Business homework
Fattemahb
Chapter3.pptxChapter 3 – Organisational Collaboration Book
Goals Gone Wild The Systematic Side Effects of Overprescribing goal setting
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LY - Lebanon Branch - B325
Introduction
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:
A narrow focus that neglects non-goal areas,
Distorted risk preferences,
Rise in unethical behavior
Inhibited learning
Corrosion of organizational culture
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.
Please check examples on pp. 22 (Emblematic examples of goals gone wild – you can focus on Ford’s example)
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How Goals Go Wild
To be successful and have positive outcomes, goals need to be specific and challenging.
Specific and challenging goals motivate performance better than “do your best” slogan.
Specific and challenging goals provide clear, unambiguous, and objective means for evaluating employees performance
Specific goals focus people’s attention; lacking a specific goal, employee attention may be dispersed across too many possible objectives
Yet, and despite the fact that challenging and specific goals render positive outcomes, these same characteristics cause goals to go wild.
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When goals are too specific
Goals focus attention. Unfortunately, goals can focus attention so narrowly that people overlook other important feature of a task (example pp. 23).
Three situations: narrow goals, too many goals and inappropriate time horizons.
Narrow goals
With goals, people narrow their focus on the specific task required and hence outcome expected. Such intense 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). Consequently, 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
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 either grammar or content (specific goal), the result was not 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 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.
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When goals are too specific
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.
Example: In a stock selection task, participants are given both quality and quantity goals. When quantity and quality goals were both difficult, participants sacrificed quality to meet quantity Goals that are easier to achieve and measure (in that case quantity goals) may be given more attention than other goals (in that case quality goals).
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 managers to engage in myopic, short term behavior that harms the organization in the long run (for instance, 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.
Check example on pp. 25 (New York City cab drivers example).
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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: risk taking, unethical behaviour, and dissatisfaction and the psychological consequences of goal failure.
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)
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When goals are too challenging
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. 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.
Check other examples on pp. 26 (mount Everest disaster)
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LY - Lebanon Branch - B325
When goals are too challenging
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.
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When goals are too challenging
The interplay between goal setting and organizational culture is extremely important.
An ethical organizational culture can restrain in the harmful effects of goal setting.
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.
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.
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Summarizing
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
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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