The advantages of high performance targets
May raise aspiration levels
One of the benefits of high targets is that they may raise aspiration levels. Targets help focus effort, and if high targets are able to increase the aspiration of employees, it is possible that this may in turn contribute to increased effort and determination to reach the goal.
May result in creative problem-solving to improve performance
In addition to increasing effort and determination, high-performance targets may also result in creative problem-solving for ways to achieve the goal. Sometimes achieving a step increase in performance requires a different way of organizing the firm, and the presence of high-performance targets may encourage the search for different approaches for achieving a jump in performance.
The limitations of high performance targets
May reduce motivation
While high-performance targets can increase motivation, they also have the possibility to reduce motivation. If employees feel the goals are not attainable, then people can check out – thinking that no matter how much effort is put in, there is no possibility of succeeding to achieve the desired performance levels.
Has the potential to lead to dysfunctional behavior
Another limitation of particularly high-performance targets is that they may encourage behaviors within an organization that result in unethical or illegal behavior. If employees feel that the only way of achieving their goals is to break various ethical standards, there is the possibility that they will prioritize the goal over ethical behaviors.
One way of breaking the tradeoff: Stretch goals
One possible approach for breaking the tradeoff between easily attainable goals and high goals is stretch goals. Stretch goals involve having two targets – one that is more easily attainable, and one that is significantly higher. This opens the possibility of getting the best of both sides – attainable goals that can be achieved, and higher goals that can raise aspiration levels.