Performance Architect update 6/2010

An introduction to theory in performance management: Goal Setting Theory

In my previous update I highlighted the benefits of increasing theory awareness in performance management practice. It has the potential to positively impact the process of selecting, developing and using performance management solutions. Over the next few months, I will gradually introduce some of these theories, in no particular order.

A very important theory informing performance management is the Goal Setting Theory, which is considered to be one of the most effective motivational theories. It was formulated inductively based on empirical research conducted over nearly four decades by Locke and Latham. Its roots are based on the premise that conscious goals affect action (Locke & Latham, 2002).

An important note to make is that the use of the term “goals” in this theory. Goals are considered here to be the object or aim of an action. As the terminology used in performance management as a discipline is loosely structured, the goal setting theory itself applies to objectives, Key Performance Indicators and targets as well.


There are four general principles that are linked to an increase in motivation, thus generating optimal performance:

  • Goals should be challenging, but attainable. Locke and Latham (2004) found a positive, linear function in that the most difficult goals produced the highest levels of effort and performance. They also found that performance decreased once the limits of ability were reached or when commitment to a highly difficult goal lapsed.
  • Goals should be specific rather than vague. Research by Locke and Latham (1990) showed that specific, difficult goals consistently led to higher performance than urging people to do their best. As specific goals vary in difficulty, goal specificity in itself does not necessarily lead to high performance, but reduces variation in performance by reducing the ambiguity about what has to be achieved. (Locke, Chah, Harrison, & Lustgarten, 1989).
  • Employees should be involved in the process of setting their own goals. When goals are self set, people with high self-efficacy set higher goals than do people with lower self-efficacy. They also are more committed to assigned goals, find and use better task strategies to attain the goals, and respond more positively to negative feedback than do people with low self-efficacy (Locke & Latham, 2002, Locke & Latham, 1990). The goal–performance relationship is strongest when people are committed to their goals.
  • Goals should be measurable in terms of being clearly understood by employees: quantity, quality, time, and cost. For goals to be effective, people need summary feedback that reveals progress in relation to their goals. If they do not know how they are doing, it is difficult for them to adjust the level or direction of their effort or to adjust their performance strategies to adjust their performance strategies to match what the goal requires. Summary feedback is a moderator of goal effects in that the combination of goals plus feedback is more effective than goals alone (Locke & Latham, 2002).


Locke & Latham (2002) propose four mechanisms through which goals affect performance:

1. Directive function. They direct attention and effort toward goal-relevant activities and away from goal irrelevant activities.
2. Energizing function. High goals lead to greater effort than low goals.
3. Impact on persistence. When participants are allowed to control the time they spend on a task, hard goals prolong effort (LaPorte & Nath, 1976). There is often, however, a trade-off in work between time and intensity of effort. Faced with a difficult goal, it is possible to work faster and more intensely for a short period or to work slower and less intensely for a long period.
4. Affect action indirectly by leading to the arousal, discovery, and/or use of task-relevant knowledge and strategies (Wood & Locke, 1990).

While Goal Setting Theory is generally analyzed at individual level, its principles are considered relevant at organizational level, too. Locke (2004) argues that goal-setting is effective for any task where people have control over their performance. Research in this field currently explores goal setting theory at both individual and organizational level. Elements of the Goal Setting Theory are present in various degrees in all aspects that relate to performance management practice. Linking theory to practice is up to all of us.

Stay smart! Enjoy!

Aurel Brudan
Performance Architect,


LaPorte, R.E., & Nath, R. (1976). Role of performance goals in prose learning. Journal of Educational Psychology, 68(3), 260-264.

Locke, E. A., Chah, D., Harrison, S., & Lustgarten, N. (1989). Separating the effects of goal specificity from goal level. Organizational Behavior and Human Performance, 43, 270–287.

Locke, E. A., & Latham, G. P. (1990). A theory of goal setting and task performance. Englewood Cliffs, NJ: Prentice Hall.

Locke, E. A. and Latham, G. P., (2002), “Building a Practically Useful Theory of Goal Setting and Task Motivation”, American Psychologist, Vol. 57, No. 9, pp. 705–717.

Locke, E. A. (2004), “Goal setting theory and its applications to the world of business”, Academy of Management Executive, Vol. 18, No. 4, pp. 124-125.

Wood, R., & Locke, E. (1990). Goal setting and strategy effects on complex tasks. In B. Staw & L. Cummings (Eds.), Research in organizational behavior (Vol. 12, pp. 73–109). Greenwich, CT: JAI Press. officially launched


The highlight of this week was the official launch of It is the culmination of over 5 years of research, 1 year of web development and 6 moths of beta testing.

I am pleased with both the quality of the website and the experience of developing it. Everyone in the project team, form the project manager, to business analysts, web developers, graphic artists, researchers and editors worked with dedication and enthusiasm, which was very rewarding.

I would like to thank all of them for achieving this milestone. Additional thanks to the project advisors, for their guidance and support, as well as to all the beta users that provided valuable feedback during testing.

Excerpt from the press release:

Melbourne, Australia, 4 November 2009 – eab group announced the launch, a free online database of Key Performance Indicators (KPIs), supported by a Performance Management knowledge base and a community of users. currently contains over 600 KPIs (performance measures), from a variety of Functional Areas, such as Finance, HR, IT, Marketing and Industries, such as Retail, Hospitality, Agriculture and the Public Service. Navigation through the database is facilitated by a user friendly web interface allowing visitors to either browse or search for relevant performance measures. Each measure is documented in a structured template, containing fields such as: definition, variations, subordinate measures and calculation formula among others. To ensure the quality of the content, 3 Subject Matter Experts review each KPI page before being published. As new performance measures are documented and posted daily, the database is expected to gradually grow to several thousand records.

In addition to a comprehensive list of performance measures, also contains a variety of Performance Management resources to support the understanding and use of performance indicators: recommended articles, relevant links, templates as well as an introductory eLearning course in Performance Management and Measurement. is designed for executives, managers, consultants, analysts and other professionals from organisations from around the globe with an interest in Strategy, Performance Management and Measurement. Over 100 registered members from around the world provided valuable feedback during the beta testing of the site, participating in defining the desired content and the interaction model. All registered members can now use the website as a platform for interaction, as they can comment on KPIs, save KPIs to their personal list and propose new ones.

The value added by is represented by the streamlined access to a rich database of well defined performance measures, along with a comprehensive set of resources to guide the users in how to select and work with KPIs“, said Aurel Brudan, founder and director of eab group. “By using the resources available on the website and tapping in the collective experience of the community of users, everyone registered on will have the opportunity to learn more and improve the outcome of their performance management efforts.

New visitors can explore the website contents or register for free to access more content and join the community of users.

Academy of Management launches AOM Connect

The Academy of Management has recently launched AOM Connect, to coincide with the 69th annual meeting.

AOM Connect is a new service offered by the Academy of Management to its members, as an online professional networking tool. The concept is similar to the AAACommons community operated by the American Accounting Association. Both are powered by HiveLive, a provider of enterprise-class online customer communities.

About the Academy of Management

Founded in 1936, is the oldest and largest scholarly management association in the world.
19177 members from 108 nations.
24 professional divisions and interest groups
Publisher of 4 journals: AMLE, AMJ, AMR and AMP.

Relevant links

Academy of Management
AOM Member Directory
AOM Connect
American Accounting Association