Setting Too Many Stretch Goals Can Backfire on Managers

Decades of research have supported the idea that specific, high goals boost productivity (pdf) by getting people to work harder, be more persistent, and and perform better.

But financial quarters inevitably end and projects finish, which means that there’s always another difficult target or near-impossible deadline to achieve. Stacking high goals on top of one another can lead to depletion, reduced self-regulation, and unethical behavior, according to a new study (paywall) published in the Journal of Organizational Behavior and Human Decision Processes.

The research is the first to tie consecutive goal setting, psychological depletion, and ethics together, which matters since unethical behavior can cost businesses billions every year.

The authors tested high, low, increasing, decreasing, and “do your best” goals on a group of 159 undergraduates performing a series of tasks for a monetary reward. High performance goals produced more cheaters, an effect which increased with the number of consecutive goals. Starting with a stretch goal, even if it decreased in later periods, boosted depletion and unethical behavior at a higher rate as well.

Past research on goal-setting informs the way that many firms manage and measure employees. Companies like Google and LinkedIn follow the objectives and key results method, a management system pioneered by Intel where specific, measurable goals are deliberately set at a difficult level.

The other side of improved productivity and performance that results from high goals is an inability to make good decisions, the authors write. When you combine depletion with pressure, and do it over and over again, unethical behavior increases. In other studies, high goals alone have been shown to increase unethical behavior.

Exactly how managers should respond to this research is uncertain. For starters, managers should think about scaling goals up from a relatively low starting point, and avoid clustering stretch goals too close together without a break. But low and poorly-defined goals reduce performance, so more work needs to be done in finding a middle ground.

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