Chapter 8
Setting Goals
Learning Objectives
 Describe the primary goals of an organization
 Explain the principles and different types of goal plans
in an organization
 Outline different types of goals and the characteristics
that make them effective
 Illustrate how managers secure team-level
commitment to goals
 Construct action plans consistent with goals to achieve
individual-level performance
 Describe how managers track progress of goal plans
through performance dashboards
Management 1e
8- 2
Setting Goals that Make a Difference
(p. 202)
 Goals must be set within a strategic framework
consisting of mission, vision, and values
 Goals are important because they:
•
•
•
•
•
Give direction
Provide a sense of purpose and achievement
Reinforce our beliefs
Enable reaching our full potential
Boost our self-esteem
Management 1e
8- 3
Setting Goals that Make a Difference
(cont.)
 Smart goals (p. 204)
•
•
•
•
Specific – clearly defined goals help focus on the task
Measurable – inform about the extent of progress
Achievable – realistic and attainable
Relevant – consistent with the organization’s mission,
vision, and values
• Time-bound – provides a target for completion
Management 1e
8- 4
Setting Goals that Make a Difference
(cont.)
 When goals go wrong they (p. 207):
•
•
•
•
•
•
•
Involve excessive risk-taking
Increase stress
Create feelings of failure
Become a ceiling for performance
Ignore non-goal areas
Promote short-range thinking
Promote dishonesty/cheating
Management 1e
8- 5
Goal Plans (p. 209)
 Principles of goal setting
• Clarity – goals must be clear, specific, unambiguous,
measurable, and set within a time frame
• Challenge – people are motivated by difficult but attainable
goals
• Commitment – ‘buy in’ more likely when:
 The task and its outcomes are perceived to be important
 Goal achievement is perceived to be possible (p. 210)
• Feedback – clarifies expectations, assesses and adjusts (if
necessary) process, and recognizes good performance
• Task complexity – goals must be appropriate for complex tasks
 Appropriate resources (e.g., time and training) must be provided
Management 1e
8- 6
Goal Plan Types and Components
(p. 211)
 Business plan
• Interprets an organizational strategy into a marketor community-based opportunity for division or
departmental managers
• Budget – quantitative part of a plan that allocates
available financial resources
Management 1e
8- 7
Goal Plan Types and Components
(cont.)
 Standing plans (p. 211)
• Designed for repeated use in response to
commonly occurring events
• Policy – describes how an organization and its
members should respond to recurring or
anticipated situations
• Procedures – provides the specific steps to be
taken as part of a recurring process or in response
to a recurring situation
• Rules and regulations – formal descriptions of
how specific actions are to be carried out
Management 1e
8- 8
Goal Plan Types and Components
(cont.)
 Goal plans are essential ways of committing departments,
resources, and individuals to a future goal (p. 212)
 Directional plan
• General, flexible plan that provides guidelines for an organization’s
long-term goals
 Tactical plan
• Covers an intermediate time scale and enacts divisional strategies by
allocating people and resources
 Operational plan
• Guides the day-to-day production or delivery of an organization’s goods
and services, and which enacts a functional strategy
• Single-use plan – developed to achieve a particular goal or in response
to an event that is not expected to be repeated
 Option-based plan (p. 213)
• preserves flexibility in contexts of uncertainty by investing in several
alternative plans
Management 1e
8- 9
Goal Plan Types and Components
(cont.)
Management 1e
8- 10
Goal Plan Types and Components
(cont.)
Management 1e
8- 11
Effective Goals (p. 213)
 Types of goals
• Distal goals – primary or long-term goals (p. 214)
• Proximal goals – short-term goals that increase
individual’s ability to reach distal goals by providing
motivation and feedback
• Stretch goal – almost unattainable and requires the full
capacity of an individual, manager, team, or organization to
accomplish
 Means-ends chain (p. 215)
• Integrated series of goals in which the accomplishment of
lower-level goals contributes to the achievement of higherlevel goals
Management 1e
8- 12
Team Commitment (p. 215)
 Goal commitment
• Motivation and determination to achieve a goal
• Team members must share the organization’s vision
 Management by objectives (MBO; p. 217)
• Management and employees agree to specific goals
that are then used to evaluate individual performance
Management 1e
8- 13
Individual Performance (p. 217)
 Action plans
• Specific actions, people, and resources needed to
accomplish a goal
Management 1e
8- 14
How Managers Track Progress (p. 218)
 Performance dashboards
• Visual representation of an organization’s strategies and
goals, which allow managers to track progress toward
metrics and goals immediately
• Balanced scorecard – provided managers and information
system designers a balanced approach to developing
performance dashboards (p. 219)
 Augments traditional financial measures with nonfinancial areas:
 Company’s relationship with customers
 Key internal processes
 Learning and growth
 Key performance indicators (KPIs)
 Measurements that managers identify as vital to the company’s
performance
Management 1e
8- 15
How Managers Track Progress (cont.)
 Balanced scorecard
Figure 8.2
Management 1e
8- 16
How Managers Track Progress (cont.)
 Dolphin Inn Performance Dashboard
Figure 8.3
Management 1e
8- 17
Copyright
Copyright © 2014 John Wiley & Sons, Inc.
All rights reserved. Reproduction or translation of this work
beyond that permitted in Section 117 of the 1976 United States
Copyright Act without express permission of the copyright owner
is unlawful. Request for further information should be addressed
to the Permissions Department, John Wiley & Sons, Inc. The
purchaser may make back-up copies for his/her own use only and
not for distribution or resale. The Publisher assumes no
responsibility for errors, omissions, or damages, caused by the
use of these programs or from the use of the information herein.
Management 1e
8-- 18