The goal-setting theory developed by psychologists claims that goal setting leads to higher levels of work performance and motivation. The goal-setting theory can be applied to multiple areas of life, including the workplace, a classroom and personal development. Edwin A. Locke, Karyll N. Shaw, Lise M. Saari and Gary P. Latham first introduced the theory in their study "Goal Setting and Task Performance: 1969–1980." The main precept of the theory is that the more specific the goal, the more likely that the goal setter will achieve that goal.
Though goals can be extremely powerful and influential, they are abstracts. Goals cannot be detected via empirical study and analysis. Only the end results of goals are measurable. A goal is an objective, whether achieving a specific grade on a test, breaking a sports record, quitting an addiction or balancing a budget. The ability to achieve that goal depends on the personality of the goal setter. According to Locke and his associates, "a review of both laboratory and field studies on the effects of setting goals when performing a task found that in 90% of the studies, specific and challenging goals lead to higher performance than easy goals, 'do your best' goals, or no goals. Goals affect performance by directing attention, mobilizing effort, increasing persistence, and motivating strategy development." The "do your best" goal is considered equivalent to setting no goal at all, as it lacks specificity and focus.
Specific, challenging goals cater to all the basic needs of a human being as listed in the self-determination theory: autonomy, competence and relatedness. Autonomy does not necessarily mean independence; rather, it is the ability of a person to make decisions. When a person sets a specific goal, all focus and attention are devoted to that goal. An autonomous person knows how to regulate all other aspects of his or her life to reach the goal as efficiently as possible. All people feel a need to be competent, to be capable and self-reliant. Goal achievement affirms a person's abilities and strengths. Last, the social context must be conducive to goal performance. One motivational tool people appreciate is feedback. Recognition and praise from another person act as positive reinforcement for a goal setter. For some, validation from another person is necessary. As Locke states, "goal setting is most likely to improve task performance when the goals are specific and sufficiently challenging, the subjects have sufficient ability (and ability differences are controlled), feedback is provided to show progress in relation to the goal, rewards such as money are given for goal attainment, the experimenter or manager is supportive, and assigned goals are accepted by the individual."
Goal setting falls within cognitive behavior modification. A person's mindset is the most instrumental factor in achieving one's goals. Motivation is key to goal setting and performance. There are two types of motivation: intrinsic and extrinsic, or autonomous and controlled. Intrinsic motivation comes from the individual, specifically how the person's emotional reactions to a task motivate that person to succeed. The person makes a conscious decision to perform a task, not for the sake of gaining some tangible reward but for the sake of the action itself. Extrinsic motivation is when a person has ulterior motives for performing a task, such as praise from others, popularity or wealth. This kind of motivation can also be enforced by another person. A parent or teacher may pressure a child to do better in school, pushing the child to commit to an academic goal. Peer pressure elicited by one's friends or fellow students is another form of extrinsic motivation. Various studies have researched how extrinsic motivation affects intrinsic motivation. These studies found that the provision of an award for an activity that a person enjoys will probably undermine that person's intrinsic motivation. The extrinsic motivation takes away a person's volition and sense of autonomy, thereby limiting the enjoyment of the activity. Studies show that more people prefer recognition over a tangible reward.
Self-efficacy plays a major role in goal setting and goal achievement. Self-awareness helps a person realize what goals are indeed attainable according to the person's abilities. Self-confidence will motivate the person to set challenging goals; success is not dependent on results, rather on progress. A self-aware person will thereby set goals that balance out attainability with challenge. People with a strong sense of self-efficacy will view obstacles as opportunities, not as threats. They will pursue and seek challenging goals, whereas a person with low self-esteem will avoid difficulties. Studies show that individuals with high levels of self-efficacy are likely to become entrepreneurs.