Bulls Eye

AS we know from the Hygiene Theory of motivation that achievement is one of the factor which increases job satisfaction. A sense of achievement gives us strength and builds our confidence but at the same time it is very important that the achievement which we are trying to chase is valued by not only us but others also. Goal setting theory just works with that argument. Valued by the organization targets are given to the employee or the targets are defined by the employee itself. In a survey of organizational behavior scholars, Goal Setting Theory has been rated as the most important theory but it has to be conducted very carefully considering certain things in mind like regular feedback, ability of the employee chasing the goal, goal commitment of the employee.

Microsoft Corporation has a long tradition of emphasizing individual goals in its performance management system to support its performance based culture. Due to number of reasons like economic and competitive pressures and several exhaustive legal challenges to its business practices, the CEO of the company Steave Balmer instituted several changes in the organization’s structure and processes to ensure the success of Microsoft in future. The PM system review team conducted an audit of over 1500 employee annual performance review forms using the SMART (Specific, Measurable, Aggressive, Realistic, Time Bound) criteria to assess the quality of employee goals. The annual performance review includes the employee’s goal for the year, employee’s and manager’s review regarding the goal and official employee’s performance rating. Results were very astonishing: -

·         25% of all employees had not included “specific” goals on their annual review form: -

A person without a specific goal is just like a ship without rudder. Chasing something makes a lot sense when we know what we are chasing.

·         Only about 40 per cent were estimated measurable: -

Effective goals are more quantifiable. It someone knows the specific goals the performance is inclined to be higher.

·         The goals were more activity-focused than focused on results, and it was hard to see alignment with broader organizational or company goals: -

Giving employees goals that are not aligned with company goals will be a problem, because goals will direct employees' energies to a certain end. How can the big ship go in a specific decided direction unless all crew members of the ship does not want to go in that direction?

To explore the reasons for ineffective goal setting the PM review team conducted focus groups with managers and employees at different levels and at different regions worldwide. Some of the findings and their relationship with OB concepts were: -

·         Managers and employees need to meet more regularly to update progress toward achieving goals. This is the feedback part which is very important as the manager comes to know the progress of the employee towards the goal and gets enlighten by the challenges and conflicts faced by the employee. It really enhances the information of manager about the employee’s personality and gives the hint that how a specific employee can be motivated towards the goal.

·         The findings indicated that many concepts and condition were not present for many employees at Microsoft. Goals direct attention, energize people, influence persistence, effort, and work pace. So, some of the essential SMART Goal motivators were missing from the employees. It was difficult to know what directed their attention, energy, and efforts.

·         Managers need more training in setting SMART goals. It was clear that it is important to stick with the SMART goals as this is the motto of the company. Managers at Microsoft often motivate people to discover new ways to achieve the goal which were aberrant as per Microsoft’s goal.

Microsoft leaders concluded that goals are viewed as hopes rather than genuine commitment and it is imperative to have commitment with the goal. Thus the first change that was made was to combine the two by changing the actual language from ‘goals’ to ‘commitments.’ The commitment terminology came directly from leaders who believed that when an employee makes a commitment, there is a greater level of accountability to meet that commitment. To support the CEO’s plan to drive a culture of accountability, this language change was important. Along with that some important things were taken care like regular communication with manager, alignment commitment across the company by cascading commitments all over the organization.

In a nutshell one can say that along with the other causes Feedback and Commitment were the reasons of the ineffective practice of Goal Setting theory and company recognized it and worked on the essential parts of it.

By: - Vashisth Sharma

Team 4