People and organizations have always emphasized the goal-setting topic because of its contribution to success. Goal setting is important in all life facets whether this concerns personal development goals, financial targets, or production objectives. Most organizations, however, are unknowingly using the theory. Since its formalization nearly 50 years ago, researchers have extensively investigated the theory of goal setting. The theory reveals an inductive association between setting goals and enhanced performance. Setting goals entails consciously establishing performance levels to reach desirable results. The theory suggests that the desire and intention to achieve a goal is the main source of motivation.
The purpose of the present review paper is to outline the evolution of the theory of goal setting by examining early research on the topic and their major findings including their contributions to the theory. From there, the paper will examine recent trends about the theory to investigate how the goal-setting domain has transformed from the early individual level to include goal setting in the context of the team and organizational levels. The paper will then offer future implications regarding the evolution of the theory.
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Work in most organizations has changed due to trends such as the emergence of decentralization and horizontal organizations. Most organizations today encourage people to work in teams. While the theory of goal setting has been studied extensively, the focus has been mainly on individual goal setting among employees. Identifying the trends in goal setting research to address these changes is vital.
The present paper explores the evolution of the theory of goal setting by reviewing the major research trends and findings regarding the topic and the current trends and future directions concerning the theory.
Major Research Trends and Findings
Goal Setting
Before investigating the evolution of the theory, it is vital to understand the meaning of goal setting. According to Carper (2015) goal setting refers to the process of determining something that a person desires to attain before achieving it using measurable timeframes and targets. The key goal setting elements include goal commitment, goal difficulty, and goal specificity (Locke & Latham, 2002). People normally fail to perform effectively when they focus on doing their best instead of focusing on a specific goal because Locke and Latham (2002) state that specifying the goal leads to greater performance. Goal setting also requires a sense of commitment, particularly when focusing on difficult and specific goals since difficult goals to achieve will need extra effort compared to simple goals.
Early Work
Locke (1968) originally published an article in 1968 regarding the theory of task motivation and incentives. Since that time, both Locke and Latham continued studying the domain to enhance the relevance of the theory before finally formalizing the theory of goal setting in 1990 (Locke & Latham, 1990). Locke and Latham (2002) state that the goal-setting theory emphasizes the characteristics of the ability of effective goals to predict, describe, and influence performance. Goal setting theory is based on two main findings, which are a linear association between goal strain and performance and the relationship between difficult and specific goals with performance. Regarding the linear relationship, the theory suggests four moderators, which are resources, commitment, feedback, and ability to influence the linear relationship linking goal strain and performance. Based on the theory, high goals lead to improved performance and performance reduces or levels off only when individuals reach the limits of their abilities or their commitment ends (Locke & Latham, 2002). Concerning the second suggestions, Locke and Latham (2002) argue that challenging and specific goals result in improved performance than the absence of goals or the presence of abstract and vague goals such as “do your best.” The specificity of the goal itself does not result in improved performance in all cases since each specific goal has a different difficulty level.
Employee Motivation and Performance
Since the theory of goal setting is regarded to be a theory of motivation, most studies focused on investigating goals in the context of employee motivation and performance (Locke & Latham, 2002). The basis of the theory supported the idea that challenging and specific goals contributed to improved performance (Locke & Latham, 1990). Ivancevich (1976) suggested that managers in the organization work with their workers and engage them throughout the process of defining individual goals. Employees feel valuable when using this inclusive strategy because it makes them to consider themselves as a vital part of the business, which compels them subconsciously to own the goals due to their participation in developing them. Even though studies highlight the importance of engaging workers to meet goals, other studies also emphasize the importance of properly training workers in goal setting. According to Locke and Latham (2002), employees must understand how to set difficult and specific goals that will promote improved performance if they must participate in the process.
Other studies highlight the importance of self-regulation in people when setting goals. Klein (1991) argues that individuals focus on achieving their goals and will modify their behaviors as necessary to reach the required outcome. Latham and Locke (1991), however, state that self-regulation skills vary from individual to individual. As an example, some people need less supervision and can modify their performance as required to achieve their goals while others need regular guidance and supervision to reach their goals effectively. Locke and Latham (2002) propose that all people can learn self-regulation skills through proper training. Latham proposes four mediators that describe why difficult and specific goals contribute to high individual performance.
The first mediator is that specific goals involve the decision to act through which a person focuses on the task with a purpose or direction in his work. Secondly, difficult and specific goals stimulate effort in which individuals expend more effort on more difficult and specific goals. Thirdly, people demonstrate persistency when pursuing a goal after setting a difficult and specific goal. Fourth, when people set a challenging and specific goal, the act cues their existing approaches to achieve the goal. The theory of goal setting originally supported difficult and specific goals given the then evidence regarding the effectiveness of these types of goals compared to the presence of vague goals or the absence of goals (Locke & Latham, 2013). The theory has, nevertheless, evolved in different significant ways since its formalization in 1990.
Learning and Performance Goals
The most significant finding after 1990 according to Locke and Latham (2015) was the differentiation between learning goals and performance goals. Originally, the theory of goal making emphasized the comparison between difficult and specific goals and “do your best” goals (Latham & Locke, 1991). Locke and Latham (2013) argued that do your best goals worked better than hard and specific goals concerning complex tasks. Seijts and Latham (2005), however, state that do your best goals are inferior to challenging and specific goals. Since the formalization of the goal-setting theory, nevertheless, studies found that learning goals were more successful than performance and do your best goals concerning complex roles (Drach-Zahavy & Erez, 2002). Locke and Latham (2013) propose that while both learning and performance goals must be difficult and specific, researchers must differentiate between the two goals and set each goal type in appropriate contexts only.
The difference between the two goals emerges mainly due to the emphasis of the person during task implementation. For instance, Tasa et al. (2013) state that performance goals emphasize attaining specific tasks based on specific proficiency standards. Seijts et al. (2013) add that performance goals frame the instructions of the goal to ensure that a person focuses on the specific outcome of the task. The first formalized theory of goal setting indirectly referred to performance goals and highlighted the significance of setting specific goals. Locke and Latham (2015), however, define learning goals as the required number of procedures, processes, or approaches to master tasks. The study of learning goals began after the establishment of the theory of goal setting even though the theory integrates both learning and performance goals (Winters & Latham, 1996). While during the early stages of learning do your best goals resulted in improved performance compared to performance goals, studies have demonstrated that learning goals result in the highest performance levels (Winters & Latham, 1996). According to Locke and Latham (2013) one potential explanation for the failure of studies to obtain results consistent with the theory of goal setting particularly when participants were in the early learning stages concerns their failure to differentiate learning goals from performance goals. The major research trends and findings, thus, supported the idea that learning goals are better alternatives to performance goals than do your best goals.
Current Trends
According to Kramer et al. (2013) structural and cultural changes have influenced organizations over the past years in which organizations have transformed from hierarchical and top-down structures to flat and group and team-based structures. Instead of focusing on controlling the behavior of employees based on the hierarchy of the conventional organizational structure, decentralized organizational structures have emerged (Groeneveld & Kuipers, 2014). It is more common today to have self-managing teams that have individual roles and tasks because of decentralization (Kramer et al., 2013). The combined trends of guiding outcomes and decentralization have transformed organization. Initially, the theory of goal making offered individual level descriptions. The trend towards teamwork, however, has led to the emergence of studies that test the theory in team contexts. Studies on team performance show that goal setting is vital in achieving the required efficiency and effectiveness (Kramer et al., 2013). It is, therefore, important to examine this trend to gain more insights.
Team Goal Setting
Studies have shown that team goal setting leads to the establshing of goals at different levels and benefit the organization more by offering extra concrete and measurable metrics (Van Mierlo & Kleingeld, 2010). The ability to bring together teams allows the organization to establish individual objectives and team objectives that the individual will focus on as a team. the individuals’ performance contribute to achieving greater team goals while the probability of achieving effectiveness increases when organizations connect high-level goals or organizational goals to the employee or lower-level goals (Kramer et al., 2013). Wegge and Haslam (2005) however, argues that studies have not extensively examined how these goals can be set and which process organizations must follow to support alignment across all organizational levels.
While goals greatly contribute to organizational performance and success, it is unclear how organizations should design and create these goals. Some studies have demonstrated the importance of specific and challenging goals leading to effective teams and the importance of the same goals in enhancing individual performance (Kleingeld et al., 2011). Studies, nevertheless, do not demonstrate the process used in establishing the goals. Research has identified eight factors that influence team goal setting. They are individual differences, identity, leadership, team size, reward systems, organizational culture, goal type, and interdependence (Kramer et al., 2013). Organizations and lower-level teams should consider these factors when establishing goals.
According to Colquitt et al. (2000) individuals differ and are unique. The differences can positively or negatively affect the goals of the team when combined in a team setting. Additionally, individuals will have different organizational commitment or motivation levels or value the contribution of each team member differently. Besides, people possess individual identities and the team possesses collective identities. Kramer et al. (2013) refer to identity as the aspect of an individual self-concept that relies on membership to a group. The meaning of this is that people must identify with a team and the goals of the team to ensure maximum team performance. Kramer also argues that leaders can define the goals of their team and outline to the team how to accomplish the goals. The leadership style thus directly influences the team goal setting. Kramer continues by stating that the larger the team, the lower the effort and output of each member.
As a team increases, members begin believing that they cannot affect change. Individuals in a smaller team, however, are committed more to attaining the goals of their group due to their understanding of the way their performance contributes to the entire team (Hollensbe & Guthrie, 2000). According to Kramer et al. (2013), reward systems are related to individual goals. The reward system offers incentives for individual performance and they can be created to either benefit the entire team or each member. Pearsall et al. (2010) state that designing a reward system with a focus on a team reaching a specific objective and rewarding the entire team for its performance requires that the whole team works together. Seijts and Latham (2000) add that tying the reward system to the goal performance of each individual; however, motivate the workers to reach their objectives at the potential cost of the team goals. On the other hand, Kramer et al. (2013) suggest that a hybrid reward system that benefits both the team and individual performance can be cost-effective.
Another factor associated closely with the type of the goal is organizational culture emphasized within the organization. Kramer et al. (2013) state that if the organization encourages teams to work together and rewards cooperative behavior, teams will achieve goals fairly, ethically and without corruption. There are two types of team goals when it comes to the goal type. They are competitive and cooperative team goals (Kramer et al., 2013). Seijts and Latham (2000) demonstrate that cooperative goals are successful in team environments because they support collective work among team members to reach a shared objective and enhance collaboration. Competitive goals, however, inspire each team member to damage the team goals by focusing mainly on individual tasks and goals rather than the collective objectives. The final factor, interdependence, emerges as the main difference between team and individual goals. It entails the degree to which members of a team depend on each other to emphasize collective success. While the success of an individual goal depends entirely on the individual performance, team goals depend on the team performance as a collective unit. The current trend in goal setting is to focus on the application of the theory on team goals. In teams, goals concern the result that the team aims for while performance relates to the effectiveness and efficiency of the team based on the members’ experience.
Organizational Goal Setting
Another trend concerning the theory of goal setting is related to organizational goal setting. Past studies, as illustrated earlier concerning team goal setting, focused more on the individual level (Locke & Latham, 2013). Recent studies have begun examining team goal setting (Kramer et al., 2013). While in the past few studies examined goal setting at the organizational level, recent studies have begun examining organizational goal setting. Scholars have found the lack of studies on organizational goal setting to be surprising given the dominance of macro-level objectives within organizational processes such as resource allocation, strategy, and coordination and in strategic results such as stakeholder satisfaction and organizational performance (Young & Smith, 2013). According to Young and Smith (2013), macro-level objectives include organizational and divisional objectives.
Existing studies regarding organizational goals emphasize operational and non-operational goals. Young and Smith (2013) state that non-operational goals mainly focus on legitimizing the organization and are abstractly described and ambiguous with the main objective of encouraging workers to embrace the values and culture of the organization. Operational goals, however, focus on assisting the organization to measure effectiveness and performance. Brown and McCracken (2010) demonstrate that managers in organizations use distal and proximal goals when establishing their strategies for goal setting even though other managers use distal goals only. Distal goals are lasting and focus on outcomes while proximal goals are short term and focus on benchmarking. Managers typically break down distal goals into several proximal objectives to ensure feedback and clarity when achieving long term goals. Locke (pdfs-2004) cautions that organizations must overcome the possibility that any positive or negative occurrence in the organization when establishing goals at various levels will influence other individuals in the organization.
Organizations should integrate goals across the whole place, even though this may pose challenges. Studies show that while goal setting occurs at the organizational or team level, it is unclear how the goals are established and the involved processes. Consequently, Carper (2015) states that even though it is clear organizations have objectives and goals to stay competitive, most studies have focused less on the used processes to establish organizational goals but more on individual goal setting.
Future Directions
As the current trends in goal setting research and findings demonstrate, most studies on team goal setting and organizational goal setting focus more on the importance of goal setting in these contexts. Studies, however, do not specifically identify the goal-setting processes involved. Given these gaps, future studies should offer new views to better understand the involved goal setting dynamics at the team and organizational levels.
It is also vital for researchers to be aware that the theory of goal setting has transformed beyond performance goals as a single theory for various applications. Anyone adopting the theory should now consider both learning and performance goals together with the mediating and moderating factors for each type of goal. In turn, this will results in effective and appropriate goal setting that is less vulnerable to harmful effects. Additionally, the transformation of the theory leads to the necessity for a dynamic view to setting goals. For instance, individuals can use the learning goals during the early phases of learning new and complex tasks before gradually starting using performance goals.
Conclusion
The present paper reviewed past and recent research trends and findings regarding the theory of goal setting. The paper also explored future directions based on these reviews. Goal-setting theory has evolved over the past 50 years where scholars significantly examined the construct. Goal setting is crucial in all life facets because it contributes to performance improvement. During its formalization in the 1990s, the theory mainly focused on the importance of individual goal setting among employees. Main features of the theory during this time included the ability of goals to predict, describe, and affect performance. Two major findings included the linear relationship between goal strain and performance and the association between specific and challenging goals with performance. Moderators of the linear relation identified included commitment, resources, feedback, and the ability to affect the linear association connecting goal setting and performance. The formulation of challenging and specific goals led to improved performance.
Later studies focused on examining the theory and its applicability in employee performance and motivation. These studies were based on the concept of specific and challenging goals leading to greater performance. Involving employees in the process of defining individual objectives contributed to enhanced performance. Self-regulation skill was also vital when setting goals as this helped people to alter their behavior to achieve their goals. During this time, studies also determined mediators that enabled employees with specific and challenging objectives to perform highly. They are the decision to act, effort, persistency, and existing approaches. The theory later evolved to include learning and performance goals where learning goals were considered to be more effective than performance and do your best goals when dealing with complex tasks. The two goals differ mainly due to the focus of the individual. Performance goals focus on accomplishing roles based on specific standards while learning goals require several approaches, processes, or procedures to master a role.
Recent trends were also identified in which the theme regarding the transformation of organizations from top-down and hierarchical structures to flat and team-based structures emerged. In turn, this influenced the evolution of goal-setting theory from individual-based goal setting to team-based goal setting. The theory started focusing on team goal setting that entails establishing goals at various organizational levels. The theory also began focusing on organizational goal setting that involves making macro-level goals. A limitation of recent studies regarding team goal setting and organizational goal setting concerns the failure of the studies to examine the involved process when setting the goals. Future studies can, therefore, investigate the involved process when setting organizational and team goals. Additionally, the transformation of the goal-setting theory means that the focus now should turn to dynamic goals that integrate both learning and performance goals with their moderating and mediating factors.
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