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Future outcomes that individuals and groups strive to achieve

Goals direct attention
Goals regulate effort
Goals increase persistence
Goals foster strategy and action programs

A Goal should be challenging but not impossible to achieve

A Goal must be clear and specific if it is to be useful in directing effort

A management system that uses goal difficulty and goal clarity as its foundation for motivating employees

See Table 6.1  p. 165

Four factors that moderate the the strength of the relationship between goals and performance:

Ability - performance levels off as the limits of a person's ability are approached

Goal Commitment - an individual's determination to reach a goal, regardless of whether the goal was set by that person or someone else.

Feedback - provides information to the employee about how well he or she is doing.

Task Complexity - Refers to the cognitive processing that is needed by a person to solve the task.

Share with employees the savings from productivity improvements

A Gain sharing program designed to save labor costs.

Uses a formula that bases distribution of rewards on a ratio of labor costs relative to total sales volume.

Example:
Estimate $100K needed to generate $500K in revenue.
Actual $80K generate $500K in revenue.
40% of $20K ($8K) distributed to employees, company keeps $12K

Give Employee a portion of company earnings, usually by percentage.

Pay is based on number and level of job skills employee has learned

Based on skills possessed rather than specific jobs performed

Little emphasis on seniority

Allow employees to choose the benefits they want, rather than having management choose for them.

Also known as Cafeteria-Style Benefit Programs

Direction of attention - focuses behavior on goal achievement

Effort - the greater the challenge, the greater the effort

Persistence - willingness to work at a task until desired results are achieved.

Task Strategy - The way in which a person chooses to tackle a task

Performance is likely to be high when:

1. Challenging goals are set

2. the moderators (ability, goal commitment, feedback, and task complexity) are present

3. the mediators (direction, effort, persistence, task strategy) are operating.