Goal SettingEffective Goal Setting TechniquesMBO: Cascading of ObjectivesSears Auto RepairExpectancy Theory & Performance IssuesOpen Book ManagementChanges Implemented at SRCOutcomes at SRCEmployee Outcomes (cont.)SRC’s Financial PerformancePowerPoint PresentationSlide 12Goal Setting •“When you set a goal, you create something and it becomes real. You write it down You focus on it. You aspire to it, and that’s your motivation.” (Scott Grocki: 167)Effective Goal Setting Techniques•Consider the level of difficulty–“More difficult” goals increase energy level•Consider the level of specificity–Specific goals increase your ability to focus and to measure your progress•Employee participation in the goal setting process–Increases the level of acceptance and commitment •Long-term and short-term goals–Yearly, monthly, weekly, & dailyPrentice Hall, 2001 Chapter 7 3MBO: Cascading of ObjectivesMBO: Cascading of ObjectivesOrganizationalOrganizationalObjectivesObjectivesDivisionalDivisionalObjectivesObjectivesDepartmentalDepartmentalObjectivesObjectivesIndividualIndividualObjectivesObjectivesThe XYZ CompanyThe XYZ CompanyConsumer ProductsConsumer ProductsIndustrial ProductsIndustrial ProductsDevelopmentDevelopmentResearchResearchMarketingMarketingCustomerCustomerServiceServiceSalesSalesProductionProductionSears Auto Repair•What went wrong?–Why?•What lessons should be learned?Expectancy Theory & Performance Issues•Effort – performance relationship–Training & education•Performance – rewards relationship–Will my performance be recognized & rewarded?–How are rewards allocated?•Seniority versus merit•Is the evaluation process fair?•Rewards – personal goals–Is the reward personally desirable?•“If you perform well, we will put you in charge of our overseas office”Open Book Management•Background at SRC–Extreme financial difficulties–High level of distrust –Employees wanted more challenge•High in growth need strength (Job characteristics)Changes Implemented at SRC•Sharing financial information–Principle of job enrichment–Trust•Soliciting employee input–Recognition–Ideas are valued•Bonus plans & employee stock ownership plan–Financial incentives (short-term and long-term)Outcomes at SRC•Employees–“When I first came here, I didn’t realize that as a worker on the floor you could have a direct impact on the profit.”•Task significance (JCM)–Pay attention to costs, quality, and time to complete work•Responsibility (Herzberg)Employee Outcomes (cont.)•Ideas are valued•Recognition (Herzberg) •New product–Reading and understanding financial information•Skill variety (JCM)•Growth (Herzberg)SRC’s Financial Performance•Growth–Stock price•From 10 cents to $18.60–Employees–Profitability•Accuracy–Inventory countsPrentice Hall, 2001 Chapter 6 11Expectancy Theory3. Are the rewards personally desirable? 1. If I try hard, can I do it? 2. Do I need to perform at a high level toreceive rewards?