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Goals Gone Wild: The Systematic Side Effects of Overprescribing Goal Setting

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Abstract

Executive Overview: Goal setting is one of the most replicated and influential paradigms in the management literature. Hundreds of studies conducted in numerous countries and contexts have consistently demonstrated that setting specific, challenging goals can powerfully drive behavior and boost performance. Advocates of goal setting have had a substantial impact on research, management education, and management practice. In this article, we argue that the beneficial effects of goal setting have been overstated and that systematic harm caused by goal setting has been largely ignored. We identify specific side effects associated with goal setting, including a narrow focus that neglects nongoal areas, distorted risk preferences, a rise in unethical behavior, inhibited learning, corrosion of organizational culture, and reduced intrinsic motivation. Rather than dispensing goal setting as a benign, over-the-counter treatment for motivation, managers and scholars need to conceptualize goal setting as a prescription-strength medication that requires careful dosing, consideration of harmful side effects, and close supervision. We offer a warning label to accompany the practice of setting goals.
EXCHANGE
Goals Gone Wild: The Systematic Side Effects of
Overprescribing Goal Setting
by Lisa D. Ordo´n˜ez, Maurice E. Schweitzer, Adam D. Galinsky, and Max H. Bazerman
Executive Overview
Goal setting is one of the most replicated and influential paradigms in the management literature.
Hundreds of studies conducted in numerous countries and contexts have consistently demonstrated that
setting specific, challenging goals can powerfully drive behavior and boost performance. Advocates of goal
setting have had a substantial impact on research, management education, and management practice. In
this article, we argue that the beneficial effects of goal setting have been overstated and that systematic
harm caused by goal setting has been largely ignored. We identify specific side effects associated with goal
setting, including a narrow focus that neglects nongoal areas, distorted risk preferences, a rise in unethical
behavior, inhibited learning, corrosion of organizational culture, and reduced intrinsic motivation. Rather
than dispensing goal setting as a benign, over-the-counter treatment for motivation, managers and scholars
need to conceptualize goal setting as a prescription-strength medication that requires careful dosing,
consideration of harmful side effects, and close supervision. We offer a warning label to accompany the
practice of setting goals.
For decades, goal setting has been promoted as a
panacea for improving employee motivation
and performance in organizations. Across hun-
dreds of experiments, dozens of tasks, and thou-
sands of participants on four continents, the re-
sults are clear (Locke & Latham, 1990):
Compared to vague, easy goals (e.g., “Do your
best”), specific, challenging goals boost perfor-
mance. In a review of four decades of goal-setting
research, Locke and Latham (2006, p. 265)
claimed, “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.”
In this article, however, we contend that goal
setting has been overprescribed. In particular, we
argue that goal setting has powerful and predict-
able side effects. Rather than being offered as an
“over-the-counter” salve for boosting perfor-
mance, goal setting should be prescribed selec-
tively, presented with a warning label, and closely
monitored.
Emblematic Examples of Goals Gone Wild
Here are just a few examples of the hazards of
indiscriminate goal setting. First, consider
Sears, Roebuck and Co.’s experience with
goal setting in the early 1990s. Sears set sales goals
for its auto repair staff of $147/hour. This specific,
challenging goal prompted staff to overcharge for
work and to complete unnecessary repairs on a
companywide basis (Dishneau, 1992). Ultimately,
Sears Chairman Edward Brennan acknowledged
Lisa D. Ordo´n˜ez (lordonez@u.arizona.edu) is a Professor at Eller College of Management, University of Arizona.
*Maurice E. Schweitzer (schweitzer@wharton.upenn.edu) is an Associate Professor at The Wharton School, University of Pennsylvania.
Adam D. Galinsky (agalinsky@kellogg.northwestern.edu) is a Professor at Kellogg School of Management, Northwestern University.
Max H. Bazerman (mbazerman@hbs.edu) is a Professor at Harvard Business School, Harvard University.
6 FebruaryAcademy of Management Perspectives
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that goal setting had motivated employees to de-
ceive customers. Sears’ “goal setting process for
service advisers created an environment where
mistakes did occur,” Brennan admitted (Disheau,
1992).
In the late 1990s, specific, challenging goals
fueled energy-trading company Enron’s rapid fi-
nancial success. Ackman (2002) compared En-
ron’s incentive system to “paying a salesman a
commission based on the volume of sales and
letting him set the price of goods sold.” Even
during Enron’s final days, Enron executives were
rewarded with large bonuses for meeting specific
revenue goals. In sum, “Enron executives were
meeting their goals, but they were the wrong
goals,” according to employee compensation ex-
pert Solange Charas (Ackman, 2002). By focusing
on revenue rather than profit, Enron executives
drove the company into the ground.
In the late 1960s, the Ford Motor Company
was losing market share to foreign competitors
that were selling small, fuel-efficient cars. CEO
Lee Iacocca announced the specific, challenging
goal of producing a new car that would be “under
2,000 pounds and under $2,000” and would be
available for purchase in 1970. This goal, coupled
with a tight deadline, meant that many levels of
management signed off on unperformed safety
checks to expedite the development of the car—
the Ford Pinto. One omitted safety check con-
cerned the fuel tank, which was located behind
the rear axle in less than 10 inches of crush space.
Lawsuits later revealed what Ford should have
corrected in its design process: The Pinto could
ignite on impact. Investigations revealed that af-
ter Ford finally discovered the hazard, executives
remained committed to their goal and instead of
repairing the faulty design, calculated that the costs
of lawsuits associated with Pinto fires (which in-
volved 53 deaths and many injuries) would be less
than the cost of fixing the design. In this case, the
specific, challenging goals were met (speed to mar-
ket, fuel efficiency, and cost) at the expense of other
important features that were not specified (safety,
ethical behavior, and company reputation).
As these disasters suggest, the harmful effects of
goal setting have received far too little attention
in the management literature. Although prior
work has acknowledged “pitfalls” of goal setting
(Latham & Locke, 2006), we argue that the harm-
ful side effects of goal setting are far more serious
and systematic than prior reviews of goal setting
have acknowledged. First, we begin by describing
the systematic and predictable ways in which goal
setting harms organizations. We describe how the
use of goal setting can degrade employee perfor-
mance by narrowing focus to neglect important but
nonspecified goals, motivating risky and unethical
behaviors, inhibiting learning, corroding organiza-
tional culture, and reducing intrinsic motivation.
We argue that, in many situations, the damaging
effects of goal setting outweigh its benefits.
Second, we offer a warning label to guide the
use of goal setting. We identify specific questions
managers should ask in order to ascertain whether
the harmful effects of goal setting outweigh the
potential benefits.
Third, we call for further study of the adverse
consequences of goal setting. Given the wide-
spread endorsement and use of goal setting, we
argue that its harmful effects deserve additional
scholarly and managerial attention.
How Goals Go Wild
Advocates of goal setting argue that for goals to
be successful, they should be specific and chal-
lenging. Countless studies (see Locke &
Latham, 2002, 2006) find that specific, challeng-
ing goals motivate performance far better than “do
your best” exhortations. According to these find-
ings, specific goals provide clear, unambiguous, and
objective means for evaluating employee perfor-
mance. Specific goals focus people’s attention; lack-
ing a specific goal, employee attention may be dis-
persed across too many possible objectives. In turn,
because challenging goals, or “stretch” goals, create a
discrepancy between one’s current and expected
output, they motivate greater effort and persistence.
Although specific, challenging goals can pro-
duce positive results, we argue that it is often these
same characteristics that cause goals to “go wild.”
When Goals Are Too Specific
As research has shown, goals focus attention. Un-
fortunately, goals can focus attention so narrowly
that people overlook other important features of a
2009 7Ordo´n˜ez, Schweitzer, Galinsky, and Bazerman
task. Consider Simons and Chabris’ (1999; Neis-
ser, 1979) well-known study of inattentional
blindness. The 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. Given the task of
counting basketball passes among people wearing
only white shirts, people unconsciously block out
the black-shirted individuals. As a result of this
narrow focus, most participants fail to notice
when a man wearing a black gorilla suit saunters
into the middle of the screen, pounds his chest,
and walks off screen. Intense concentration on the
counting task causes people to overlook a striking
element of their visual world. This focusing prob-
lem has broad application (Bazerman & Chugh,
2006) and direct relevance to goal setting.
Narrow Goals
With goals, people narrow their focus. This in-
tense focus can blind people to important issues
that appear unrelated to the goal (as in the case of
Ford employees who overlooked safety testing to
rush the Pinto to market). The tendency to focus
too narrowly on goals is compounded when man-
agers chart the wrong course by setting the wrong
goal (e.g., setting revenue rather than profit goals
at Enron).
Setting appropriate goals is a difficult, intricate
process. Suppose that a university department
bases tenure decisions primarily on the number of
articles professors publish. This goal will motivate
professors to accomplish the narrow objective of
publishing articles. Other important objectives,
however, such as research impact, teaching, and
service, may suffer. Consistent with the classic
notion that you get what you reward (Kerr, 1975,
1995), goal setting may cause people to ignore
important dimensions of performance that are not
specified by the goal-setting system.
Staw and Boettger (1990) documented the haz-
ards of narrow focus fostered by goals in a clever
study. They asked students to proofread a para-
graph that contained both grammatical and bla-
tant content errors. The paragraph was purport-
edly going to be used in a brochure promoting the
business college. The authors found that individ-
uals instructed to “do your best” were more likely
to correct both grammatical and content errors
than were those who were given explicit goals to
correct either grammar or content. Tenbrunsel,
Wade-Benzoni, Messick, and Bazerman (2000)
made a related point. They argued that standards,
such as the Environmental Protection Agency’s
standards on pollution, too often focus compliance
on specific, measurable goals at the expense of the
overall mission of protecting the environment.
When managers set targets for specific dimen-
sions of a problem, they often fail to anticipate the
broader results of their directives. Goals “inform
the individual about what behavior is valued and
appropriate” (Staw & Boettger, 1990, p. 555).
The very presence of goals may lead employees to
focus myopically on short-term gains and lose
sight of the potential devastating long-term effects
on the organization.
Too Many Goals
A related problem occurs when employees pursue
multiple goals at one time. Shah, Friedman, and
Kruglanski (2002) demonstrated that individuals
with multiple goals are prone to concentrate on
only one goal. Related research suggests that some
types of goals are more likely to be ignored than
others. In a stock selection task, Gilliland and
Landis (1992) gave participants both quality goals
and quantity goals. When quantity and quality
goals were both difficult, participants sacrificed
quality to meet the quantity goals. Goals that are
easier to achieve and measure (such as quantity)
may be given more attention than other goals
(such as quality) in a multigoal situation.
Inappropriate Time Horizon
Even if goals are set on the right attribute, the
time horizon may be inappropriate. For example,
goals that emphasize immediate performance (e.g.,
this quarter’s profits) prompt managers to engage in
myopic, short-term behavior that harms the organi-
zation in the long run. Cheng, Subramanyam, and
Zhang (2005) showed that firms that issued quarterly
earnings reports frequently tended to meet or beat
analyst expectations, but also tended to invest less in
research and development. The effort to meet short-
term targets occurred at the expense of long-term
growth. Some companies are learning from these
8 FebruaryAcademy of Management Perspectives
mistakes; Coca-Cola announced in 2002 that it
would cease issuing quarterly earnings guidance and
provide more information about progress on long-
term objectives.
The time horizon problem is related to the
notion that goals can lead people to perceive their
goals as ceilings rather than floors for perfor-
mance. Just as the pigeons in the Skinner exper-
iments demonstrated “post-pellet pause” (a state
of inactivity after their pecking produced the de-
sired pellet of food), once a goal is achieved peo-
ple pause, relax, and rest. For example, a salesper-
son, after meeting her monthly sales quota, may
spend the rest of the month playing golf rather
than working on new sales leads. An excellent
example of this problem comes from a study of
New York City cab drivers. This study answered
the age-old question of why it is so hard to get a
cab on a rainy day (Camerer, Babcock, Loewen-
stein, & Thaler, 1997). Most people blame de-
mand: More people hail cabs when it is raining
than when the weather is clear. But as it turns out,
supply is another important culprit. Cabs start
disappearing more quickly from Manhattan streets
on rainy days than on sunny days. Why? Because
of the specific daily goal most cab drivers set: to
earn double the amount it costs them to rent their
cabs for a 12-hour shift. On rainy days, cabbies
make money more quickly than on sunny days
(because demand is indeed higher), hit their daily
goal sooner, and go home (the problem of goals as
ceilings). This finding flies in the face of the
economic tenet of wage elasticity, which predicts
that people should work more hours on days when
they can earn more money and less on days when
they earn less. If Manhattan taxi drivers used a
longer time horizon (perhaps weekly or monthly),
kept track of indicators of increased demand (e.g.,
rain or special events), and ignored their typical
daily goal, they could increase their overall wages,
decrease the overall time they spend working, and
improve the welfare of drenched New Yorkers.
When Goals Are Too Challenging
Proponents of goal setting claim that a positive
linear relationship exists between the difficulty of
a goal and employee performance. Specifically,
they argue that goals should be set at the most
challenging level possible to inspire effort, com-
mitment, and performance—but should not be so
challenging that employees see no point in trying.
This logic makes intuitive sense, but stretch goals
also cause serious side effects, shifting risk atti-
tudes, promoting unethical behavior, and trigger-
ing the psychological costs of goal failure.
Risk Taking
As prior work conjectured (Knight, Durham, &
Locke, 2001; Neale & Bazerman, 1985) and re-
cent work has demonstrated (Larrick, Heath, &
Wu, in press), goal setting distorts risk prefer-
ences. Larrick et al. (in press) demonstrated that
people motivated by specific, challenging goals
adopt riskier strategies and choose riskier gambles
than do those with less challenging or vague goals.
Related work has found that goals harm nego-
tiation performance by increasing risky behavior.
Negotiators with goals are more likely to reach an
inefficient impasse (i.e., failure to reach a profit-
able agreement) than are negotiators who lack
goals (Galinsky, Mussweiler, & Medvec, 2002;
Neale & Bazerman, 1985). For example, Galinsky
et al. (2002) found that stretch goals increased the
number of impasses, and Larrick et al. (in press)
found that goals prompted participants to make
larger demands that in turn destroyed value. It is
also quite easy to imagine that a negotiator who
has obtained concessions sufficient to reach his
goal will accept the agreement on the table, even
if the value-maximizing strategy would be to con-
tinue the negotiation process. Clearly, in some
domains, goal setting can significantly harm per-
formance rather than promoting better outcomes.
An excessive focus on goals may have
prompted the risk-taking behavior that lies at the
root of many real-world disasters. The collapse of
Continental Illinois Bank provides an example
with striking parallels to the collapse of Enron and
the financial crisis of 2008. In 1976, when Con-
tinental was the ninth-largest bank in the United
States, Continental’s chairman announced that
within five years, the magnitude of the bank’s
lending would match that of any other bank. To
reach this stretch goal, the bank shifted its strat-
egy from conservative corporate financing toward
aggressive pursuit of borrowers. Continental al-
2009 9Ordo´n˜ez, Schweitzer, Galinsky, and Bazerman
lowed officers to buy loans made by smaller banks
that had invested heavily in very risky loans.
Continental would have become 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.
In other domains, such as the design process for
the Ford Pinto, the perceptual blinders of narrow
and challenging goals have had fatal conse-
quences. Kayes (2006) cited the 1996 Mt. Everest
disaster in which eight climbers died due to the
decisions of the two team leaders as an example of
“destructive goal pursuit.” On Mt. Everest, world-
class high-altitude guides Rob Hall and Scott
Fischer identified so closely with the goal of reach-
ing the summit that they made risky decisions that
led to their own and six of their clients’ deaths.
Kayes identified warning signs of leaders who have
become excessively fixated on goals: expressing nar-
rowly defined goals, associating goals with destiny,
expressing an idealized future, offering goal-driven
justifications, facing public expectations, and at-
tempting to engage in face-saving behavior.
Unethical Behavior
Another serious way goal setting can damage or-
ganizations is by promoting unethical behavior.
At Sears’ automotive unit, employees charged cus-
tomers for unnecessary repairs in order to meet
specific, challenging goals. In the late 1980s, Mi-
niscribe employees shipped actual bricks to cus-
tomers instead of disk drives to meet shipping
targets. And in 1993, Bausch and Lomb employ-
ees falsified financial statements to meet earnings
goals. In each of these cases, specific, challenging
goals motivated employees to engage in unethical
behavior.
Goal setting has been promoted as a powerful
motivational tool, but substantial evidence dem-
onstrates that in addition to motivating construc-
tive effort, goal setting can induce unethical
behavior. Surprisingly little research in the goal-
setting literature has examined what people might
do when they have the opportunity to misrepre-
sent their performance or cheat to attain a goal.
One of the few studies that looked for a direct link
between goal setting and cheating found that par-
ticipants were more likely to misrepresent their
performance level when they had a specific, chal-
lenging goal than when they did not, especially
when their actual performance level fell just short
of reaching the goal (Schweitzer, Ordo´n˜ez, &
Douma, 2004). Similarly, when senior manage-
ment gives lawyers and consultants specific, chal-
lenging goals for billable hours, they may bill
clients for hours they never worked.
Goal setting can promote two different types of
cheating behavior. First, when motivated by a
goal, people may choose to use unethical methods
to reach it. For example, at Sears, mechanics told
customers that they needed unnecessary repairs
and then performed and charged them for this
unneeded work. Second, goal setting can motivate
people to misrepresent their performance level—in
other words, to report that they met a goal when
in fact they fell short. For example, employees at
Bausch and Lomb who were driven to reach sales
targets reported sales that never took place.
Goal setting, of course, is not the only cause of
employee unethical behavior, but it is certainly an
important, understudied ingredient. A number of
factors serve as catalysts in the relationship be-
tween goal setting and cheating: lax oversight,
financial incentives for meeting performance tar-
gets (Jensen, 2003; Schweitzer et al., 2004), and
organizational cultures with a weak commitment
to ethics.
The interplay between organizational culture
and goal setting is particularly important. An eth-
ical organizational culture can rein in the harmful
effects of goal setting, but at the same time, the
use of goals can influence organizational culture.
Specifically, the use of goal setting, like “manage-
ment by objectives,” creates a focus on ends rather
than means. Barsky (2007) argued that goal set-
ting impedes ethical decision making by making it
harder for employees to recognize ethical issues
and easier for them to rationalize unethical behav-
ior. Given that small actions within an organiza-
tion can have broad implications for organiza-
tional culture (Fleming & Zyglidopoulos, 2008),
we postulate that aggressive goal setting within an
organization increases the likelihood of creating an
organizational climate ripe for unethical behavior.
That is, not only does goal setting directly moti-
vate unethical behavior, but its introduction may
10 FebruaryAcademy of Management Perspectives
also motivate unethical behavior indirectly by
subtly altering an organization’s culture. In sum,
although many factors contribute to unethical be-
havior, the point cannot be overstated: Goal set-
ting motivates unethical behavior.
Dissatisfaction and the Psychological Consequences of Goal Failure
One problem embedded in stretch goals is the
possibility that the goal may not be reached. In
negotiations, for example, challenging goals can
increase negotiation and task performance but
decrease satisfaction with high-quality outcomes
(Galinsky et al., 2002; Garland, 1983). These
decreases in satisfaction influence how people
view themselves and have important conse-
quences for future behavior. Mussweiler and
Strack (2000) found that giving someone a chal-
lenging goal rather than an easy goal on an atten-
tion task or an intelligence test improved per-
formance but left people questioning their
concentration abilities and overall intelligence.
These goal-induced reductions in self-efficacy can
be highly detrimental, because perceptions of self-
efficacy are a key predictor of task engagement,
commitment, and effort (Bandura, 1977).
Goals, Learning, and Cooperation
To adapt to a competitive landscape, organiza-
tions need employees who are able to learn and
collaborate with their colleagues. Goals can in-
hibit both learning and cooperation.
Goals Inhibit Learning
When individuals face a complex task, specific,
challenging goals may inhibit learning from expe-
rience and degrade performance compared to ex-
hortations to “do your best” (Cervone, Jiwani, &
Wood, 1991; Earley, Connolly, & Ekegren, 1989;
Wood, Bandura, & Bailey, 1990). An individual
who is narrowly focused on a performance goal
will be less likely to try alternative methods that
could help her learn how to perform a task. As an
example of this phenomenon, Locke and Latham
(2002) described an air traffic controller simula-
tion in which the performance goal interfered
with learning in this complex domain (Kanfer &
Ackerman, 1989). Overall, the narrow focus of
specific goals can inspire performance but prevent
learning.
Locke and Latham recommended that “learn-
ing goals” be used in complex situations rather
than “performance goals.” In practice, however,
managers may have trouble determining when a
task is complex enough to warrant a learning
rather than a performance goal. In many changing
business environments, perhaps learning goals
should be the norm. Even when tasks are complex
enough to clearly warrant learning goals, manag-
ers face the challenge of identifying the specific,
challenging goal levels for learning objectives.
Setting the right goals is itself a challenging affair.
Goals Create a Culture of Competition
Organizations that rely heavily on goal setting
may erode the foundation of cooperation that holds
groups together. Arrow (1973) argued that an exclu-
sive focus on profit maximization can harm altruistic
and other-regarding behavioral motives. Similarly,
being too focused on achieving a specific goal may
decrease extra-role behavior, such as helping co-
workers (Wright, George, Farnsworth, & McMahan,
1993). Goals may promote competition rather than
cooperation and ultimately lower overall perfor-
mance (Mitchell & Silver, 1990).
When Goals Harm Motivation Itself
As goal setting increases extrinsic motivation, it can
harm intrinsic motivation—engaging in a task for
its own sake (Mossholder, 1980; Rawsthorne & El-
liot, 1999; Shalley & Oldham, 1985). This is true of
rewards in general (Deci, Koestner, & Ryan, 1999),
but several studies demonstrate that it is particularly
true for goals themselves (Elliot & Harackiewicz,
1996; Rawsthorne & Elliot, 1999).
This problem is important, because managers are
likely to overvalue and overuse goals. Although peo-
ple recognize the importance of intrinsic rewards in
motivating themselves, people exaggerate the im-
portance of extrinsic rewards in motivating others
(Heath, 1999). In short, managers may think that
others need to be motivated by specific, challenging
goals far more often than they actually do.
By setting goals, managers may create a hedonic
treadmill in which employees are motivated by ex-
2009 11Ordo´n˜ez, Schweitzer, Galinsky, and Bazerman
ternal means (e.g., goals and rewards) and not by the
intrinsic value of the job itself (Deci, 1971, 1975).
Can We Set the Right Goal? The Problem
of Calibration
Proponents of goal setting have long champi-
oned the simplicity of its implementation and
the efficiency of its effects. In practice, how-
ever, setting goals is a challenging process, espe-
cially in novel settings.
Goal setting can become problematic when the
same goal is applied to many different people. Given
the variability of performance on any given task, any
standard goal set for a group of people will vary in
difficulty for individual members; thus, the goal will
simultaneously be too easy for some and too difficult
for others. Conversely, idiosyncratically tailoring
goals to each individual can lead to charges of un-
fairness. This 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 (Cropan-
zano, Byrne, Bobocel, & Rupp, 2001; Walster, Wal-
ster, & Berscheid, 1978). For example, salary dispar-
ities between executives and lower-level managers
predict the organizational exodus of underpaid man-
agers (Wade, O’Reilly, & Pollock, 2006). Both
broad-based goals and idiosyncratic goals can lead to
problems.
Perverse incentives can also make goal setting
politically and practically problematic. When reach-
ing preset goals matters more than absolute perfor-
mance, self-interested individuals can strategically
set (or guide their managers to set) easy-to-meet
goals. By lowering the bar, they procure valuable
rewards and accolades. Company executives often
choose to manage expectations rather than maxi-
mize earnings (Bartov, Givoly, & Hayn, 2002). In
some cases, managers set a combination of goals
that, in aggregate, appears rational, but is in fact not
constructive. For example, consider a self-interested
CEO who receives a bonus for hitting targets. This
CEO may set a mix of easy goals (that she is sure to
meet) and “what the hell” difficult goals (that she
does not plan to meet). On average, the goal levels
may seem appropriate, but this mix of goals may
generously reward the CEO (when she meets the
easy goals) without motivating any additional effort
when the goals are difficult. In reality, CEOs (and
many Wall Street executives) face asymmetric re-
wards—a large bonus for meeting the goal in one
year, but no fear of having to return a large bonus the
next year for underperforming.
Getting It Right: Harness the Power of Goals
There are many ways in which goals go wild:
They can narrow focus, motivate risk-taking,
lure people into unethical behavior, inhibit
learning, increase competition, and decrease in-
trinsic motivation. At the same time, goals can
inspire employees and improve performance.
How, then, should we prescribe the use of goal
setting? Which systematic side effects of goal set-
ting should we most closely monitor, and how can
we minimize the side effects?
Just as doctors prescribe drugs selectively,
mindful of interactions and adverse reactions, so
too should managers carefully prescribe goals. To
do so, managers must consider—and scholars must
study—the complex interplay between goal set-
ting and organizational contexts, as well as the
need for safeguards and monitoring.
According to General Electric’s Steve Kerr, an
expert in reward and measurement systems, “most
organizations don’t have a clue how to manage
‘stretch goals’” (Sherman, 1995). He advises man-
agers to avoid setting goals that increase employee
stress, to refrain from punishing failure, and to
provide the tools employees need to meet ambi-
tious goals. Integrating these ideas, we urge man-
agers to think carefully about whether goals are
necessary, and, if so, about how to implement a
goal-setting system. In particular, we encourage
managers to ask themselves the questions listed in
Table 1 when considering the use of goals.
This cautious approach to setting goals is con-
sistent with King and Burton’s (2003, pp. 63–64)
claim that goals should be used only in the nar-
rowest of circumstances:
The optimally striving individual ought to endeavor to
achieve and approach goals that only slightly implicate the
self; that are only moderately important, fairly easy, and
moderately abstract; that do not conflict with each other;
and that concern the accomplishment of something other
than financial gain.
12 FebruaryAcademy of Management Perspectives
After answering the questions in Table 1 and con-
sidering this advice, many managers may conclude
that goals are not the best way to motivate their
employees. At a minimum, we recommend that
managers who use goals do so with great caution.
Directions for Future Research
Why has prior research largely ignored the
harmful effects of setting goals? Part of the
problem stems from the methodological
prism scholars have used to study goal setting.
Most research, whether it occurs in the lab or in the
field, has been conducted in simple, well-specified
domains with well-specified performance measures
such as the number of anagrams completed (e.g.,
Vance & Colella, 1990), the amount of electricity
used (Becker, 1978), or the number of sales com-
pleted (Mann, Samson, & Dow, 1998).
Although all four authors of this article are
enthusiastic supporters of lab research, we argue
that goals cause the most harm in complex, nat-
ural settings when outcomes are interdependent,
monitoring is difficult, and cheating is possible.
When scholars have recognized harmful effects
of goals, these effects have been characterized as
aberrations that could be addressed with simple
solutions and relatively little effort. Latham and
Locke (2006) listed ten pitfalls of goal setting,
such as conflict between group members, task
complexity, and financial incentives. For each
pitfall, the authors suggested simple (and often
untested) solutions. For example, noting that dis-
honest means could be used to earn financial
rewards tied to goals, they suggested that an orga-
nization establish “control systems,” that the CEO
should model an ethical culture, and that offend-
Table 1
Ten Questions to Ask Before Setting Goals
Question to ask before setting goals Why is this important to ask? Possible remediation
Are the goals too specific? Narrow goals can blind people to important aspects
of a problem.
Be sure that goals are comprehensive and include all
of the critical components for firm success (e.g.,
quantity and quality).
Are the goals too challenging? What will happen if goals are not met? How will
individual employees and outcomes be evaluated?
Will failure harm motivation and self-efficacy?
Provide skills and training to enable employees to
reach goals. Avoid harsh punishment for failure to
reach a goal.
Who sets the goals? People will become more committed to goals they
help to set. At the same time, people may be
tempted to set easy-to-reach goals.
Allow transparency in the goal-setting process and
involve more than one person or unit.
Is the time horizon appropriate? Short-term goals may harm long-term
performance.
Be sure that short-term efforts to reach a goal do not
harm investment in long-term outcomes.
How might goals influence risk taking? Unmet goals may induce risk taking. Be sure to articulate acceptable levels of risk.
How might goals motivate unethical
behavior?
Goals narrow focus. Employees with goals are less
likely to recognize ethical issues, and more likely
to rationalize their unethical behavior.
Multiple safeguards may be necessary to ensure
ethical behavior while attaining goals (e.g., leaders as
exemplars of ethical behavior, making the costs of
cheating far greater than the benefit, strong
oversight).
Can goals be idiosyncratically tailored for
individual abilities and circumstances while
preserving fairness?
Individual differences may make standardized
goals inappropriate, yet unequal goals may be
unfair.
If possible, strive to set goals that use common
standards and account for individual variation.
How will goals influence organizational
culture?
Individual goals may harm cooperation and
corrode organizational culture.
If cooperation is essential, consider setting team-based
rather than individual goals.Think carefully about the
values that the specific, challenging goals convey.
Are individuals intrinsically motivated? Goal setting can harm intrinsic motivation. Assess intrinsic motivation and avoid setting goals
when intrinsic motivation is high.
What type of goal (performance or learning)
is most appropriate given the ultimate
objectives of the organization?
By focusing on performance goals, employees may
fail to search for better strategies and fail to learn.
In complex, changing environments, learning goals
may be more effective than performance goals.
2009 13Ordo´n˜ez, Schweitzer, Galinsky, and Bazerman
ing employees “should be fired regardless of any
revenue streams they generate or costs they reduce”
(p. 337). Recent corporate ethics scandals suggest
that this advice may be difficult to follow. Further, as
Barsky’s model (2007) of the ethical implications of
organizational goal setting implies, ethical infrac-
tions are not simply a by-product of a few “bad
apple” employees, but a systematic result of setting
specific, challenging goals; similarly, Jensen (2003)
contended that lying and cheating are by-products of
connecting rewards to goal achievement.
How did this discrepancy between the goal-
setting literature and the wild world of actual
organizations develop? We argue that researchers
(with the goal of publishing) followed a set of
paradigmatic paths that easily provided a practi-
cal, replicable set of evidence on goal setting. As
Wason (1960) demonstrated long ago, people (in-
cluding researchers) tend to seek confirmatory
evidence and fail to search for disconfirmation.
The relatively few studies that have directly chal-
lenged the conventional wisdom on goal setting
(Schweitzer et al., 2004; Staw & Boettger, 1990)
have been systematically ignored in reviews of
goal setting authored by goal-setting advocates
(e.g., Locke & Latham, 2006), even when they
consider the pitfalls of goals.
Like the participants in goal-setting studies
themselves, goal-setting advocates have met their
specific, challenging goal of becoming publishing
juggernauts, at the expense of the broader objec-
tives of providing scientific rigor and sound man-
agerial advice. We advocate a new generation of
goal-setting research that correctly identifies
broader objectives and carefully balances the in-
spirational and insidious effects of setting goals.
Conclusion
For decades, scholars have prescribed goal set-
ting as an all-purpose remedy for employee mo-
tivation. Rather than dispensing goal setting as a
benign, over-the-counter treatment for students of
management, experts need to conceptualize goal set-
ting as a prescription-strength medication that re-
quires careful dosing, consideration of harmful side
effects, and close supervision. Given the sway of goal
setting on intellectual pursuits in management, we
call for a more self-critical and less self-congratula-
tory approach to the study of goal setting.
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16 FebruaryAcademy of Management Perspectives
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