Goals lay down targets to be achieved in future. They influence the behavior of employees and also their motivation. When the employees participate in goal setting, they see how their efforts will lead to performance, rewards and personal satisfaction. Thus, goals provide a sense of direction to the employees. Moreover, attainment of goals is rewarding as it helps to satisfy the needs of the employees and stimulates them to set higher goals for the future.
Edwin Locke studied the processes by which employees set goals for themselves and then put in efforts to achieve them. There are four elements of goal-setting model explained below:
1) Goal acceptance. The employees should understand the implications of goals for then and also accept them. If difficult goals are assigned to individuals, they may not feel attached to the goals. That is why , it is desired that the managers should follow a participative approach in setting the goals for the subordinates.
2) Goal specificity. A specific goal identifies the target in quantitative or measurable terms. This would enable the worker to evaluate his performance and judge as to how he is doing in relation to the goal. Meeting a goal provides the worker with a sense of achievement, pride and personal satisfaction. Specific goals reduce ambiguity and each employee gets a very clear idea as to what so expected of him. This results in improved performance.
3) Goal challenge. Difficult but feasible goals provide more challenge than easy goals. Reaching an easy target is not competitive and hence hardly exciting. This is particularly true for high need achievers. However, even the challenging goals must be achievable, given the capability and experience of the individual and the resources available,
4) Performance feedback. The employees, who have set challenging goals for themselves, need feedback about how well they are doing and how successful they are. Proper feedback can motivate them further. Performance feedback tends to encourage better job performance and self-generated feedback is an especially powerful motivational tool.
Goal setting theory proposed that challenging and specific goals are more likely to lead towards better performance. Proper feedback can sustain motivation further. In addition to feedback, two other factors have been found to influence the goals-performance relationship. These are goal commitment and self-efficacy. Goal-setting theory presupposes that an individual is committed to the goal; that is, is determined not to lower or abandon the goal. This is most likely to occur when goals are made public, when the individual has an internal locus of control, and when the goals are self-set rather than assigned. Self-efficacy refers to an individual's belied that he is capable of performing a task. If a person has higher self-efficacy, he would have greater confidence to succeed in accomplishing the goal. So, in difficult situations, we find that people with low self-efficacy are more likely to lessen their effort or give up altogether, while those with high self-efficacy are likely to try harder to master the challenge.