Goal Setting OTB by siratiq


									Goal Setting Chapter 3                                      Page 1

                         Atiq ur Rahman siratiq@yahoo.com
Goal Setting Chapter 3                                                             Page 2


Goal setting relates to application of effective management practice. This theory is based
in cognitive approach. There has been considerable research both in laboratory and in the
field to test the theory. The theory has proved to be effective tool for the practice of
human resource management.

Goal setting is an application-oriented area of motivational psychology and
organizational behavior. Also called as Edwin Locke‟s goal-setting theory of motivation,
it emphasizes the important relationship between goals and performance for scientific

Intention plays an important role in human behavior. Edwin Locke accepts the
purposefulness of behavior and the importance of values or valence and consequences.
He says values and valences are deeply imbedded in emotions or desires. In addition to
these values, intentions, goals play an important role as cognitive determinants of
behavior. To Locke, people strive to attain goals in order to satisfy their emotions and
desires. Goals direct our behavior and guide our thoughts and action. The individual then
responds accordingly to the goals, even if the goal is not attainable.

Locke‟s theory is very similar to the other process theories. Recently he has given
attention to the role that commitment plays in the theory. Commitment to goals is must or
goal setting will not work. He defines commitment as one‟s attachment to or
determination to reach a goal, regardless of the goals‟ origin. He maintains that „goal
setting is simply the most directly useful motivational approach in a managerial context,
since goals are the most immediate regulators of human action and are more easily
modified than values of deep mental premises. It is this practical utility of goal-setting
theory that has made it an important contribution to the study and application of
organizational behavior.

                            Atiq ur Rahman siratiq@yahoo.com
Goal Setting Chapter 3                                                                  Page 3

Link between Goal-setting and performance

Locke‟s theory has generated considerable research. In particular a series of studies by
Locke and his colleagues have been carried out to test the linkage between goal setting
and performance.
The following practical guidelines are very sound in this respect.

           1. Specific goals are better than vague or general goals such as “do your
               best”. In other words, giving a salesperson a specific quota or a worker an
               exact number of units to produce should be preferable to setting a goal
               such as “try as hard as you can” or “try to do better than last year”.

           2. Difficult, challenging goals are better than relatively easy, mundane goals.
               However, these goals must be reachable and not so hard to attain that they
               would be frustrating.

           3. “Owned” and acceptable goals arrived at through participation, are
               preferred to assigned goals. Although the research is not as clear here as in
               the first two guidelines there is evidence that people who set their goals
               through a participative process, and who thus own their goals will perform
               better than those who are told what their goals are to be.

               Personal goals can lead individuals to career success.

           4. Objective, timely feedback about progress toward goals is preferable to no
               feedback. Although researchers are still trying to understand the exact
               effect of feedback it is probably fair to say the feedback is a necessary but
               not sufficient condition for successful application of goal setting.

The above four criteria are must that goals should have in order for them to improve

                           Atiq ur Rahman siratiq@yahoo.com
Goal Setting Chapter 3                                                                Page 4

MBO: The Application of Goal Setting to System Performance.

A logical extension of goal setting is the very popular, widely used Management By
Objectives, or MBO approach to planning, control, personnel appraisal and overall
system performance. MBO has been around for almost thirty years and thus preceded the
theory and research on goal setting per se. MBO is usually attributed to Peter Drucker,
who coined the term and suggested that a systematic approach to setting of objectives and
appraising by results would lead to improved organizational performance and employee
satisfaction. Today, practically every large business firm and a growing number of non-
business organizations have implemented some form of MBO.

MBO involves a series of systematic steps that follow a process. A review of these steps
will clarify the MBO approach.

1- Setting overall Objectives.
MBO takes a from-the-top-down approach. If MBO is implemented on an organization-
wide basis, the top management team gets together to formulate overall objectives. The
usual procedure is first to identify key-results areas in the organization. A key-result area
is one that has the greatest impact on the overall performance of the organization. It may
be sales volume or market share, production output, or quality of service. After the key-
results areas are identified, measures of performance are determined. Objectives are
always stated so that they can be objectively measured. Finally, the actual objectives are
agreed upon (usually with input from all members of the top management staff but with
final authority vested in the chief operating executive). These objectives are result-
oriented and are stated in objective, measurable terms with target dates and
accompanying action plans that propose how the objectives will be accomplished.

                           Atiq ur Rahman siratiq@yahoo.com
Goal Setting Chapter 3                                                               Page 5

After the overall objectives have been formulated .It is vital that the organization be
prepared to implement the system downward. What too often happens is that the
executive, or someone who is close to the executive, gets sold on the idea MBO. A memo
is sent out to all personnel saying that the organization was onto an MBO system next
Monday morning. This type of approach to implementation of MBO is a good way of
ensuring that the performance will not work. The people of the organization itself must
be developed so that MBO can be successfully implemented.

Once the overall objectives have been set and organization is developed to the point of
accommodating, an MBO System individual objectives are set. These individual
objectives are determined by the superior subordinate pair, starting at the top and going
down as far as the system is to be implemented.
The scenario for this process would be something like the following;
The boss would contact each of his or her subordinates and say. ; As you know; we ha ve
completed our MBO orientation and development programme, and it is now time to set
individual objectives. I would like you to develop by next Tuesday a proposed set of
objectives for your area of responsibility. Remember that your set of objectives should be
in line with organization‟s overall objectives, which you have a copy of, and they should
be able to contribute to the objectives that you interact with, namely, my objectives, the
other units‟ objectives on your same level, and your subordinates, objectives. Your
objectives should be stated in quantifiable, measurable terms and should have a target
data. I will also have some suggestions that you think should be given top priority for
your area of responsibility. We will sit down and have an open give-and-take session
until we reach a mutually agreeable set of objectives for your area of responsibility.

In line with the goal-setting research, these objectives should be specific, difficult, and
accepted. Like the overall objectives, this set of individual objectives should also be
accompanied by action plans developed to spell out how the objectives are to be

                           Atiq ur Rahman siratiq@yahoo.com
Goal Setting Chapter 3                                                                Page 6

So far, only the setting of objectives part of MBO has been discussed. However, these
objectives play a vital role in the feedback and appraisal part of MBO. Individuals will be
given feedback and will be appraised on the basis of how they perform in accordance
with the objectives that are set. This feedback and appraisal process takes place on both a
periodic (at least every quarter in most MBO systems) and an annual basis. The appraisal
sessions attempt to be diagnostic rather than purely evaluative. This means simply that
the subordinate‟s superior assesses the reasons why objectives were either attained or not
attained, rather than giving punishment or rewards for failure or success in meeting

Periodic reviews are conducted in order to provide feedback and evaluate progress
towards the attainment of objectives .They give the opportunity to make the necessary
changes in objectives. Every organization is operating in such a dynamic environment
that objective set at the beginning of the periodic (usually the fiscal year) may be
rendered obsolete in a few months because of changing conditions. Priorities and
conditions are constantly changing; these must be monitored in the periodic review
sessions, and the needed changes must be made. Constant revision of the individual
objectives and, to a lesser degree, of the overall objectives makes MBO a living system
that is adaptable to change. At the annual review session, an overall diagnosis and
evaluation is made according to results attained, and the system starts over again.

Some of the generally recognized strengths and weaknesses of the MBO system are
summarized. Such a list can serve as a beneficial guideline to more effective
implementation. However despite its widespread use and the relatively great amount of
research conducted on goal setting per se, there has been relatively little systematic
research on the impact of MBO.

                           Atiq ur Rahman siratiq@yahoo.com
Goal Setting Chapter 3                                                                        Page 7

Potential advantages and problems found in this technique are as follow.

 Potential Advantages                                        Potential Problems
 There can be improved short and long-rang MBO may be used as a whip,
 planning                                                    especially when it is closely tied to
                                                             wage and salary programs.
 MBO can provide a procedure for controlling MBO may fail to receive continual
 work progress and results                                   top management commitment and
 There can be improved commitment to the support and may not reach the lower
 organization because of increasing motivation, managerial levels.
 loyalty, and participation of employees                     There may be an overemphasis on
                                                             production and productivity.
 MBO can lead to improved clarity of the Managers may not be adequately
 manager‟s role and priorities.                              trained in the MBO process or
 There   can     be     improved        communication ineffective         ways to      coach and
 especially upward and horizontal.                           counsel subordinates
                                                             MBO may fail to provide adequate
 It is readily adaptable and can be used in personal                    incentives    to    improve
 conjunction     with     other     modern          human performance. The emphasis is only
 resources management techniques such as job on the benefits to the organization
 enrichment      and         organization      behavior and not on the development of the
 modification.                                               participating mangers.
 It   combines        good,     sound       management
 techniques       for          decision            making,
 communication,        and     control      with     basic
 behavioral requirements.

                               Atiq ur Rahman siratiq@yahoo.com
Goal Setting Chapter 3                                                        Page 8

Thus, once again there is not enough research on overall MBO system to draw any sound
conclusion. There seems little question that MBO holds enough promise to continue its
wide spread applications. Goal setting, feedback about performance, participative
decision making, open two way communication, and self-control are some of the very
positive characteristics of MBO. This unique combination makes MBO worthy of careful
consideration. Although there can be problems and although more research is needed,
MBO if carefully implemented and developed, seems to hold a great deal of promise for
management in the future.

                            Atiq ur Rahman siratiq@yahoo.com

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