Practical Applications of Goal Setting Theory to Performance Management

Abstract

A key ingredient for effectively coaching employees is the prudent use of goal setting. The prime axiom of goal setting theory is that specific, difficult goals lead to higher performance than when people strive to simply "do their best" (Locke, 1966, Locke & Latham, 1990). The performance benefits of challenging, specific goals have been demonstrated in hundreds of laboratory and field studies (Locke & Latham, 1990, 2002). Specific challenging goals do not, however, necessarily lead to such desirable personal and organizational outcomes. Rather, the results from goal setting depend critically on issues pertaining to goal commitment, task complexity, goal framing, team goals, and feedback. The purpose of this paper is to discuss recent developments regarding how these five factors can be managed to enable effective performance management.

Keywords: Performance management, goal setting, goal commitment, self-efficacy

JEL Classification: M10, M12, M53