harvard business review goal setting

Harvard business review goal setting: It’s rare for a manager to isn’t involved in annual or quarterly goal-setting activities. And oh, how they do not set goals that are smarter (Specific goals, Measurable, Attainable and time-bound). What if these goals don’t perform? Researchers from four of the top business schools have teamed up to prove that, in many instances, goals can cause more harm than good. In addition, they can be a real threat to businesses as well as the individuals who use goals. “We argue that the beneficial effects of goal setting have been overstated and that systematic harm caused by goal setting has been largely ignored,” the researchers conclude.

The negative “side effects” produced by goals-setting programs can result in the rise of unethical behaviors, a tendency to focus on one particular area while overlooking other areas of the enterprise, distortions in risks, deterioration of the culture of the organization, and a decrease in intrinsic motivation. An example is the dangerous Ford Pinto. With the intention to construct a vehicle “under 2,000 pounds and under $2,000” in 1970, workers slacked off on safety tests and created an automobile in which the gas tank was prone to explosions due to rear-end collisions. 53 people were killed due to the accident.

If people are focused on the specific stretch goal but do not perform other important tasks that are required by the organization, the goals are not being met. This is exactly what Staw and Boettger observed some time ago. When employees focus solely on the achievement of a goal and negative things could occur if they fail in their goal, cheating is more likely. This is the most significant result of the literature on goal setting uncovered by my co-authors Lisa Ordonez and Maurice Schweitzer.

If you’re aware of the particular behaviors you’re looking for, the stretch goals could be acceptable. However, if you wish to encourage employees to participate in other socially responsible actions (e.g., or helping other employees in the company) or to behave ethically, it is essential to be more cautious rather than just providing the goal as a stretch. Furthermore, there’s an increasing amount of studies showing that “learning or mastery” goals have more positive impacts on productivity and motivation as compared to “performance” goals.

Your newspaper is filled with examples of goals that are wildly out of control, Everything from the overcharging of Sears auto mechanics, vanishing New York cab drivers, to Enron. Do you think that goals are the cause of the economic downturn we are currently experiencing?