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Introduction

This paper discusses the goal-setting theory. The first part gives a short overview of the predominant approaches explaining motivation. Part two mainly discusses the core findings related to the goal-setting theory and in more detail the main factors influencing the goal-performance relationship. The third part gives both examples of its practical application and its limitations. Finally, a short conclusion is given. A short catalogue of the chronological sequence of theories positioning goal-like constructs can be found in the appendix.

Overview of Motivation Theories

Motivation is one of the most frequent researched fields in ‘Organizational Behavior’ (Ambrose & Kulik, 1999). There are numerous approaches that try to give explanations of motivation. On the one hand there are the “Need Theories” like the most well-known theory of motivation the “Hierarchy of Needs Theory”, the “Two-Factor Theory” , “Theory X and Theory Y”, the “ERG Theory” and “Theory of Needs” . On the other hand there are the cognitive evaluation theories like the “Reinforcement Theory” which can be divided into ‘classical conditioning’ and ‘operant conditioning’, the “Job-Design Theory”, the “Equity Theory”, the “Expectancy Theory”, and finally the “Goal-setting Theory” proposed by E. A. Locke in the late 1960s (Robbins, 2005).

Locke & Latham presented their first comprehensive statement of goal setting as a theory in 1990, in contrast to goal setting as a technique in 1984 (Latham & Pinder, 2005). The “Goal-setting Theory” (Locke, 1968) is one of the most efficacious and sound in organizational sciences (Miner, 1984), one of the few interventions in the behavioral sciences that has received almost unanimous support (Russel & Curtis, 2000), and one that provides one of the more powerful explanations of the dependent variable “motivation” (Robbins, 2005).

Core Findings

Numerous meta-analyses have been conducted on goal setting research: Results indicate that especially specific and difficult challenging goals improve a variety of performances (Locke, Shaw, Saari, & Latham, 1981; Mento, Steel, & Karren, 1987). Goal setting is considered important in improving employee productivity (Katzell &

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Guzzo, 1983), in improving academics results (Schunk, 1991), in rehabilitating injured athletes (Gould & Udry, 1994), in reducing burnouts (Savicki & Cooley, 1982), and in improving task performances of groups (Whitney, 1994). But what other factors besides specificity and difficulty affect the goal-performance relationship? The following important moderators have been found to influence this relationship: Feedback, goal commitment (with its two main categories importance and self-efficacy), task complexity (Locke & Lathman, 2002), and additionally national culture (Robbins, 2005). But before we discuss each of these factors in greater detail, one further important core finding made by goal-setting research must be mentioned: the high-performance cycle.

This cycle explains the lack of a direct connection between job satisfaction and subsequent productivity, a question that has long puzzled psychologists. (Latham, Locke, & Fassina, 2002). The high-performance cycle gives an explanation how high goals lead to high performance, which in turn leads to rewards, such as recognition and promotion. These rewards result finally in high satisfaction as well as high self-efficacy. Thus, in the high-performance cycle high job satisfaction is the result - and not the cause, of high-performance when performance and rewards are equally valued by the employee.

Factor Feedback

For goals to be effective, people need feedback that reveals progress in relation to their goals (Locke & Latham, 2002). Therefore, when people notice that they are below their planned goals, they normally increase their effort (Matsui, Okada & Inoshita, 1983). Thus, if they do not know how they are doing, it is difficult or impossible for them to adjust the level or direction of their effort or to adjust their performance strategies to match what the goal requires (Mento, Steel & Karren, 1987). Further research revealed that self-generated feedback has greater impact on motivation than externally generated feedback (Locke, 1996) and that especially positive feedback leads to improved self-efficacy and performance (Robin & Thorn 2001). To conclude, feedback is important for goal attainment, perhaps more for the informational aspects than the motivational ones (Austin & Bobko, 1985).

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Factor Goal Commitment:

Goal commitment refers to the determination to try to attain a goal and persist in the face of difficulties and is considered a pre-condition for goal-setting to impact performance (Diefendorff & Lord, 2003). Hollenbeck, Williams, and Klein stated that when the entire range of goals was present, commitment would moderate the relationship of difficulty and performance, but when only difficult goals were used, commitment would show a main effect (Hollenbeck, Williams & Klein, 1989).

Two key categories of factors facilitating goal commitment are the importance of goals to people (e.g. outcomes that they expect as a result of achieving the goal), and selfefficacy - the individual’s conviction that he or she is able to complete a specific task or goal (Locke, 1968). Both are positively related to goal performance (Locke & Latham, 2002). The importance can be increased when goals are made public, the individual has an internal locus of control, and when the goals are self-set rather then assigned (Robbins, 2005). Research clearly demonstrated that efficacy beliefs influence the level of motivation and performance. At the group level, group efficacy is consistently related to group performance (Erez, 2005). The level of motivation of individuals with high selfefficacy can be enhanced for example by both difficult tasks and even negative feedback. However, individuals with low self-efficacy are more likely to lessen their efforts regarding similar circumstances (Robbins, 2005).

Factor Complexity:

Research has shown that the motivational effects of goals are stronger when task complexity is low rather than high (Wood, Bandura, & Bailey, 1990). This is because performance of highly complex tasks depends not only on effort or persistence, but also on the cognitive understanding of the task and the strategy or plan necessary for completing it (Erez, 2005). Therefore goals seem to have more substantial effect on the performance when tasks are simple rather than complex, well-learned rather than novel, and dependent rather than interdependent (Robbins, 2005).

Factor National Culture:

The last key factor influencing the level of motivation is national culture, because “the goal-setting theory is culture-bound” (Robbins, 2005). Mainly in countries like the USA