What is Goal Setting Theory?

Goal-setting theory states that goal setting has an effect on task performance. Goals provide direction to employees about what needs to be accomplished. 

Who Created Goal Setting Theory?

Goal-setting theory was proposed by Edwin Locke in the 1960s. 

Premises of Goal-Setting Theory

Below are the premises of goal-setting theory:

• Clear and Challenging - Goals should be specific and challenging. Such goals relate to higher performance in completion. Clear, unambiguous goals avoid misunderstanding.
• Realistic - Goals should realistic and capable of being achieved.
• Feedback - Employees should receive feedback that directs their behavior.
• Participation - Employee participation in goal setting facilitates accepts and increased involvement.

Results of Goal-Setting Theory

The anticipated result of goal setting is:

• Self-Efficacy - This concern employee self-confidence in a performance task. Generally, self-efficacy leads to higher performance through increased effort.
• Goal Commitment - This assumes that individuals will become committed to the goal and be reluctant to leave it. This is true for goals that are openly communicated, self-set by the employee, and consistent with organizational goals.

Goal-setting theory is linked to improved performance, increased output, increased commitment, feelings of self-efficacy, and organizational culture. 

What are the Limitations of Goal-Setting Theory? 

Goal-Setting Theory has limitations when the managers goals differ from the organizations goals. 

Difficult goals tend to cause riskier decisions by employees. Over-assessing an employee's ability can make the goal too daunting and discourage completion.