Factors Affecting Goal Difficulty and Performance When Employees Select Their Own Performance Goals: Evidence from the Field

This study examines factors influencing the difficulty of self-set goals and performance in a setting where employees were able to choose their performance goal from a menu of three choices established by management. Rewards for goal attainment were increasing in the difficulty of the goal. We develop a behavioral model of the factors expected to affect employees’ goal choices and performance. Anticipated influences on goal difficulty include employees’ impression management intentions, past performance, experience, and prior eligibility for rewards. We also expect performance to be related to goal difficulty. We use a unique combination of archival and questionnaire data from 476 employees at several call centers of a financial services company to test our hypotheses. All predictions are supported: the difficulty of self-set goals is negatively associated with employees’ impression management intentions; employees with better past performance set more difficult goals; and both prior performance and goal difficulty are positively associated with current period performance. We conduct supplementary analysis examining the extent to which employees selected attainable goals and the impact this had on performance. We also analyze the extent to which ratcheting concerns may have influenced actual performance for those employees who attained their goal. Implications for future research and practice are discussed.