goal setting is about who bears the risk

Goals are motivational because they heighten one’s focus on a desired outcome (make behavior and outcome more salient). Goals are most motivational when one is committed to the goal, usually occurring when the goal is specific, self set, and challenging.

Goals can be oriented toward either behavior or performance. Behavioral goals refer to only the action the individual must take to accomplish his/her goal. Performance goals refer to the outcome one produces by their actions.

For example, if a restaurant manager wishes to increase the number of desserts sold, he/she may set goals for the waitress/waiter as behavioral goals or performance goals. Behavioral goals for the server would be to always take the following actions: mention to customers early in meal to save room for desserts and ask customer at end of meal if they wish to order dessert, mentioning or showing them some of the delicious options. Performance goals for the server would be to sell desserts to 75% of customers.

The difference in terms of goal effectiveness (positively affects effort) is the degree the individual has control over situations that may also influence the outcome, namely number of desserts purchased. Often outcomes depend more on situational conditions beyond the server’s control, like the amount of food in the main course, the quality, selection and price of desserts, all determined by actions of someone other than the server. The more situational factors outside the control of the server affect outcomes, the more likely the goal will not motivate the server because he/she believes the effort they put forth will not result in goal accomplishment.

In organizations behavioral goals put the risk of performance on the collective behavior of the organization, while performance goals put the risk of performance on the individual employee. It is important that leaders be cautious of performance goals for employees who have little control over situations that materially affect the outcome because the goal will actually be demotivating, instead of motivating.