The harmful side effects of goal setting

“The Systematic Side Effects of Over-Prescribing Goal Setting” are well documented in a Harvard Business School Working Paper, by Max Bazerman and his co-authors, on Goals Gone Wild.  According to the authors of this paper:

 “The use of goal setting can degrade employee performance, shift focus away from important but non-specified goals, harm interpersonal relationships, corrode organizational culture, and motivate risky and unethical behaviors.”

The New York Times illustrates this concept with this instructive story on the Staples “Market Basket”:

“Staples, explained a manager named Natasja Shah  in a series of conversations and e-mails, has a system called Market Basket that tracks how many dollars’ worth of add-ons each staffer sells.

“The average needs to be $200,” Ms. Shah said. In other words, each time you sell a computer, you need to sell, on average, $200 worth of other stuff. And that average is carefully tracked. Sales staffers who aren’t meeting their goals are coached, and if that doesn’t work, she and other employees said, there will be disciplinary action that can lead up to termination; underperformers can also end up with lots of night and weekends shifts or even a reduction in scheduled hours.

What happens to managers who can’t keep their storewide Market Basket numbers up?

“It’s not pretty,” said a manager who asked not to be identified, fearing repercussions. “There are these conference calls with district managers, and one of them once told a store manager, ‘If you can’t do the job, you can go sell fries at McDonald’s.’ ”

With the ever-present risk of bringing down a store’s Market Basket average, several employees said, upper management instructs store management that staffers who think they won’t be able sell $200 worth of add-ons should tell the customer the computer is not in stock.

“It’s called ‘walking the customer,’ because we let them leave the store empty-handed.” said Ms. Shah, who works in a Staples store in Fountain Valley, Calif.”

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About Arie Goldshlager

Customer Insight, Customer Strategy, and Innovation Consultant
This entry was posted in Customer Experience, Customer Service. Bookmark the permalink.

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