In 1953 a study took place at Harvard University that dramatically highlights the importance of goal setting in achieving and maximising potential (Graham, 1999). The study asked a group of students as they graduated about their goal setting behaviours, and then tracked these individuals over the next 20 years. In 1953, only five percent admitted to having clear, written, well-defined goals for their future careers and lives, but astonishingly by 1973 those five percent were worth more in financial terms and other areas than the other 95 percent put together (Graham, 1999). The above example shows that goal setting can have a huge effect on future performance, and this research essay will discuss the success of goal setting in organisations. Firstly this essay will outline the purpose of goal setting in organisations and the theory behind goals, and secondly will provide a discussion and examples of how goal setting can contribute to organisational success.

Goal Setting Theory is largely associated with Edwin Locke, who defines a goal as “what an individual is trying to accomplish; it is the object or aim of an action” (Krietner & Kinicki, 2001, p. 25

Goals affect performance by ‘directing attention and action mobilising effort and motivating individuals to develop goal-attainment strategies (Locke, Shaw, Sari & Latham, 1981). According to Locke’s model, goal setting has four motivational mechanisms (Locke & Latham, 1990). Firstly, goals direct attention. That is, they focus an individual’s attention on the relevant and important actions. Secondly, goals regulate effort. By having a timeframe for completion of a goal, they prompt the individual to complete the goal. Thirdly, goals increase persistence, that is, the extent to which effort is expended on a task over time. For example, Steven Spielberg is someone who persisted at his goal to become a Hollywood director. He identified his goal early in life, and overcame several obstacles along the way in order to pursue his dream. He is now one of the most successful filmmakers in Hollywood (Krietner, 2001). Lastly, goals foster strategies and action plans. By having a laid out goal, an individual can devise how best to get from the place they are now to the place they want to go. These four motivational mechanisms can all be applied to organisations.

Locke’s theory of goal setting deals with the relationship between conscious goals or intentions and actual performance (Latham & Yukl, 2001). According to Locke, goals have the following four properties: Firstly, Difficulty. That is, the extent to which an individual sees the goal as challenging but achievable. Secondly, Specificity, which is the extent to which the goal is defined and therefore understood. Thirdly, Acceptance, that is the degree to which the individual accepts the goal as one that they would like to achieve. The last property is Commitment, where the individual is committed to achieve the goal and will carry out actions to reach this goal (Katzenback & Smith, 1993).

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