Goals

Recently there has been some controversy around offering monetary incentives for meeting goals, spearheaded by Dan Pink, author of Drive.  The gist is that monetary incentives linked to goals block creativity and therefore only produce the desired outcomes for simple mechanical tasks. 

While it’s true that people tend to focus on the carrot (or the stick), and that this can lead to unanticipated results, it’s important to distinguish between what works and what doesn’t when it comes to goal setting.

Google offers an impressive example of ‘What Works’, setting outrageous goals every 90 days and for the most part meeting them.  How do they do this?

• Failure is (sort of) an option – Google employees are expected to keep trying solutions until they have the answer.  The solutions that don’t work along the way are not considered failures, just milestones on the way to finding a solution that does work.  Additionally, achieving 80% of an impossible goal is regarded as better than achieving 100% of a tame, modest goal.

• They hire the right people – Google has legendarily rigorous hiring practices.  I recently stumbled across a chat room in which someone commented that there’s no point in applying at Google because if they want you they already know how to find you. This is probably exaggerated but certainly makes an interesting point.

• They give people tools to succeed – Google doesn’t set crazy goals then nickel and dime the people trying to meet them.  They invest heavily in giving people what they need to be successful.

• Employees enjoy creative freedom – Google employees have a great deal of autonomy when it comes to finding solutions.  People are encouraged to feel personal responsibility for solving problems.

• It’s not (just) about the money – Success is generously rewarded but Google also provides a work environment where people are encouraged to try new things, control their own work and develop expertise.  In fact, it's very much in line with what Dan Pink has been saying about intrinsic motivation, only with the monetary reward as well.

I selected GM as an example of ‘What Doesn’t Work’ when it comes to setting goals, although I felt a bit bad about this since they’ve arguably been picked on enough for their unfortunate 29 program.  About a decade ago, GM set a goal to recapture 29% of the American car market, which industry analysts have speculated did more damage to GM than anything else.  Why?

• They put all their eggs in one basket – GM’s narrow, inflexible goal caused employees to develop a narrow, inflexible perspective of their work.  Essentially, they set a single flawed goal then pursued it to the exclusion of common sense. 

• They were trapped by short-term thinking – GM executives were so caught up in meeting short-term financial results that they ignored long-term strategic problems, such as the need to design better cars.   

• They focused myopically on the goal - In an effort to meet the 29% market share goal, GM employees offered deep discounts and interest free loans to move less popular models out the door, lowering profit and compromising GM’s ability to deal with future problems.  Individuals pursuing individual rewards for meeting the company goal did not act in the long-term interest of the company.

• Failure was not an option – As history has shown, GM was not equipped to deal with failure. 

For the most part, people want to learn and be be successful at work.  In a well-functioning company where this is supported, goals can help push the envelope when it comes to achievement. But setting goals is not a panacea for achieving great results, nor is it a substitute for functioning well.

*Picture courtesy of The Millionaire Secrets.

Laura Schroeder is the Product Manager for Compensation Solutions at Workday, headquartered in Pleasanton, CA.  She has more than twelve years of experience designing, developing, implementing and evangelizing Human Capital Management (HCM) solutions in the US, Asia and Europe.   Her articles and interviews on HCM topics have been published in national and European trade journals.  She currently lives in Munich, Germany and enjoys reading, writing and spending time with friends and family.  

Comments

[Amy Wilson]

Great article, Laura! This captures the importance of intrinsic motivation in setting goals. I think there's a lot to learn from this motivation research - and finding more practical examples, as you have done - is the best way to make sense of it all.

[JD]

Laura,

You hit the mark again! Thanks.

JD

[Carla]

Laura,

You said some positive things about Dan Pink. I'm surprised that you weren't pounced upon by the webmaster and sent to the anti-Pink website for brainwashing.

Carl

[Laura Schroeder]

Amy - Thank you for your great insights.

JD - Thank you!

Carl - LOL. Who said I wasn't? ;-)