A goal is simply a ‘desired state’ in the future. Goal setting is an integral part of achieving any objectives and occurs in all walks of life. Ranging from organisational to personal life, goal setting helps us work towards what we as individual’s or collectively would like to achieve.

Therefore most people set personal goals or organisational goals or both. “Goals are an essential part of successfully conducting business and living a rewarding life. Well-defined goals allow you to choose, design and implement important targets (objectives) necessary to achieve overall desired result (mission)” Rouillard (2002).

Goal-setting has an impact on both our personal lives as well as our professional lives meaning that a paper on Goal-setting could cover a broad range of issues. This paper aims to provide a summary of the theory that has been developed to explain how and why goal-setting works, as well as a review of the practical issues involved in actually using goal-setting successfully. However, we will specifically examine the Goal-setting theory and its impact on organisations today.

In order to do this effectively, the paper will also discuss the various types of Goal-setting techniques and the difference between performance goals and learning goals.To reach a destination, one needs to know where they are starting from. Where you are right now and how you arrived at this point can give a clue as to where you want to be in future.

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A common view is that the mind is an amazingly powerful and complex mechanism which will respond well to some approaches and will resist some with all its might. Setting goals helps the mind clarify one’s vision of where they want to be and to resolve any doubts and uncertainties.Today, goal-setting theory has become a subject of vast interest, not only for those studying organizational psychology, but for anyone seeking to increase productivity, enhance performance and reach for greater heights of success. What does research say about goal-setting theory? This theory is now well established having been researched thoroughly in the 1970s and 1980s and reviewed by Edwin Locke and Gary P. Latham in 1990. The most fundamental conclusions reached about the goal-setting theory were that difficult goals lead to higher performance than easy goals as long as they have been accepted by the person trying to achieve them.Specific goals lead to higher performance than general ‘do your best’ goals because they seem to create a precise intention which in turn helps individuals shape their behaviour with precision. Feedback is essential if the full performance benefits of setting difficult goals are to be achieved through its motivating properties.

The successful effects of goal-setting depends largely on an individual’s goal commitment; i. e. their determination to try to achieve the goal and unwillingness to abandon or reduce it, (Locke and Latham, 1990).Tasks in the real world are dynamic and evolving.

These changes often occur without warning or are caused by agents outside one’s control. It has been established that goal-setting has a powerful impact on performance in these settings. Goals fall into two categories; Performance goals (results oriented) and Learning goals (focused on lessons learnt).

Mone and Shalley (1995) conducted a 3-day trial on multiple performances and found that in focusing on goal attainment, people appeared to be spending more time thinking about how to perform well rather than actually performing well.Worse still, the dysfunctional effects of a specific high goal increased over the three-day period while the performance of those with ‘do your best’ goals became increasingly better. Mone and Shalley reported that this finding highlights the difference between mindlessly changing strategies (focus on achieving) versus searching systematically for effective ones (focus on learning). Judging from this result we support the view that while setting goals is important, setting an outcome goal – rather than a learning goal — can have a negative impact on an individual’s performance.Independent of Mone and Shalley and with no knowledge of their findings, Dawn Winters and Gary Latham (Winters and Latham, 1996) found that urging people to do their best led to higher performance than setting a specific high performance goal.

This is because a performance goal draws attention to the end result while a learning goal draws attention away from the end result. This view is supported by Frese and Zapf (1994) who established that high performance is not always the result of sheer effort and persistence; it is also the result of cognitive understanding of the task as well as the strategy necessary to complete it.It is therefore safe to say that while performance goals may diminish one’s confidence and deplete their self-esteem, learning goals encourage one to view failure as an opportunity to learn. Further research in later studies confirmed the type of goal can determine the end result and that it was better for individuals to set learning goals rather than performance goals.

As Gary Latham (2006) wisely put it, “A performance goal can lead to a highly unsystematic “mad scramble” for solutions. This explains why for example a student or employee with a learning goal has a higher commitment to their goal than one with a performance goal.