|Goal Setting for Human Resources
A revolutionary management tool that works.
April 16, 2009
Not all successful people have clear goals. For example, New York City’s Mayor Michael Bloomberg, founder of Bloomberg, LP writes in his 1997 autobiography that he never believed in goals. Nevertheless, many high achievers have visualized future achievements early in life. For example, Robert Moses, New York’s legendary public servant, visualized what is now the Henry Hudson Parkway when he was still a college student. The inventor Nikola Tesla visualized a power wheel under Niagara Falls when he was but a schoolboy in Croatia. He went on not only to invent A/C electricity but also to build the world’s first hydro-electric power generator under Niagara Falls.
Goal setting is an effective tool for managing human resources as well as developing one’s career. Yet, many employees do not develop a mission, and many firms fail to exploit the potentials of systematic goal setting.
One of the earliest applications of goal setting was in Frederick W. Taylor’s system of scientific management. Taylor advocated time and motion studies to set a standard rate of output. The standard rate amounted to a goal that would be set for all employees. Taylor combined his goal setting methodology with monetary incentives, but subsequent research by Edwin Locke and Gary Latham from the 1960s to the 1990s uncovered the valuable contribution that goals alone can make to corporate performance with or without a bonus. Locke and Latham found that difficult goals increase output. In one study they found that loggers could be induced to increase the productivity of log shipments by 50 percent simply through ambitious goal setting. Once trust was established, the loggers began to view the goal as a competitive game.
Locke and Latham performed extensive research about goals over a wide range of tasks and employee types. They found that hard goals motivate best, and the harder the goal the better employee performance becomes. When employees are willing to commit to a goal, they are more likely to attain it. Goals work best when they are combined with feedback. The clearer the goal, the more motivating it is.
Reasons why goals work are that they:
Individuals can set personal or career goals while firms can guide the goal setting to match corporate objectives. HR can develop systems, via performance review and succession planning, whereby employees’ and the firm’s goals are ever better matched. I suspect that this occurs less often than it should.
Management by Objectives
Management by Objectives is one application of goal setting, yet it is surprising that this technique has not been integrated into rank-and-file performance appraisal methods to a greater degree. Moreover, MBO too infrequently contemplates employee development. Creative and challenging goal setting can stimulate excitement.
One way that management consultants have advocated to formulate goals is SMART. That is, goals should be:
Rooting goals in time makes them more specific. Realistic goals can gain employees’ buy-in.
Over the past 17 years I have assigned a goal setting exercise to approximately 2,500 MBA and undergraduate students. The exercise involves the students’ development of a mission or visualization of what they would like to achieve in light of their personal values and a specific action plan. About one third of the students have considerable difficulty in expressing their mission and goals. Even when MBA students have been out of school for six or seven years and have achieved managerial levels of responsibility, it is difficult for many to “own” their career paths or to visualize achievements in which they believe. Only about a third of students can express a mission or visualization of what they aim to achieve in light of concrete values. Most students know that they want to make more money; move up in the hierarchy; or start a business. But few can express a tangible picture of what they would like to achieve or why.
In the early 1950s David Riesmann wrote Lonely Crowd in which he argued that Americans had become flexible about values, attitudes and career goals, that is, that they had become other directed rather than inner directed. But in the 1990s Stephen R. Covey emphasized the importance of goal setting in his classic Seven Habits of Highly Effective People. His first habit is “begin with the end in mind”. This speaks to inner directedness rather than other directedness. Moreover, Richard N. Bolles’s career building classic, What Color Is Your Parachute, emphasizes the importance of developing a mission and goals in building a career. It would seem that a mixture of inner and other directedness is optimal for success in today’s dynamic world.
Because our culture emphasizes fitting in as much as goal achievement, many CPA professionals, perhaps the more other-directed, have trouble setting goals. Nevertheless, such employees can be encouraged to adopt goals that fit corporate objectives and then internalize them. This may be desirable for employees who have not formulated goals on their own or have yet to commit to a firm’s culture, as well as employees who tend to be other- as opposed to inner-directed.
In other words, CPA firms might re-emphasize the importance of organizational culture and consider how culture and individual goal setting might be linked. The result might be magnification of performance and reduced turnover.
Likewise, employees have much to gain from enhanced commitment to their firms’ objectives. I frequently hear students express dissatisfaction with their career paths, even though they lack focus as to what they would like to achieve in life. Firms could enhance commitment among entry-level employees by inspiring and motivating them to think in terms of opportunities within firms. In other words, I am arguing for organizational cultures that better integrate corporate performance with individual career advancement.
In short, goal setting can effectuate a mental revolution among firms and employees.
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Mitchell Langbert, PhD, is an Associate Professor, Brooklyn College. Widely published on the subject of human resource management, Langbert has consulted and served as an expert witness.