It’s goal-setting time of year again at my company, and I’m not looking forward to it. In addition to setting meaningful objectives for the year, we’ve been encouraged by HR to come up with five- and ten-year plans for ourselves too. Unfortunately, my manager takes all this pretty seriously – and he’s reminded my coworkers and I that raises and promotions will be linked to achieving these goals. Last year, I put a lot of time and energy into this exercise; I even incorporated a few “stretch goals” at the request of my supervisor. But when it came time to assess my performance (I’d come close to hitting all of them, by the way), I was told there wasn’t enough $$ in the budget for a raise, and to “keep up the good work.” What’s my motivation to take any of this seriously again this year? Why can’t they just leave me alone and let me do my job? – Name withheld

Yes – goals.

An organization needs to accomplish certain things if it is to succeed. Having employees set goals for themselves is one way to make sure at least some of those things get done.

In your case, your employer’s handling of this exercise is clearly disappointing. To not follow through on an implied, if not necessarily promised organizational reward is to actively destroy trust. And once you lose the trust of your employees…well, you might as well put a timer on the demise of your organization.

But even had you been given the raise you deserve, to execute on this familiar management technique in the way you describe is deeply problematic – as you seem to be beginning to realize.

Tying organizational reward to the achievement of specific objectives—particularly objectives employees set for themselves—is counterproductive for two reasons. First, it encourages employees to come up with goals that are as easy as possible to reach, while at the same time downplay the likelihood that they will. Second, it becomes in an employee’s best interest to do whatever they can to achieve them – even if that means engaging in actions or behavior that are at odds with the interests of the organization as a whole.

Or, as Michael Jensen of the Harvard Business School observes, by adopting this approach to goal-setting, companies are, in effect, “paying people to lie.”[1]

If you need an example of how horribly things can go wrong as a result, look no further than the Wells-Fargo banking scandal of a few years ago. Under enormous pressure from management to meet nearly impossible sales goals, employees opened millions of accounts in customers’ names without their knowledge, signed unwitting account holders up for credit cards and bill payment programs they didn’t want or need, and even created fake PIN numbers and forged customer signatures.[2] And according to at least one lawsuit, these fraudulent behaviors were not only engaged in at the encouragement of bank managers, but explicitly with their help.[3]

So what should you do?

Well, if your employer continues to insist you participate in this activity—and pays you to as well—so be it.

You might start by trying to get a better read on how seriously your manager actually takes all this, though. Explain to him that you plan to clear your schedule for at least a day (maybe two) in order to devote your full attention, effort, and thought to this important task. Maybe float the idea of working offsite (ie. at home), or otherwise unplugging completely from your normal routine. No email, phone calls, or meetings, either. Then see how he reacts. That should tell you plenty about how he really feels.

Next, use whatever time you are allotted to come up with some reasonable objectives for yourself. The operative word, of course, is reasonable. These should be things you genuinely believe you can accomplish in the coming year, without burning yourself out. So please, no more stretch goals.

Then, throw out about a fifth of them.

Or, reduce each of your metrics by twenty percent.[4]

The reason I say this is because human beings tend to be demonstrably overconfident when it comes to predicting what they are capable of, as another Harvard study demonstrates.[5] This is particularly true when those goals are linked to our self-esteem. Your natural inclination, in other words, is to aim high—too high, it turns out. In that way, you unwittingly set yourself up to fail.

So continue to play the game. And to take this process seriously – as much as you might despise the idea. I probably don’t need to remind you that while you may again be denied a raise this year should you hit all your targets, there’s no way you’ll see a bump in pay if you don’t.

Then put this needless and counterproductive exercise behind you.

If not more $, perhaps your “reward” will include being left alone for the rest of the year, so that you can do your job in peace.

NOTES:

[1] Jensen, Michael. “Paying people to lie: The truth about the budgeting process.” Harvard Business School Working Paper. Sept. 6, 2001. Available as free download at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=267651. Retrieved 04/13/2023.

[2] Flitter, Emily. “The price of Wells-Fargo Fake Account Scandal Grows by $3B.” New York Times, Feb 21, 2020. https://www.nytimes.com/2020/02/21/business/wells-fargo-settlement.html. Also: Tippett, Elizabeth. “Wall Street Vice: How Wells-Fargo Encouraged Employees to Commit Fraud.” Salon, Oct 7, 2016. https://www.salon.com/2016/10/07/wall-street-vice-how-wells-fargo-encouraged-employees-to-commit-fraud_partner/. Retrieved 04/13/2023.

[3] Polonsky and Zaghi vs. Wells-Fargo Band and Company. Sept, 2016. https://www.nakedcapitalism.com/wp-content/uploads/2016/09/Polonsky-v.-Wells-Fargo-Bank-Co.-BC634475-California-Superior-Court-Los-Angeles-County.pdf

[4] I found support for my suggested 20% reduction in: Sharot, Tali. “The optimism bias.” Current Biology, 2001. Volume 21, Issue 23, p. R941-R945.

[5] Yang, Haiyang, and Antonios Stamatogiannakis, Amitava Chattopadhyay, and Dipankar Chakravarti. “Why we set unattainable goals.” HBR online. January 4, 2021. https://hbr.org/2021/01/why-we-set-unattainable-goals. Retrieved 03-25-2023.