A research paper called “Goals Gone Wild” reported on the potential harmful effects of goal setting.
The paper warns that goal setting can reduce employee performance, shift focus away from important non-specified goals, harm relationships, corrode culture and encourage risky and unethical behaviour.
One example included in the paper is Ford Motor Company.
In the late 1960s it was losing market share that were selling small, fuel-efficient cars. The CEO (Lee Iacocca) announced a goal of producing a new car that would be “under 2000 pounds and under $2,000” for sales in 1970.
This goal was specific, challenging and time bound but resulted in many levels of management signing off on unperformed safety checks to speed up the development of the Ford Pinto. One safety check that was overlooked involved the fuel tank, which had less than 10 inches of crush space.
Lawsuits later revealed that Ford should have corrected this design feature because the Pinto could ignite upon impact.
Investigations revealed that after 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 involved 53 deaths and many injuries) would be less than the cost of fixing the design.
The goal of quick design, fuel efficiency and low cost was met at the expense of safety, ethical behaviour and company reputation.
According to the paper there are three risks:
If the wrong goals are set which are too narrow then problems can occur. The paper referenced a study of students who were asked to proofread a paragraph that contained both grammatical and blatant content errors.
The study found that individuals 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.
Narrow goals can also inhibit learning in complex situations – the individual or team will be focused on just performance rather than learning.
Too challenging goals
Goal setting research shows a link between performance and goal difficultly.
The idea is to set goals at the most challenging level possible to inspire effort, commitment, and performance—but not so challenging that employee’s see no point in trying.
The paper points out that these “stretch” goals cause serious side-effects:
- Shifting risk attitudes
- Promoting unethical behaviour
- Triggering the psychological costs of goal failure
Goals can encourage people to take too many and too high risks. They can motivate people to engage in unethical behaviour to reach the goal or to just lie. And, if goals are not reached then self-belief can be eroded which is a driver of goal commitment.
Another aspect that can be too challenging is the timescale…if the time to achieve the goal is inappropriate then this can lead to short term behaviours that can harm the long term results.
If goals are too challenging they can harm cooperation as individuals focus on their goals at the expense of the team. And, goals can erode intrinsic motivation where there joy of doing good work is reduced because the focus is the goal.
From the study I have created 7 questions to ask on setting goals to help eliminate the potential downside of goals:
- Are the goals too specific?
Check that goals are comprehensive and include all of the critical components for firm success including quality, not just quantity.
- Are the goals too challenging?
Set goals for good performance and seek to gradually increase over time. Make sure there is training to enable employees to reach goals. Balance outcome goals with learning goals.
- Is the timescale appropriate?
Be sure that short-term efforts to reach a goal do not harm investment in long-term outcomes.
- How might goals motivate risk taking and unethical behaviour?
Ensure you consider, define and consider measuring levels of risk. Ask employees as well as the leadership and management team how the goal could lead to unethical behaviour.
- How will goals influence culture?
If cooperation is essential, consider setting team-based rather than individual goals. Seek to set goals that use common standards whilst accounting for individual variation.
- Are individuals intrinsically motivated?
Recognise that outcome goals can reduce intrinsic motivation and consider the goal of enjoying work as a goal.
- Consider the ultimate goals of the organisation
Think carefully about what type of goal is most appropriate? In complex, changing environments learning goals may be more effective.
If you’d like to use the power of goals to drive your business (and life) forward then get in touch.
Image from Flickr by Jose Antonio Cartelle.