Goal Setting
• “When you set a goal, you create something
and it becomes real. You write it down You
focus on it. You aspire to it, and that’s your
motivation.” (Scott Grocki: 167)
Effective Goal Setting
Techniques
• Consider the level of difficulty
– “More difficult” goals increase energy level
• Consider the level of specificity
– Specific goals increase your ability to focus and to
measure your progress
• Employee participation in the goal setting process
– Increases the level of acceptance and commitment
• Long-term and short-term goals
– Yearly, monthly, weekly, & daily
MBO: Cascading of Objectives
Organizational
Objectives
Divisional
Objectives
Departmental
Objectives
The XYZ Company
Consumer Products
Production
Sales
Customer
Service
Industrial Products
Marketing
Research
Development
Individual
Objectives
Prentice Hall, 2001
Chapter 7
3
Sears Auto Repair
• What went wrong?
– Why?
• What lessons should be learned?
Expectancy Theory &
Performance Issues
• Effort – performance relationship
– Training & education
• Performance – rewards relationship
– Will my performance be recognized & rewarded?
– How are rewards allocated?
• Seniority versus merit
• Is the evaluation process fair?
• Rewards – personal goals
– Is the reward personally desirable?
• “If you perform well, we will put you in charge of
our overseas office”
Open Book Management
• Background at SRC
– Extreme financial difficulties
– High level of distrust
– Employees wanted more challenge
• High in growth need strength (Job
characteristics)
Changes Implemented at SRC
• Sharing financial information
– Principle of job enrichment
– Trust
• Soliciting employee input
– Recognition
– Ideas are valued
• Bonus plans & employee stock ownership plan
– Financial incentives (short-term and long-term)
Outcomes at SRC
• Employees
– “When I first came here, I didn’t realize
that as a worker on the floor you could
have a direct impact on the profit.”
• Task significance (JCM)
– Pay attention to costs, quality, and time to
complete work
• Responsibility (Herzberg)
Employee Outcomes (cont.)
• Ideas are valued
• Recognition (Herzberg)
• New product
– Reading and understanding financial
information
• Skill variety (JCM)
• Growth (Herzberg)
SRC’s Financial Performance
• Growth
– Stock price
• From 10 cents to $18.60
– Employees
– Profitability
• Accuracy
– Inventory counts
Expectancy Theory
Individual
Effort
1
Individual
Performance
2
Organizational
Rewards
3
1. If I try hard, can I do it?
2. Do I need to perform at a high level to
receive rewards?
Personal
Goals
3. Are the rewards personally desirable?
Prentice Hall, 2001
Chapter 6
11