarded this theory as important for the improvement of employee productivity, for the improvement of students’ academic results by Schunk (1991), in the rehabilitation of injured athletes and for the improvement of task performance in groups (Rauch 2006). The positive effect of goal setting to performance and motivation is supported by strong evidence in the literature of Organizational Psychology. Goal setting is considered effective because it increases effort and direct the effort towards goal relevant activities thus increases performance and productivity.There will be a positive relationship between the setting of difficult goals and task performance as long as the subordinates is committed to the goal, has the needed task knowledge and ability to attain it and don’t have conflicting goals. Furthermore, goals refer to future valued outcomes therefore goal setting

is the very first thing people will do. Setting goals implies that people are dissatisfied with their condition which is why they want to obtain the desired object or outcome to get the feeling of satisfaction and sense of accomplishments.

There are numerous cases where goal setting improves employee productivity.Loggers are found to cut more trees and unionized truck drivers increased 30% of logs to be loaded in their car as a result goal setting. The truck drivers saved $250,000 in 9 months for the company (Locke and Latham. 2002). In 1994, Terpstra and Rozell found a significant connection between goal setting and the profitability of organizations from Dun’s Business Rankings company surveys (Locke and Latham. 2002, Terpstra and Rozell.

Engineers and scientist who set goals had higher performance compared to those who were just urged to do their best (Lacke and Latham. 2002).There was a high rate of performance and satisfaction when telecommunication employees set specific high goals (Locke and Latham. 2002).

Big companies such as Microsoft, General Electric and Goldman Sachs adopted the goal setting theory and it results in a satisfying outcome and performance (Kerr and Landauer. 2004, Shaw. 2004). In conclusion, the core finding or concept of goal setting theory is that setting specific and hard goals improves performance and productivity. The mediators of goal setting are the direct of attention and effort to goal-relevant tasks, skills and task knowledge and persistence of effort.