Academic journal article Akron Business and Economic Review

Sustaining the Positive Effects of Goal Setting: The Positive Influence of Peer Competition

Academic journal article Akron Business and Economic Review

Sustaining the Positive Effects of Goal Setting: The Positive Influence of Peer Competition

Article excerpt

Goal setting is probably the most frequently discussed management practice over the past 30 years. Unfortunately, as with most management terminology, "goal" and "goal setting" take on different meanings depending on the context in which they are used. From a strategic planning perspective, an organization may set goals with regard to such factors as efficiency, growth, and employee development. These goals or strategic objectives describe values or general organizational aims and priorities. Our focus, however, is on what an individual is trying to accomplish. Therefore, we define a formal goal as the object or aim of an individual's action(s). Such formal goals are often referred to as "performance standards," "objectives," or "quotas" in the popular management literature.

We use the term "goal setting" to refer to a formal program of setting numerical or quantitative performance goals for individuals. For example, an organization might set a goal to increase sales by 10 percent in the coming year. This goal would be translated into specific sales quotas for each salesperson. While the exact nature of the process may vary from organization to organization, all formal goal setting programs share the common objectives of increasing employee motivation and performance.

Reviews of goal-setting research [24, 30, 44] as well as meta-analytic examinations of the empirical evidence [32, 46] have consistently found that both laboratory and field results provide strong support for the proposition that specific, difficult goals lead to improved task performance. However, some research findings [e.g., 14, 15] suggest that goal-setting programs tend to lose their potency over time. This article addresses the practical issue of how the positive effects of goal setting on task performance can be sustained. Specifically, the purpose of this paper is fourfold: (1) to provide a brief review of the longitudinal field studies examining the effects of goal-setting on task performance, (2) to offer some speculations on how peer competition functions to sustain and/or enchance performance, (3) to suggest conditions under which peer competition may be introduced as a means of sustaining the positive effects of goal setting, and (4) to provide some guidelines for managing competition in the work place in an effort to instill a strong results orientation and a spriti of high achievement.


Although goal setting has been proven effective in improving performance over trials as short as one minute [26], organizations are more interested in performance over longer periods as well as in the maintenance of energized behavior [1]. Unfortunately, a consistent criticism over the years has been the generally short time frames employed in goal-setting studies [1, 24, 44, 46]. To date, only six field studies [13, 14, 15, 22, 37, 38] have examined the effects of goal setting on performance over extended periods of time (i.e., one year or more).

The first of these studies was conducted by Raia [37], who examined the impact of a formalized goal-setting program on overall productivity in 15 plants of the Purex Corporation. Since no control group was used in this study, goal-setting production rates were compared with pre-goal-setting rates. Average productivity, which had been declining before the program, was 6.2 percent higher for all plants in the 13-month period following the implementation of the program. In a follow-up study connected 14 months later, Raia [38] found that productivity was still increasing but at a decreasing rate. Specifically, average productivity for fiscal 1963 increased at a rate of 1.40 percent per month, while the rate of increase was only 0.02 percent per month in fiscal 1964. Thus, while the institution of clear and specific goals resulted in significantly increased production, these initial results were not sustained.

Steers and Porter [44] identified two factors that may explain this tapering off of productivity gains. …

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