3. Performance Management
Goal setting and its shadow
When hard goals help and when they hurt
Use when
Cascading targets, or when someone proposes a moonshot
What the evidence supports
Specific, hard goals beat vague ones, reliably, when four conditions hold: commitment, feedback, ability, and task fit. One of the most replicated findings in OB.
Where it breaks
Stretch goals narrow attention, raise risk-taking, and suppress learning. They pay off only with recent success plus slack, and are most seductive to organizations with neither.
The applied case
Wells Fargo: eight products per household, tied to individual pay and job security, no integrity counterweight. ~5,300 staff fired for meeting the number fraudulently; over $3bn in penalties.
“A hard goal tied to individual consequence in a low-trust system will be met, one way or another.”
How to use it
Use the four conditions as a pre-check before cascading anything. If commitment, feedback, ability, or task fit is missing, the goal will produce distortion rather than performance. Pair with the Audacity Licence when a stretch target is on the table.
Card details
- Model type
- Grid
- Origin status
- Established
- Content last reviewed
- 28 July 2026
Origin
EstablishedLocke and Latham, 2002; Sitkin, See, Miller, Lawless and Carton, Academy of Management Review, 2011; Ordonez, Schweitzer, Galinsky and Bazerman, 2009.