When Gary Latham and Edwin Locke, psychologists from the Universities of Toronto and Maryland respectively, set out to study organizational goal setting in the 1960s, they expected to find what countless other studies on productivity had found - happy employees will be productive. Setting goals and targets, it seemed, would add stress, decrease happiness, and adversely affect productivity.

What their dozens of studies showed instead was startling. Organizational goal-setting could boost productivity up to 25%, or as one Forbes’ writer put it, “if an eight-hour day is our baseline, that’s like getting two extra hours of work simply by building a mental frame (aka a goal) around the activity.”

Put another way, an effective goal-setting framework is like growing your workforce from 100 diligent team members, to 125 - without any interviews, hiring, or incremental spend! 25 free team members. What’s more, recent Mckinsey research suggests that effective goal setting “can improve [team member] commitment materially and help clarify an employee’s role – the single biggest driver of organizational health.”

" an effective goal-setting framework is like growing your workforce from 100 to 125 "

So this all probably sounds straightforward - set goals, achieve outsized success! Leaving aside what setting a good goal looks like, there are conditions that assist even the best goals in growing to their potential.

In a 1981 paper¹, again by Latham, Locke, and colleagues, our intrepid researchers established some of the key conditions for goal-setting success. In a survey of studies, they found that key conditions dramatically improve task performance. Namely, as managers we must ensure:

1. Goals are specific and sufficiently challenging
2. Team members have sufficient ability
3. Feedback is provided to show progress in relation to the goal
4. Rewards are given for goal attainment
5. The manager is supportive
6. Goals are accepted by the team member

While that may seem like a laundry list of conditions, an effective goal-setting framework puts these conditions on autopilot, ensuring that employees can remain engaged with the work and managers can provide the critical inputs without missing a beat.

Does your organization set effective goals? Are there parts you feel you’re struggling with? We’d love to hear from you!

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¹ Locke, Edwin A. et al. "Goal Setting And Task Performance: 1969-1980.". Psychological Bulletin, vol 90, no. 1, 1981, pp. 125-152. American Psychological Association (APA), https://doi.org/10.1037/0033-2909.90.1.125.

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