By Lisa Ordóñez, Professor of Management and Organizations and Levine Family Faculty Fellow
Goals are good, right? It’s true that they focus our efforts and that they can encourage our employees to work harder and persist longer in order to meet those goals, especially when some incentives are attached. I often use goals in my personal life to get me through particularly boring and arduous tasks–like swimming a mile. I know that it takes 36 laps which I usually break down into smaller sets. Just finish these last 15 laps, I tell myself -somehow I get through it and feel proud of my accomplishment. The same thing happens in the workplace–study after study has shown the positive effects of goal setting. There is an entire industry based on helping organizations implement goal setting systems.
So, everybody should be using goals, right? Well, a recent paper I wrote (“Goals Gone Wild: The Systematic Side Effects of Overprescribing Goal Setting”) with my colleagues Maurice Schweitzer at Wharton, Adam Galinksy at Kellogg, and Max Bazerman at Harvard suggests that we should pause before blindly starting a goal setting system. We liken goals to a powerful drug that has positive effects but formidable side-effects. Although goals are used in organizations much like an over-the-counter remedy, we argue that it should be treated like a prescription medication–carefully prescribed and monitored.
Consider the possible negative side-effects. Goals may narrow our focus too much. Consider GM which set a goal of reaching 29% market share. GM executives even wore pins with the number 29 to keep their focus on the goal. The result was described in The Economist (2009) “Fixated on this target, the firm went on to make decision after disastrous decision that helped drag it to the brink of bankruptcy.” Goals may also lead to unethical behavior because dogged goal pursuit may blind us to the ethical implications of our decisions and/or lead to unethical actions to meet goals. In the early 1990’s, Sears set a specific, challenging goal of $147/hr for its auto repair staff which led to company-wide overcharging and unnecessary repairs. The 2001 No Child Left Behind federal program, which tied aid to specific test targets, has led to teaching to the tests and unethical behavior such as falsified test scores.
So, what is the take home message? Eliminate goals? That wasn’t our message. We simply wanted managers to be made aware of the potential problems with goals so that they could develop the motivation system that works best for their organization. Basically, nothing replaces good management, monitoring, and concentrated thinking. Any incentive system, management technique/fad, or training program has its flaws–we just have to continually ask ourselves if what we are doing in the organization is working and make sense for us at this time. Sorry, I wish I had an easier answer–but if it were that easy, everybody could do it!