IESE Insight

The Tao of target setting

In theory, targets should help motivate employees. But assigning ever-more-ambitious targets in response to positive results can be counterproductive. IESE's Tony Dávila and co-authors study target setting in a large company with hundreds of branches and find that target setting works best when it takes into account the performance of other employees in similar roles.

Over the long run, employees avoid exceeding targets if they know it will inflate future expectations.
April 29, 2015