B325 Chapters 1 3

Chapter 3
 To improve/boost the performance and powerfully drive behavior, we need to set

specific and challenging goals.
 “So long as a person is committed to the goal, has the requisite ability to attain
it, and does not have conflicting goals, there is a positive, linear relationship
between goal difficulty and task performance”
 Yet, goals outcomes are not always positive. Some negative side effects are
associated with goal setting such as:
o A narrow focus that neglects non-goal areas,

o Distorted risk preferences,
o Rise in unethical behavior
o Inhibited learning
o Corrosion of organizational culture
o Reduced intrinsic motivation
 Consequently, goal setting needs to be regarded as a prescription-strength

medication that requires careful dosing, consideration of harmful side effects, and
close supervision.
 As such, goal setting has been promoted as an answer to improve employee

motivation and performance in organization.
How Goals Go Wild??
When goals are too specific
Unfortunately, goals can focus attention so narrowly that people overlook other important
feature of a task. For example: Simons and Chabris’ researchers asked participants to
watch a video in which two groups of players pass basketballs. One group wears white
shirts; the other group wears dark shirts.
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By: Sara HilalAlkhaldy_ based on previous exams & book
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As result of this narrow focus, most participants fail to notice when a man wearing a
black gorilla suit walks into middle of the screen, pounds his chest and walks off screen
and concentration on the counting task.
Three situations (types): -
1) Narrow goals: when people narrow their focus on the specific task required and
hence outcome expected. Such focus will “blind” people from other important
issues that appear to them unrelated to the goal.
• Tendency to focus too narrowly on goals is compounded when managers plan the
wrong course by setting the wrong goal (e.g. setting revenue instead of profit goals).
So, setting the correct/appropriate goal is a difficult process
• Goal setting may cause people to ignore important dimensions of performance that
are not specified by the goal-setting system. For example: a group of students are
requested to proof read a paragraph that contains both grammatical and content
errors. When students were given instruction to correct grammar or content (specific
goal), the result wasn’t that satisfying.
Many grammar or content errors were not corrected given that the focus was not general
but specific (either on grammar or on content) Yet, when students were requested to
correct the paragraph as a whole with no specific indications (do your best), students
were more likely to correct both grammatical and content errors. So when no specific
goal is set, people will look at the general image which might give better results.
• When managers set specific goals, they often fail to determine the broader results of
their directives. The presence of goals might lead employees to focus on short-term
gains and lose sight of potential devastating long-term effects on the organization.
2) Too many goals: when multiple goals are pursued at one time, this might cause
problem for employees. Employees tend in that case to focus only on one goal.
Some types of goals are more likely to be ignored than others.
For example:researchers gave participants both quality and quantity goals. When
quantity and quality goals were both difficult, participants sacrificed quality to meet
the quantity goalsGoals are easier to achieve and measure (such as quantity) may
be given more attention than other goals (such as quality)
3) Inappropriate time horizon: even if goals are set correctly, time horizon to
achieve them may be inappropriate.
Goals that emphasize immediate performance (e.g. this quarter’s profits) prompt
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managers to engage in myopic, short term behavior that harms the organization in
the long run (for instant: companies that issued quarterly earnings reports
frequently (short term goal) tended to invest less in research and development
(long term goal))
 The efforts to meet short-term targets occurred at the expenses of long-term

growth.For example :New York City cab drivers; Cabs start to disappearing more
quickly on rainy days than on sunny days , because of specific daily goal most cabs
driver set. The time horizon problem is demonstrated as “post-pellet pause” means
inactivity once a goal is achieved people relax and rest. For examples, a salesperson after
meeting monthly sales quota, may spend the rest of month playing golf rather than
working.
When goals are too challenging

• It has been demonstrated that a positive linear relationship exists between the
difficulty of the goal and the employee performance. As such, to inspire effort,
commitment, and performance, goal should be at the most challenging level possible
but should not be so challenging that employees see no point in trying.
• Nevertheless, stretch/challenging goals can have serious side effects from shifting risk
attitudes to promoting unethical behavior to triggering the psychological costs of goal
failure.
Three situations (types): -
1) Risk taking:
• Goal setting distorts risk preferences. People motivated by specific, challenging goals
adopt riskier strategies (reference the assumption that high risk = better performance
and higher profits) than those with less challenging goals or vague goals.
• Goals harm negotiation performance by increasing risky behavior. Negotiators with

goals are more likely to fail to reach a profitable agreement than are negotiators who
lack goals.
• The excessive focus on goals might hence lead to risk-taking behavior (cause of many
real world disasters)Example: Continental bank in the U.S. was one of the most
important banks. The bank set a new goal, and that is to increase within five years the
magnitude of the bank’s lending ability.
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To achieve this objective, the bank changed its strategy, bought loans from smaller bank
and pursued borrowers. It could have been the seventh-largest U.S. bank if its borrowers
had been able to repay their loans; instead, following massive loan defaults, the
government had to bail out the bank.
2) Unethical behavior: -
 Goal setting is seen as a powerful motivation tool yet; it can lead and promote
unethical behavior.
 Goal setting can promote two different types of cheating behavior (unethical
behavior):
 When motivated by a goal, people may choose to use unethical methods to reach
it. Example: at sears, and in order to reach the specific, challenging goal set by
the administration, employees charged customers for unnecessary repairs.
 Goal setting can motivate people to report that they have met the goal when in
fact they fell short. Example: employees from a certain organization who were
driven to reach sales target reported sales that never took place.
 Goal setting is not the only cause of employee unethical behavior. It is an important
ingredient but other aspects interfere as well:
 Lax oversight
 Financial incentives for meeting performance targets
 Organizational culture with a week commitment to ethics.
 The interplay between goal setting and organizational culture is extremely important.
 An ethical organizational culture can restrain in the harmful effects of goal
setting, but at the same time, the use of goals can influence organizational culture.
 Given that small decisions within an organization can have broad implications for
organizational culture, the aggressive goal setting within an organization increases
the likelihood of creating an organizational climate ripe for unethical behavior.
 Goal setting might motivate unethical behavior.
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3) Dissatisfaction and the psychological consequences of goal failure: -
 When problem embedded in stretch goals is the possibility that the goal may not be
reached which will lead to satisfaction. Decrease in satisfaction will influence how
people view themselves and have important consequences for future behavior.
Consequently, perceptions of self-efficacy are a key predictor of task engagement,
commitment and effort.
 In other words, one needs to believe in his/her personal ability and overall
intelligence as to be able to reach the goal.
Goals, Learning and Cooperation
o Organizations need employees able to learn and collaborate with colleagues.

o Goals inhibit (slow down) learning:
o When individuals face complex task, specific and challenging goals may
restrain learning from experience and decrease performance. The narrow
focus of specific goals can inspire performance but prevent learning.
o “Learning goals” are hence recommended to be used in complex situations

rather than “performance goals”. Yet, sometimes it is difficult to do that
given that managers may have trouble determining when a task is complex
enough to warrant a learning rather than a performance goal.
o Goals create culture of competition:

o Organizations that rely heavily on goal setting may erode the foundation
of cooperation that holds groups together.
o Being too focused on achieving a specific goal may decrease extra-role

behavior, such as helping coworkers.
o Goals may promote competition rather than cooperation and ultimately

lower overall performance.
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When goals harm motivation
o A goal setting increase extrinsic motivation, yet, it can harm intrinsic

motivation.
o This is an important issue, given that managers may overvalue and
overuse goals.
o By setting goals, employees might be more interested in extrinsic
motivation (such as bonuses, rewards, etc.) and not in the intrinsic value of
the job itself (i.e. they are not motivated nor committed).
That is why:
o Goal setting can be a challenging task, especially in new settings.
o Goal setting can become problematic when the same goal is applied to
many different people.
The goal will be too easy for some and too difficult for others. Tailoring
goals to each individual can lead to charges of unfairness.
The latter has important implications, because employee perceptions of

whether rewards fairly match effort and performance can be one of the
best predictors of commitment and motivation.
o Perverse incentives can also make goal setting politically and practically
problematic.
In the real world, managers tend to manage expectations rather than maximize
earnings. They set a combination of goals that appears rational but is in fact not
constructive.
Goals can have both positive and negative outcomes
◦ Positive outcomes:
 Inspire employees
 Improve performance
◦ Negative outcomes
 Narrow focus
 Motivate risk-taking
 Lure people into unethical behavior
 Reduce learning
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 Increase competition
 Decrease intrinsic motivation
In Order to Prevent Negative Outcomes, Managers Need
◦ To consider the complex interplay between goal setting and organizational

contexts as well as the need for safeguards and monitoring.
◦ To avoid setting goals that increase employee stress
◦ To refrain from punishing failure
◦ To provide the tools employees need to meet ambitious goals
◦ To think carefully about whether goals are necessary and if so about how
to implement a goal-setting system.
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Chapter 3

 To improve/boost the performance and powerfully drive behavior, we need to set

o A narrow focus that neglects non-goal areas,

 Consequently, goal setting needs to be regarded as a prescription-strength

 As such, goal setting has been promoted as an answer to improve employee

How Goals Go Wild??

When goals are too specific

Three situations (types): -

 The efforts to meet short-term targets occurred at the expenses of long-term

When goals are too challenging

Three situations (types): -

• Goals harm negotiation performance by increasing risky behavior. Negotiators with

 Goal setting might motivate unethical behavior.

Goals, Learning and Cooperation

o Organizations need employees able to learn and collaborate with colleagues.

o “Learning goals” are hence recommended to be used in complex situations

o Goals create culture of competition:

o Being too focused on achieving a specific goal may decrease extra-role

o Goals may promote competition rather than cooperation and ultimately

o A goal setting increase extrinsic motivation, yet, it can harm intrinsic

o Goal setting can be a challenging task, especially in new settings.

The latter has important implications, because employee perceptions of

Goals can have both positive and negative outcomes

In Order to Prevent Negative Outcomes, Managers Need

◦ To consider the complex interplay between goal setting and organizational

◦ To avoid setting goals that increase employee stress

◦ To refrain from punishing failure

◦ To provide the tools employees need to meet ambitious goals

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