One of the most powerful ways to enhance performance and drive success is through the effective use and alignment of goals. In this article, we’ll be taking you through the science behind goals at all levels of the organization.
What are goals?
Locke & Latham, two of the most prolific authors of goal-related research, define goals as “the object or aim of an action, for example, to attain a specific standard of proficiency, usually within a specified time limit.” Similarly, Merriam-Webster succinctly defines a goal as “the end toward which effort is directed.”
Why are goals important?
Goals drive performance. But how exactly? There are actually several mechanisms at work (Locke & Latham, 2019), including:
- Clarity & focus: Goals help focus attention and effort toward high-priority activities and away from those that are irrelevant. They also clarify what success looks like and create transparency on how performance will be measured.
- Motivation & persistence: Goals act as an energizing function, prolonging the effort people are willing to make (LaPorte & Nath, 1976), and enhancing willingness to work intensely if timelines are tight (Bryan & Locke, 1967).
- Knowledge & skill optimization: Goals act as a trigger to implement task-relevant knowledge along with strategies and planning for how to achieve them. When a person or team doesn’t have the requisite skills to achieve an outcome, goals act as a forcing function to acquire that skill (Seijts & Latham, 2001) or identify strategies to work around that gap.
Levels of goals
You can create goals at multiple levels within the organization from the company overall to the leaders of departments, down to individual team members. Here we’ll discuss the unique benefits of each.
Your company goals are your north star that everyone is working towards. At the highest level, companies that implement and align goals benefit in several ways: operating margins and profitability improve, teams and leaders are quicker to execute on strategy, and employee turnover decreases (Workforce Intelligence Institute & SAP, 2006). Learn how to add a company goal here.
Underneath company goals, you have mid-level goals like department goals. This is where a group of hierarchically aligned employees (whether a department or smaller) can set goals about their strategy for helping the company achieve its goals. Kleingeld et al. (2011) found that specific, difficult goals produce significantly higher group performance. Group goals also enhance collaboration by providing clarity on expectations, ownership, and purpose. Further, in a 2014 Stanford University study, having goals and a collaborative sense of purpose were found to not only improve understanding of group success criteria but also enhance information flow and decision making quality. To empower your managers and leaders to create department goals, assign them as a department goal creator.
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Finally, individual goals help to align the employee’s efforts and give them something to work towards. Schmidt (2013) demonstrated that, given an average salary of $50,000, the typical increase in employee productivity as a result of setting goals equates to $9,200. Further, employees who set specific, challenging goals not only produce more and get better performance ratings, they also express higher levels of satisfaction with performance appraisal processes (Brown & Latham, 2000).
Getting the most out of goals
Just understanding the science behind goals is one piece of the puzzle. To get all of the benefits of goals, including productivity, motivation and satisfaction, you need to craft exceptional goals. We discuss how to do just that in our Guide to create and update goals.