Importance of Setting Organizational Goals - Coursework Example

Organizational goals form an important aspect of business as it provides direction and fixes responsibilities on all. This creates an opportunity for employees to excel and achieve the goals through their performance. With intensifying competition achieving goals bring a sense of pride and motivates the employees, as their efforts are recognized which helps them to earn social status. This can back fire the organization as unrealistic goals can create a rift and de-motivate the employees. It leads to a situation where organizational culture plays an important role in the effective transformation of performance into motivation. The paper thus looks into different theories of goal setting and the manner it enhances performance and motivation if used in the right direction. The paper also presents arguments against setting goals and the impact it has on the work force. The paper thus looks to create a balance between the two by using real world examples and the manner in which goal setting is widely used despite having objections from different areas. The prime reasons organization set goals before hand is to ensure that “the results achieved are compared with the results set to see if there are any variations and changes for those needs to be accounted for”. (Heather, 2009) For example, suppose the manager has set the objective of achieving a 3% growth in sales. The manager should see the results regularly and if the results don’t match the expected results than steps should be taken to rectify those. This thereby gives direction and makes the employee understand what they have to achieve and their method of working is determined. Setting goals helps the employees understand what they need to do. A research shows that when an organization has goals in place it motivates an employee and the communication process passes without any barrier as the employee feels a part of the organisation and share the same common goal. (Alexander, Page & Wentling, 2003) This leads towards higher satisfaction which finally gets transformed into motivation. Some critics raise their voice and argue that setting goals do provide direction but it over strains the employees. This especially happens in cases when the goal set is unrealistic and changing. (Rockwell, 2010) It creates a situation where there is no uniformity among the employees as each one tries to prove his worth thereby leading to disharmony. Despite this organization favour setting goals for the employees and while doing so special care is given to integrate the culture. This brings a change in employee working pattern. It makes them do different things. Culture gets ingrained by the group he has. “People belong to different caste, country, creed, colour, and region which affect the manner in which they carry out their duties”. (Innah, 2009) This has an influence on the working of the employees if he comes from a different culture. Organizations need to ensure that a platform is created where all employees are seen as one so that equity prevails and employees feel a part of the organization. This increases the role of leaders who have to see that culture integration takes place in such a manner that it brings the best out of every employee. This will help to increase harmony and motivate employees towards a common goal. Various studies have been conducted to highlight the importance on culture in performance and motivation. A research shows that as employees come from different countries and have different culture so there pattern of influencing is different. Culture here defines the manner in which he will act and this gets moulded by the group he belongs to. (Ralston, Hallinger, Egri & Naothinsuhk, 2005) Leaders need to identify these and integrate it in the organizational culture so that the employees are able to perform well. Some arguments have been raised against organizational culture prevalent in different organizations. Some organization favours employees which are seen as the culture prevalent in that organization. Hardworking and focussed employees lose interest and become de-motivated as they know there performance won’t be rewarded. (Rockwell, 2010) Employees are seen to be a part of the culture they belong which divides the workforce and hampers the growth trajectory. This argument was criticized by a survey which showed that a relationship existed between motivation, performance and organisational culture. A survey was carried among the employees and more than 50% showed that there was some relation between the two and this was due to leadership and emotional intelligence that was present in the team. (Ross & Eeden, 2008) This thereby highlights that organizational culture forms an important aspect of managerial leadership and organization needs to give care and attention towards it. One such theory which propagates the fact that setting goals help to motivate the employees through improved performance is the goal setting theory. It states that “having clear goals and providing continuous feedback helps to motivate employees”. (Robbins, Judge, Millet, Waters-Marsh T, 2010) This makes the employee understand what needs to be done and on accomplishing the task the employee get motivated as a sense of pride comes in. This theory stresses on the fact that organisations need to realise that all the human needs cannot be satisfied through money. Employees need to be motivated through measures other than monetary like respect, recognition for the work done and social status. (Lowery, 1998) The goal setting theory helps to achieve this as it gives pride to an employee by earning him status in the society. This helps to ensure that employees remain loyal. It ensures that employees get the best and at the same time helps the employees to fulfil their goals. This thus helps both the organisation and employees. Organisations are widely using this method due to the inherent advantage it gives and ensures that the results are positive. This thereby demonstrates and keep the critics quite by showing that setting goals helps to improve performance and motivation of employees by making them loyal. Another theory which substantiates the importance of setting goals on performance is the path goal theory. In this theory it is seen that “employees are motivated to work harder and they know that their hard efforts would lead to good appraisal and this appraisal will result in incentives like bonuses, promotions and so on and this would lead towards the satisfaction of employees as his personal goals will be achieved”. (Robbins, Judge, Millet, Waters-Marsh T, 2010) This helps to keep the employee motivated and gives him a direction to follow. It makes them pursue the objectives as they know that their efforts will be recognized through appraisals. An example in this direction will help to understand it better. This can be seen in Virgin Blue Airlines where Richard Branson ensured “higher employee engagement to ensure that they are motivated and confident to complete the task in hand”. (Virgin Blue, 2010) He made use of the path goal theory and used this ensured that employees talent was recognized and they were compensated accordingly. The above example highlights the role leaders’ play to ensure that employees are motivated through enhanced performance. The above example shows that improving employee engagement motivated the work force to achieve the organization objective. Various studies have been conducted and one such study highlights that leadership is a vast concept compared to management and leaders have broader roles to play. (Angelo, 2007, pg 61) Leaders use the surroundings so that maximum can be extracted from the employees. This is seen in the above example where the organization was able to improve the performance through different mechanism which helped to motivate the employees at the same time accomplish the organizational goals. Another theory which helps to support the above case is the equity theory. Equity theory says that “employees compare their job inputs like efforts, experience, education to their outputs like salary level, recognition, incentives in relation to their peers to reduce inequality” (Robbins, Judge, Millet, Waters-Marsh T, 2008) An employee compares himself to his peers in different ways “like self-inside, self-outside, other-inside and other-outside”. Mostly employees compare themselves based on the basis of gender, the time for which he had worked in the organisation, his position in the organisation and the degree of education he processes. (Stephen & Timothy, 2008) This thereby highlights the importance of organizational culture. It throws light on the fact that the culture needs to take account of the above mentioned fact so that equity prevails. This will finally lead towards enhanced performance which will finally motivate the employees. Some critics argue that it is impossible to have equity in an organization as some employees will be over recognized and some under. (Rockwell, 2010) This will also lead towards a path where their efforts will not be recognized as organization will have to perform and compete among them. This was supported by a study which says that “when there is inequity among inmates it gets reflected in the family environment as productivity gets hampered”. (Lively, Powell, Claudia & Carr, 2008) The study finds that when as employee does not perceive equity it gets reflected elsewhere also. When the inmates don’t perceive equity performance gets affected. This decreases productivity. As a result even family environment gets affected. Thus, it increases the role of leaders in the organizational culture. They have to ensure that equity prevails. This will help to satisfy the employees and harmony will prevail in the work environment. This has been supported by a theory which is transformational leadership theory. The transformational leadership theory states that leaders take care of the changes that need to be made by acting in a manner which is in the interest of all. This quality thereby makes the leader energetic, enthusiastic and passionate towards the work. This helps to motivate the employees and bring the best out of them by clearing defining the goals. A study in this direction suggests that leaders have charismatic and transformational style. (James, 2006) Another study shows that leaders are “brilliant, lonely, and imaginative and risk takers”. (Yukl, 1989)This difference style among their working has changed the perception of work. The studies thus helps to identify different traits and qualities leaders possess and the manner it shapes the working of the organisation. This can be seen in the example where James Strong, chairman of Woolworths who was “able to make his subordinates realize the importance of working, design a compensation package which helped to motivate them and ensured that development was on the personal front also”. (Woolworth, 2010) This has been inferred on the fact that Woolworth is looking to enter into China and India and this has been possible because the workforce has been able to deliver on the promises made. This has been due to the transformational quality demonstrated by the leaders who understood the employees better. Leaders thus have a huge role in shaping the performance of the employee and motivating the employees. When an organization has set a goal it is important that the efforts of the employees are directed in a manner that will help to improve the performance. This gets enhanced as performance lead towards motivation. Despite many critics arguing that setting goals hamper the growth progress of employees and de-motivates them it is widely seen from the above theories that it helps. Organization needs to chalk out a plan and direct their effort in a manner that it brings harmony and creates conducive environment to work. Motivation and success go together. One leads to the other and vice versa. This increases the role of leader as he has to ensure that the efforts are directed in a manner to improve the performance of the employee. This finally gets transformed into motivation and all measures should be taken to ensure that a continuous appraisal is in place which will finally improve the performance. 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