Chapter 3 – Organisational

Collaboration Book
Goals Gone Wild The Systematic Side
Effects of Overprescribing goal setting

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•
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) LY - Lebanon Branch - B325 2
 How Goals Go Wild

1. Advocates of goal setting argue that for goals to be

successful, they should be specific and challenging
2. Studies find that specific ,challenging goals motivate
performance far better than “do your best”
exhortations.
3. Specific goals focus people’s attention; lacking a
specific goal, employee attention may be dispersed
across too many possible objectives
4. Although specific, challenging goals can produce
positive results we argue that it is often these same
characteristics that cause goals to ‘go wild’

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 When goals are too specific
1.As research has shown, goals focus attention.
Unfortunately goals can focus attention so narrowly
that people overlook other important feature of a task
2. Intense concentration on the counting task causes
people to overlook a striking element of their visual
world
3. This focusing problem has broad application and
direct relevance to goal setting

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 Narrow goals
1. With goals, people narrow their focus. This intense focus can blind people
to important issues that appear unrelated to the goal .
For example, the case of Ford employees who overlooked safety testing to rush
the Pinto to market
2. The tendency to focus too narrowly on goals is compounded when managers
chart the wrong course by setting wrong goals is a difficult, intricate process.
3. This can be further explained with an example of a university department
which bases tenure decisions primarily on the number articles published by the
professors.
This goal will motivate professors to accomplish the narrow objective of
pulishing articles however, other important objectives such as research impact,
teaching and service may suffer.
4. hence, goal setting may cause people to ignore important dimensions of
performance that are not specified by the goal setting system
5. Tenbrunsel et al (2000) argue that standards such as the environemntal
Protection Agency’s standards on pollution , too often focus compliance on
specific , measureable goals at the expense of the overall mission of protecting
the environment LY - Lebanon Branch - B325 5
 Too many goals
1. A related problem occurs when employees pursue multiple goals at
one time
2. Individuals with multiple goals are prone to concentrate on only one
goal and studies suggest that some types of goals are more likely to e
ignored than others
3. 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
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).

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 Inappropriate time horizon
1. Even if goals are set on the right attribute, the time horizon may e inappropriate.
For example, goals that emphasize immediate performance prompt managers to
engage in short term behaviour that harms the organization in the long run
2. The effort to meet short term targets occurred at the expense of long term growth
3. The time horizon problem is related to the notion that goals can lead people to
perceive their goals as ceilings rather than floors for performance.
For example this can further explained with the example that comes from a study of
new york city cab drivers. It answers the age old question to why it is so hard to get a
cab on a rainy day.
Cabs start disappearing more quickly from manhattan streets on rainy days than on
sunny days because of the speicifc daily goal most cab drivers set. On rainy days
cabbies make more money quickly than on sunny days as demand is higher, hit their
daily goal sooner and go home .
If the manhanttan taxi drivers used a longer time horizon and kept track of indicators
of increased demand and ignored the daily goal , they could increase their overall
wages and improve the welfare of drenched New Yorkers.

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 When goals are too challenging
1. Goals should be set at the most challenging level possible to inspire
effort, commitment and performance but should not be so challenging that
employees see no point in trying .
2. 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.

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 Risk taking
1.Larrick et al demonstrated that people motivated by specific , challenging goals adopt
riskier strategies and choose riskier gambles than do those with less challenging or vague
goals
2. Goals have been found in studies to harm negotiation performance by increasing risky
behaviour. For example, studies have shown that stretch goals increased the number of
impasses and larrick et al found that goals prompted participants to make larger demands
that in turn destroyed value
3. clearly, in some domains goal setting can significantly harm performance rather than
promoting better outcomes
4. In other domains, such as the design process for the Ford Pinto, the perceptual blinders of
narrow and challenging goals have had fatal consequences. For example, the 1996 Mount
everest disaster in which eight climbers died due to the decisions od the two team leaders as
a n example of ‘destructive pursuit’.
Warnings signs of leaders were identified by Kayes (2006). Where the leaders have become
such as excessively fixed on goals, expressing narrowly defined goals, associating goals with
destiny and facing public expectations

5. 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. LY - Lebanon Branch - B325 9
 Unethical behaviour
1. another serious way goal setting can damage organizations is y promoting
unethical behviour.
For exaMPLE, Bausch and Lomb employees falsified financial statements to meet
earnings goals. This shows that specific, challenging goals motivated employees to
engage in unethical behviiour.
2. Goal setting has been promoted as a powerful motivational tool but goal setting
can induce unethical behaviour.
Studies examining the link between goal setting and cheating found that participants
were more likely to misinterpret their performance level when they has a specific
,challenging goal than when they did not
For example, senior management gives lawyers specific challenging goals for billale
hours however they may even ill clients for hours they never worked.
3. Goal setting can promote two different types of cheating behaviour.
Firstly, when motivated by a goal, people may choose to use unethical methods to
reach it.
For example, sears mechanics told customers that they needed unnecessary repairs
and charged the customers for the unneeded work
Secondly, goal setting can motivate people to misinterpret their performance level
that is to report that they have met a goal when in real they fell short.
For example, employees in BauschLYand Lomb who were driven to reach sales targets 10
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reported sales that never took place.
 Unethical behaviour
4. A number of factors serve as catalysts in the relationship between goal
setting and cheating such as
– Lax oversight
– Financial incentives for meeting performance targets
– Organizational culture with a weak commitment to ethics
5. The interplay between organizational culture and goal setting is
particularly important.
An ethical organizational culture can rein in the harmful effects of goal
setting but at the same time the use of goals can influence organizational
culture.
Goal setting does not only directly motivate unethical behaviour but its
introduction may also motivate unethical behviour indirectly by subtly
altering an organization’s culture.

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 Dissatisfaction and the psychological consequences of goal
failure:
1. One problem embedded in stretch goals is the possibiltiy that the goal
may not be reached.
For example, challenging goals can increase negotiation and task
performance but decrease satisfaction with high-quality outcomes.
2. These decreases in satisfaction influence how people view themselves and
have important consequences for future behaviour.
3. Studies found that giving someone a challenging goal rather than an easy
goal on an attention task improved performance but left people questioning
their concentration abilities and overall intelligence
4. 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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 Goals, Learning and Cooperation

• Organizations need employees able to learn and collaborate with colleagues.

• Goals inhibit (slow down) learning:

– When individuals face complex task, specific and challenging goals may restrain learning
from experience and decrease performance. The narrow focus of specific goals can inspire
performance but prevent learning.
– “Learning goals” are hence recommended to be used in complex situations rather than
“performance goals”. Yet, sometimes it is difficult to do that given that managers may have
trouble determining when a task is complex enough to warrant a learning rather than a
performance goal.

• Goals create culture of competition:

– Organizations that rely heavily on goal setting may erode the foundation of cooperation
that holds groups together.
– Being too focused on achieving a specific goal may decrease extra-role behavior, such as
helping coworkers.
– Goals may promote competition rather than cooperation and ultimately lower overall
performance. LY - Lebanon Branch - B325 13
 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. LY - Lebanon Branch - B325 14