In 1960’s, Edwin Locke put forward
the Goal-setting theory of motivation.
This theory states that goal setting is
linked to task performance & Specific
and difficult goals with feedback
lead to higher performance
Goal Difficulty and Performance
Features of Goal-setting theory
Goals Need to Be Specific
Goals Must Be Difficult but Attainable
Goals Must Be Accepted
Feedback Must Be Provided on Goal Attainment
Goals Are More Effective When They Are Used to
Deadlines Improve the Effectiveness of Goals
Characteristics of Effective Feedback
Eventualities of Goal setting theory
Self-efficiency- Self-efficiency is the individual’s
self-confidence and faith that he has potential of
performing the task. Higher the level of selfefficiency, greater will be the effort.
Goal commitment- Goal setting theory assumes
that the individual is committed to the goal and will
not leave the goal.
The goal commitment is dependent on the following factors:
Goals are made open, known and broadcasted.
Goals should be set-self by individual rather than designated.
Individual’s set goals should be consistent with the
organizational goals and vision.
Advantages of Goal Setting Theory
Goal setting theory is a technique used to raise incentives for
employees to complete work quickly and effectively.
Goal setting leads to better performance by increasing
motivation and efforts, but also through increasing and
improving the feedback quality.
Limitations of Goal Setting Theory
Very difficult and complex goals stimulate riskier behavior.
If the employee lacks skills and competencies to perform
actions essential for goal, then the goal-setting can fail and
lead to undermining of performance.
There is no evidence to prove that goal-setting improves job
Dr.Edwin Locke and Dr.Gary Latham (1990)
Dr. Lock & Dr. Latham joint published ..”A Theory of Goal
setting & task performance” in 1990.
This book says the importance of setting specific & difficult goals.
It included there are five (5) fundamental principles that lie
behind effective goal settings.
Locke and Latham provide a well-developed goal-setting theory of motivation.
The theory emphasizes the important relationship between goals and
Research supports predictions that the most effective performance seems to
result when goals are specific and challenging, when they are used to evaluate
performance and linked to feedback on results, and create commitment and
The motivational impact of goals may be affected by moderators such as ability and
A learning goal orientation leads to higher performance than a performance
Group goal-setting is as important as individual goal-setting.
Hasso Plattner Co-founder of the German software firm SAP,
motivates employees by setting stretch goals. Platter set a shockingly
optimistic goal of 15 % annual growth for SAP software license revenues.
Employees responded by achieving an even higher growth of
Plattner set another stretch goal, of by announcing a bonus plan that
would pay $381 million to hundreds of managers & key employees ..if
they could double the company's market capitalization from a starting
point of $57 billion by the end of 2010.
Employees responded again by increasing the market
capital double within the given time.
....For Plattner setting stretch/higher goals was a
way to inject entrepreneurial energy into a 35 years old