Goal-Setting Theory

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Goal-setting Theory and its Effective Application

According to the book Organisational Behaviour on the Pacific Rim (2007), motivation is the “forces within a person that affect his or her direction, intensity and persistence of voluntary behaviour in the workplace”. This means that compared to a non-motivated employee, a motivated one is willing to consistently (persistence) give more effort to their job (intensity) to achieve the desired goal or goals (direction). Today, motivating employees is important and has become more challenging for employers due to the fact that an engaged workforce result in greater performance, productivity and success for the business. This is why many managers want to find ways on how to motivate their subordinates so that the employees are willing to contribute to the firm with full potential as it will affect the corporate performance. In order to motivate subordinates effectively, managers need to have a better understanding of motivation which is why there are numerous theories that try to explain the term. Motivation theories can be grouped into two types, the “Need Theories” and the cognitive psychology evaluation theories. The “Need Theories” are the “Hierarchy of Needs Theory”, the “Theory X and Theory Y”, the “Two-Factor Theory”, the “Four-Drive Theory” and lastly the “ERG Theory”. Whereas for the cognitive evaluation, there are the “Job-Design Theory”, the “Reinforcement Theory”, the “Expectancy Theory”, the “Equity Theory and finally the “Goal-setting Theory suggested by E.A Locke, which will be discuss in detail in this essay because this theory has become the most effective and widely used motivational tool that has been supported with many years of empirical research (Barsky 2008).

In 2003, Goal-setting is rated by organizational behaviour scholars as number one in importance among other seventy three management theories (Smith and Hitt. 2005). Goal-setting theory (Locke & Latham. 2002) was build inductively over a 35- year period in the industrial and organizational psychology based on 400 laboratory and field studies. This theory is based on Ryan’s thesis in 1970 where conscious goals affect action (Locke and Latham. 2002) therefore Locke and Latham began investigating about the possible impact of goals on individual performance. This theory has high level of validity and it is effective for individuals, groups and organizations (Locke and Latham. 2006).

According to Locke (1978) this theory is “recognized explicitly or implicitly by virtually every major theory of work motivation”. “Scientific Management” and “Management by Objectives” (MBO) theories has absolutely recognized the significance of goal-setting in theory and practice. At first, goal-setting was denied in “Valence- Instrumentality- Expectancy” (VIE) and “Human Relations” theories but was later acknowledged. Lastly, goal-setting theory has been persistently refused in “Organizational Behaviour Modification” (OB Mod) and “Job Enrichment” theories because they do not agree with it theoretically but has implicitly acknowledge it in practice. (Locke. 1978)

Based on many meta-analyses of goal setting research, researchers such as Mento, Steel and Karren (1987), Tubbs (1986) and Locke, Shaw, Saari and Latham (1981) came to an agreement that difficult to achieve, specific and challenging goals improves performance rather than easy or unclear goals such as “do your best”. For example, an employee will feel more challenged and put in more effort when his manager requires him to sell 100units of computers in one month rather than having his boss only urging him to do his best.

Based on other relevant literature about goal setting, McShane and Travaglione (2007) defined goal setting as the “process of motivating employees and clarifying their role perceptions by establishing performance objectives”. Similarly to Locke and Latham’s goal-setting theory, for both McShane and Travaglione goal setting has the...
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