EthicsPoint sponsored a webinar by Dr. Lisa Ordóñez, University of Arizona, Professor of Management and Organizations in the Eller College of Management at The University of Arizona
“Applied managerial experience and hundreds of academic research studies have catalogued the positive impacts of goal setting on performance. Challenging, specific goals compared to instructions to “do your best” have been shown to increase effort, persistence, and performance. Goal setting theory has led to consultants training managers on how to use SMART (Specific, measurable, attainable, realistic, and timely) goals in their organizations. However, as Ordóñez, Schweitzer, Galinsky, & Bazerman (2009a, 2009b) point out, goals can have systematic, negative effects and can focus attention too narrowly, increase risk taking, and lead to unethical behavior.”
These are my notes from the webinar.
Dr. Ordóñez discussed some of the findings from her research where she found that goal-setting can lead to bad results and bad outcomes.
She started with some examples of how goal-setting ended up with bad results.
Why is hard to find a cab on rainy days in New York? The cabdrivers go home early. Their goal each day is to reach 2X their cost. They reach the goal faster on rainy days, so they go home earlier. they could have made money if they worked a full day.
General Motors focused on reaching 29% of the US Market. Executives even wore lapel pins with “29” on them. They focused on hitting the number (for example offering short term incentives) and not the long term goals of the company.
Fannie Mae was looking to expand the home ownership by low-income people. That resulted in them underwriting riskier loans.
Billable hours and ethics. If management sets utilization goals, people are more likely to pad their hours.
They ran a lab experiment in 2004 that tested people on test-taking. participants checked their own work. When the goal was to “do their best” their was less cheating than when their was a specific goal for correct answers.
She raised some questions to ask before setting goals:
- Are the goals too specific? Narrow goals can blind people to important aspects of a problem.
- Are the goals too challenging?
- Who sets the goal? People are more committed to goals they help to set.
- Is the time horizon appropriate? Short term goals can hurt long term performance.
- How might the goals influence risk taking? Unmet goals may induce risk taking.
- How might goals motivate unethical behavior?
- Can the goals be tailored for individual abilities while preserving fairness?
- How will the goals influence organizational behavior?
- Are individual intrinsically motivated? People may not like the activity anymore when their a goal tied to the activity.
- What type of goal is most appropriate given the ultimate objective? By focusing on the goal, employees may fail to search for better strategies.
So how do you motivate employees without goals?
You don’t. You can only link to what the employee wants to the desired performance.
Goals can be effective for direct effort, they can communicate the values of the organization and are very useful for menial tasks that simply need to be completed.
She ends with a warning:
Thanks to EthicsPoint (my company’s hotline provider) for putting on this great webinar.
References:
- On Good Scholarship, Goal Setting, and Scholars Gone Wild, May 20, 2009, Lisa D. Ordóñez, Maurice E. Schweitzer, Adam D. Galinsky, and Max H. Bazerman
- Schweitzer, M., Ordóñez, L. D., & Douma, B. (2004). The Dark Side of Goal Setting: The Role of Goals in Motivating Unethical Behavior. The Academy of Management Journal, 47, 422-432.
- Faculty Profile of Dr. Lisa Ordóñez at the University of Arizona