Goal Setting Theory

Goal Setting Theory

Goal setting is an important part of top management in an organization. It involves development of strategies to motivate employees and help attain long-term goals. Goal setting theory was first introduced in a study; “Goal Setting and Task Performance: 1969–1980” (Latham, Ganegoda, & Locke, 2011). The theory argued that the more specific a goal is the more likely the setter will achieve the Goal. Goals can be powerful and influential in a company, but are abstract and cannot be detected through empirical study and analysis, and only the end results of a goal is measurable. Lunenburg (2011) defines a goal as a specific target achieved through certain actions; it can be passing a test, breaking sports record, improving a company’s customer services, quitting an addiction or balancing a budget. Locke & Latham (2012) argue that goal setting theory was based on the premise that that much human action is purposeful, in that it is directed by conscious goal. The decision to set targets results from dissatisfaction in the performance of current goals, thus people will set goals in structures that direct their actions and behaviors to work towards achieving the goal. Locke & Latham (2012) in their research came up with certain conditions that make it possible to achieve goals that have been set. These conditions include: goal specificity, goal acceptance and commitment, goal difficulty, and feedback. These principles have been studied and extended by other researchers and scholars; this literature review seeks to discuss what other scholars have reviewed concerning the topic.

Goal Setting Theory

Goal setting theory is a motivation theory that explains the causes of people performance in work related tasks (DuBrin, 2012). It is common for organization to set goals that they want to achieve: Lunenburg (2012) states that Goals have a pervasive influence on employee behavior and performance in organizations and management practice; making it a step in organizational and personal performance. Goal setting theory provides an explanation for the other work motivation theory such as Bandura’s social cognitive theory, VIE theory, and Herzberg’s motivation theories thus has been accepted widely by managers as a means to improve and sustain performance. Nevertheless, organization’s today have a sort of goal setting operation be it high-performance work practices (HPWPs), management information systems (MIS), management by objectives (MBO), as well as strategic planning involve creating of specific goals (Dubrin, 2012). From the different studies and work motivational theories, the main finding on goal setting is that individuals who are given, specific, challenging but attainable goals perform better than those who are given easy nonspecific goals or no goals at all (Locke & Latham, 2012). At the same time, organizations and individuals must have the enough ability, accepted the goal, and received feedback on the performance. Goal setting theory provides the basis for motivation through the principles outlined and aligns to other motivation theories.

Locke & Latham, 2012, states the principles that a manager must have in order to motivate employees as: Clarity, commitment, challenge, feedback and task complexity. These principles once applied in goal setting increase employee motivation to work towards the goal. Goals that are clearly defined, achievable, and challenging result into better performance compared to ambiguous and unclear goals. Synnott (2017) defines Management by objectives as strategic plans to achieve the objectives of a firm by aligning the Goals of the organization and that of the firm so that everyone in the workplace is certain of what is expected of them. MBO requires that the employees accept the goals of the firm as part of their own personal goals (Synnott, 2017). Goal setting theory and MBO both motivate workers by having them participate in the goal-setting process.

Companies use goal setting theory to help their employees achieve short term and long term goals set; through incentives that motivate employees to work more efficiently. For example, sales and marketing managers are motivated through monetary incentives and free lunch by companies so that they can increase their sales. Employee satisfaction has become an integral part of performance improvement. A workplace where employees are not satisfied they are less motivated and will not be willing to commit to work. Rewards and gifts alike can be an important of employee motivation (Vance, 2013). Managers can work out a reward system for employees to increase their commitment to work. Motivation is a priority for organizations that want to make the best out of their employees. A study by Vance 2013, “The effects of reward type on employee goal setting, goal commitment, and performance” found that a reward system results to an increase in goal commitment but nor every individual in the workplace is motivated by cash rewards. This is similar to Victor vroom’s sentiments in valence and expectancy theory where he argues that individuals place a perceived valence on the outcomes they desire. Managers should consider implementing reward system that align with the goals attained and include variety of reward types. The availability of attractive rewards will translate to commitment and efforts by employees.

Companies are expected to have the appropriate goal setting since it provides motivation, focus, helps in performance measurability and employee cohesion. When a company sets a specific goal all the focus and attention of the employees should be on the goal and this should start from the top management (Bandura, 2013). This way the employees are motivated to work towards the goals as they are able to see the commitment by their seniors to the achievement of the firm’s goals. Lunenburg (2011) further states that goals have an influence on employee behavior and thus influences the long-term performance of the employees within an organization. If a firm sets challenging goals for employees given the abilities of their employees then employees will be motivated to perform better and thus the overall performance levels will increase. The challenges should be attainable and measurable in the end or the employees will not be motivated towards the goal suggested. Goal achievement process should be a learning oriented process rather than a performance oriented (Luneberg, 2011). As employees learn through the goal achievement process they tend to develop competence by mastering challenging situations on the other hand those who are performance goal oriented only want to get validation for competence through favorable judgments from their seniors (Latham, Ganegoda, & Locke, 2011). Today’s work environment requires that employees learn more and challenge themselves to achieve organizational goals since they are required to be creative, open and adaptive to new ideas and flexible.

Goal setting and achievement requires self-efficacy. Managers should be self-confident of them and understand the abilities of the employees they have at their disposal, by understanding the abilities of each employee. This will then translate into the manager knowing how to delegate roles to each employee and get work done effectively. Latham, et al, 2011, suggests that managers should use learning oriented tasks and performance evaluations, this helps them to understand the workplace capacity and make realistic goals. Employees gain sense of purpose and a drive to work effectively. On evaluation they are able to understand the output they can give towards realization of the firm’s goals, rather than the manager can be able to make realistic goals and challenging sets so as to improve performance in the workplace. Self-efficacy is setting personal goals and challenging oneself to achieve and learn more through realistic and attainable motivational framework (Bandura, 2013). It is important to distinguish between the ability of a person and how they perceive themselves to be, more often there is a difference between a person’s capacity and the desire thus resulting to self-efficacy (Bandura, 2013; Locke, 2012: Lunerberg, 2011). Goal setting theory encourages managers to set realistic goals that are in line with the abilities of the employees and provides the necessary resources so that a person is motivated to work while stimulating their sense of efficacy. Goal setting is a dual process, that is, the employee has to set their personal targets while the organization also sets a team goal so as to comprehensively attain growth at individual and organizational level and thus the emphasis on self-efficacy. However, these goals might conflict due to complexities in goal formulation, this can be countered by formulation of realistic goals or organizations framing the attainment of such complex goals to bring employee satisfaction and thus motivate them to be productive.

According to Latham (2012), the need to maintain competitive advantage against the competitors has resulted into firms going multinational. In effect meeting the quantitative and qualitative needs of the firm, leadership should be coupled with the right mix of motivational theories and tools to its staff. The right leadership transforms to the realization of performance targets as they set realistic goals and press forward with actions that aim at achieving these outcomes outperforming the competitors (Corker, & Donnellan, 2012). Leaders in a firm have to be forerunners in working towards the achievement of the companies’ goals; this will act as motivation to the juniors to keep working towards the goals (Latham, et al, 2011). There are several principals that make goals achievable, and increase the employee performance level through motivation; these are goal specificity, goal difficulty, goal commitment and feedback.

Principles of Goal Setting Theory

In setting effective goals there should be clarity, that is, a goal is supposed to be clear so as to be easy to achieve and defined timeline. A firm that intends to increase its sales has to budget for aggressive Marketing and product promotion. When the goal is unclear or expressed as general instructions, it cannot be measured nor evaluated. There is less motivation to act towards the goals since the end results are unclear. The goal setter might fail to know that the goal has been achieved. Clear goals will help the employees to understand the task at hand and act accordingly, by evaluating the results (Corker, & Donnellan, 2012). Goals have to be clear on how they will be achieved and state clearly desired outcome.

Goals have to be challenging to ensure that the organization and the employees are growing in the process of working towards achieving set objectives. Companies that are willing to raise stakes periodically for their employees often gain competitive advantage over time. Goals that are too easy to achieve or too difficult will affect the performance and satisfaction of employees (Dubrin, (2012), Latham, et al, (2011). The workplace should be an environment where each person is motivated to work more efficiently and add value. Goal setters should ensure that the goals are achievable. Goals have an influence on the performance of organization and in management. The first key to achievement of goals set is to build and improve the employee’s self-efficacy; challenging and attainable goals can help reinforce this. In their study “Students’ educational level and their goal choices, self-efficacy, motivation, and writing performance “, Azar &Vahidnia (2013), finds out that masters students were well motivated to take up challenging assignments compared to other students and as they took up the challenging ones the other students also were motivated to try out. The master’s students had high self-efficacy compared to the other students and this confidence and self-awareness is what motivated them to take up more challenging.

According to Luneburg , et al, (2011),Members of an organization perform well when they are given specific high-performance goal. Instructing employees to work harder, do their best or improve is has no effect on the end result as it is a target oriented goal, where employees are programmed to get to the target of the company regardless Specific goals on the other hand, encourage organization member to understand what they are working towards and allow them to evaluate their own performance separately from that of the firms. Latham, et al, 2011, argues that; Desirable organizational goals such as reducing low turnover, absenteeism and truancy, can easily be achieved when goals formulated are more specific. It is important that the manager narrows down the goals of the firm to more specific ones so that workers can work towards specific goals that are clearly defined.

Latham, et al, 2011 in the principles of goal setting theory suggests that Goals must be accepted. Every stakeholder in the firm has to accept the goals that have been set. According to DuBrin, (2012) Objectives that are being protested often are hard to achieve because not everyone is willing to work to its success: in addition, Latham, et al, 2011 says to ensure that a goal is accepted in the company is having the members participate in Goal setting process as it enhances commitments of the members to achievement of the goal. Bandura, (2013) suggests that Self-efficacy comes into play when the members are committed to the goal from the start. Goals should be a source of unity within a firm and incase a goal causes division among employees there is need for the seniors to review the goal for clarity. For a goal to be accepted and owned it has to be attainable, beneficial and the resources for its realization are available (Dubrin, 2012). Conflict in the work place slows down progress and wastes productive time; managers are encouraged to involve their employees in the goal setting process so that they are committed to the goals set regardless of how challenging they are since they set goals according to their abilities.

The whole organization should be committed to achievement of the goals set. Employees can be asked to set their individual goals and discuss as a team. Firms can collect common goals and then formulate aligning organizational goals (Badubi, 2017). Employers and employees have to be committed to using the resources needed to achieve the organizational goals and agree on the reward for achievement of the goals. Employees are committed to goals that they have accepted and agreed to be part. Goals can be set for groups of employees so that they work as a team towards its achievement; Lunenburg (2011) in his research concludes that group goals are as important as individual targets. In addition, combination of group goals and individual goals is more effective in improving the commitment of individuals to the goals of an organization.

Feedback and evaluation of the goal attainment is vital indicator of the organizational commitments to the set targets. Feedback helps organization members to attain their performance goals (Latham, et al, 2011). For starters, members are able to know how they are doing and how much effort they should increase in order to increase their output. Results to be evaluated can be through sales report, promotions, and increased company profits. Such feedback can be traced down to individual contributions so that each employee can evaluate their performance. Goals should be the line for performance evaluation, this way they are more effective (Luneburg, 2011). Employees know that they will be evaluated in terms of goal attainment, impact of goals increases, and then they will apply the necessary tools to see that the goals have been attained: CEOs of firms such as General motors, IBM, Microsoft corporation are evaluated when they meet profitability, quality and growth goals, since most understand this they apply management strategies that will see them achieve the set goals. Goals set should have deadlines of days to be achieved.

Implications of goal setting theory to Managers

Goal setting theory is a very important tool in organizational behavior. The goals set by a firm will influence the behaviors of the employees. Some goals can be challenging and difficult to achieve leaving employees demotivated or they can be difficult but attainable thus the employees are more motivated to work towards them. Locke proposed that the plan to work towards a goal is the major source of work motivation.

Goal setting theory is used in work places to set pace for work and as a motivation to get to work efficiently. Managers should be careful not to set ambiguous goals that the workers will not be able to work towards achieving. The goal setting theory provides good principles that if followed can result into the good performance in the workplace, employee satisfaction and motivation as well as the firm gaining competitive advantage (Badubi, 2017). In the end, employee efforts and performance in the organization will be influenced by the goals set or selected by the employees. Successful managers use the goal setting theory to improve performance, clarify expectations, and develop their employees further.

Employees will develop into better employees only if the manager approaches the goal setting and achieving process as a learning process and not a performance oriented process. Good managers often encourage their employees to do better and work more efficiently rather than finish work on time (Dubrin, 2012). Goals are supposed to be challenging it on the scope of the members in the organization. This way they are motivated to work and complete their tasks well. Emphasis is made on adding value to the organization by improving the quality of work through learning and challenging tasks.

Limitations of goal setting theory

While goal setting theory has been advocated for by researchers as the best theory for achieving organizational goals, the theory is limited by certain factors and at times setting goals can result to disastrous outcomes rather than the desired. When two different goals have been set together and a firm focuses more on one goal, it can be difficult to achieve the other goal; this can be fixed by prioritizing the two goals separately or finding a balance between the goals (Badubi, 2017). Instead of a firm having several goals together having one well thought plan will enable the firm to follow through the goal and achieve it. Too much attention on the goal can be also narrow the scope of the managers as they may end up unintentionally ignore other responsibilities (Dubrin, 2012).

Goal setting theory encourages managers to ensure that the goals set are accepted by the organization (Vance, 2013). It is the responsibility of managers to set goals, but they are expected to have the employees commit to the goals, this is easily done through participation or teamwork. Improper management techniques and inequity in the workplace can subvert the effectiveness of goal setting theory (Locke & Latham, 2012). Goals have to be realistic and to the scope of the employees available so they are motivated to work towards the achievement of the goals.

In conclusion, goal setting theory is very important for firms, the theory outlines five principles that if followed when setting the goals for a firm the firm will gain competitive advantage since the organization members are motivated to perform their roles well. These principles include are goal specificity, goal difficulty, goal commitment and feedback. Application of goal setting theories has been a topic of research and discussion among scholars, this theory is important in organizational behavior and management as it helps managers to understand how to ensure that their firms is on top of competition.