How Goal-Setting Theory Can Work for Management

In 1960’s, Edwin Lockc put forward the Goal-setting theory of motivation. This theory states that goal setting is essentially linked to task performance.

It states that specific and challenging goals along with appropriate feedback contribute to higher and better task performance.

In simple words, goals indicate and give direction to an employee about what needs to be done and how much efforts are required to be put in.

5 Importance Features of Goal Setting Theory

  1. The willingness to work towards attainment of goal is main source of job motivation. Clear, particular and difficult goals arc greater motivating factors than easy, general and vague goals.
  2. Specific and clear goals lead to greater output and better performance. Unambiguous, measurable and clear goals accompanied by a deadline for completion avoids misunderstanding.
  3. Goals should be realistic and challenging. This gives an individual a feeling of pride and triumph when he attains them, and sets him up for attainment of next goal.The more challenging the goal the greater is the reward generally and the more is the passion for achieving it.
  4. Better and appropriate feedback of results directs the employee behavior and contributes to higher performance than absence of feedback.Feedback is a means of gaining reputation, making clarifications and regulating goal difficulties. It helps employees to work with more involvement and leads to greater job satisfaction.
  5. Employees’ participation in goal is not always desirable. Participation of setting goal, however, makes goal more acceptable and leads to more involvement.

Goal setting theory has certain eventualities such as:


Self-efficiency is the individual’s self-confidence and faith that he has potential -if performing the task. Higher the level of self-efficiency, greater will be the efforts pm in by the individual when they face challenging tasks.

While, lower the level of self-efficiency, less will be the efforts put in by the individual or he might even quit while meeting challenges.

Goal commitment

Goal setting theory assumes that the individual is committed to the goal and will not leave the goal. The goal commitment is dependent on the following factors:

  • Goals are made open, known and broadcasted.
  • Goals should be set-self by individual rather than designated.

Individual’s set should be consistent with the organizational goals and vision.

2 Advantages of Goal setting Theory

  1. Goal setting theory is a technique used to raise incentives for employees to complete work quickly effectively.
  2. Goal setting leads to better performance by increasing motivation and efforts, but also through increasing and improving the feedback quality.

Limitations of goal setting theory

  1. At times, the organizational goals are in conflict with the managerial goals. Goal conflict has a detrimental effect on the performance if it motivates incompatible action drift.
  2. Very difficult and complex goals stimulate riskier behavior.
  3. If the employee lacks skills and competencies to perform actions essential for goal, then the goal-setting can fail and lead to undermining of performance.
  4. There is no evidence to prove that goal-setting improves job satisfaction.

Five Principles of Goal Setting

To motivate, goals must have:

  1. Clarity.
  2. Challenge.
  3. Commitment.
  4. Feedback.
  5. Task complexity.

Let’s look at each of these in detail.


Clear goals are measurable and unambiguous.

When a goal is dear and specific, with a definite time set for completion, there is less misunderstanding about what behaviors will be rewarded. “Reduce job turnover by 15%” or “Respond to employee suggestions within 48 hours” are examples of dear goals.


One of the most important characteristics of goals is the level of challenge. People are often motivated by achievement, and they’ll judge a goal based on the significance of the anticipated accomplishment.

Rewards typically increase for more difficult goals. If you believe you’ll be well compensated or otherwise rewarded for achieving a challenging goal that will boost your enthusiasm and your drive to get it done.

If an assignment is easy and not viewed as very important – and if you or your employee doesn’t expect the accomplishment to be significant – then the effort may not be impressive.


Goals must be understood and agreed upon if they are to be effective. Employees are more likely to “buy into” a goal if they feel they were part of creating that goal.

The notion of participative management rests on this idea of involving employees in setting goals and making decisions.


In addition to selecting the right type of goal, an effective goal program must also include feedback. Feedback provides opportunities to clarify expectations, adjust goal difficulty, and gain recognition.

It’s important to provide benchmark opportunities or targets, so individuals can determine for themselves how they’re doing.


The last factor in goal setting theory introduces two more requirements for success. For goals or assignments that arc highly complex, take special care to ensure that the work doesn’t become too overwhelming.