Goal-Setting Theory

An employee's performance is a function of ability as well as motivation. Ability refers to a person's knowledge and skill. Knowledge and skill alone do not lead to action. Motivation is the choice to exert effort and to persist, drawing on knowledge and skill, until a desired goal is attained. A typology for understanding motivation includes a person's needs, values, goals, affect, and performance.

Needs are physiological as well as psychological. They affect a person's survival and well-being. Hence, they explain why people take action. Examples of an individual's needs are food, sleep, pleasure, and self-esteem. Thus needs explain why certain broad categories of behavior are universal, but they do not take into account individual differences in the actions people take to satisfy their needs. These differences are reflected in a person's values.

Values refer to a broad tendency to prefer certain states of affairs over others, what the person considers good, desirable, or beneficial. Values reflect beliefs about what is important. For example, some people place far greater value on individualism than collectivism, or low power distance in the workplace than high power distance between leaders and workers. Needs affect action through their effect on values, and values affect a person's behavior through their effect on the person's goals. Goals define for the individual or group what constitutes an acceptable level of performance or direction of action. Thus goal setting has a positive effect on increasing a person's interest in a task in that it provides people with a sense of purpose. Goals engage people's values by challenging them to see how well they can do. Engaging values ensures goal commitment.

Edwin A. Locke and Gary P. Latham's goal-setting theory states that goals are the immediate precursors and regulators of much, if not most human behavior. The theory does not imply that a person must always be fully consciously aware of a goal for it to regulate behavior. But it does state that given that there is commitment to a goal, it remains in the periphery of consciousness as a reference point for guiding and giving meaning to subsequent psychological and physiological actions that lead to goal attainment.

Goals have two main attributes: content and intensity. Goal content is the object or result that is sought. It can vary quantitatively in that a person may have few or many goals. People can have short-term proximal goals in addition to a long-term distal goal, and their goals may be easy or difficult. Goals may also vary in specificity from a vague and abstract one, such as do your best, to a specific one, such as to decrease [Page 279]costs by 20% within the next 12 months. Goals may also vary in type from a focus on a performance outcome to learning or discovering a specific number of processes or to those that are behavioral in nature.

Goal intensity refers to the determinants and effects of goal commitment on performance as well as the place of a given goal in a person's goal hierarchy. Goal content and intensity can be related. An intense psychological process might be involved in setting a clear, specific goal rather than a vague goal in a situation where a great deal of information has to be analyzed and integrated before a goal can be clearly formulated. Hence, setting a specific performance goal in this instance would be more intense than adopting a vague goal.

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