Learning versus performance
goals: When should each
be used?
Gerard H. Seijts and Gary P. Latham
Executive Overview
Contrary to the extant thinking on motivation in the workplace, we argue that
performance or outcome goals can have a deleterious effect on one’s performance. We
demonstrate that in situations where primarily the acquisition of knowledge and skills
rather than an increase in effort and persistence is required, a specific challenging
learning rather than an outcome goal should be set. A learning goal draws attention
away from the end result. The focus instead is on the discovery of effective strategies or
processes to attain desired results. The practical implications of learning goals for
leadership, performance appraisal, and professional development are explained.
........................................................................................................................................................................
Nearly all executives understand the importance
of goal setting. And yet, most organizations have
no idea as to how to manage specific challenging
goals, or what are sometimes labelled “stretch
goals.”
1
Some organizations may ask employees to
double sales or reduce product-development time
from years to months, but fail to provide them the
knowledge to meet these challenging goals. The
assignment of ambitious goals without any guid-
ance on ways to attain them often leads to stress,
pressures on personal time, burnout, and in some
instances unethical behaviour. It is both foolish
and immoral for organizations to assign “stretch
goals,” and then fail to give employees the means
to succeed, yet punish them when they fail to at-
tain the goals.
The Lucent scandal is a compelling example of
what can happen when people feel undue pressure
to “make the numbers.” Richard McGinn, former
CEO of Lucent, prided himself on imposing “auda-
cious” goals on his managers, believing that the
push for performance would produce “dream” re-
sults. In 2000, McGinn pushed his managers for
results they could not deliver—not, apparently,
without some crossing a legal line.
2
The pressures
that McGinn applied were described in a com-
plaint that a former Lucent employee filed, which
charged that McGinn and the company had set
unreachable goals that caused them to mislead
the public. Empirical research provides support for
this assertion. High performance outcome goals
sometimes cause people to distort the truth regard-
ing goal attainment.
3
These findings point to a fault in the type of goal
that was set. In the above examples, a perfor-
mance outcome goal was set. Setting a specific
challenging learning goal, on the other hand, is
likely to be far more effective for discovering rad-
ical, out-of-the-box ideas or action plans that will
enable organizations to regain a competitive edge.
For example, consider what Arthur Martinez, a
former CEO of Sears, Roebuck and Company,
wrote in The Hard Road to the Softer Side:
4
Sears was in love with its past and entrapped
by it at the same time ...these kinds of things
happen to institutions all the time. They keep
playing yesterday’s agenda without recogniz-
ing that the world has changed and that it
continues to change every minute of the day.
They ride their old horses onto a modern bat-
tlefield, then puzzle about why they are losing
a war to an enemy who has tanks and ma-
chine guns.
Martinez concluded that had Sears realized that
the competitive landscape was changing, had
Sears placed a stronger emphasis on learning
what was changing and how to respond to these
changes, had Sears examined information that

Academy of Management Executive, 2005, Vol. 19, No. 1
........................................................................................................................................................................
124

was critical to the decisions that needed to be
made prior to the emergence of the crisis, and had
Sears sought feedback on their strategic re-
sponses, then Sears might not have found itself in
a “near-death” situation.
This paper explains when to set performance
versus learning goals to increase the productivity
of the workforce. With a performance goal, the goal
is framed so that the focus is on performance (e.g.,
decrease costs by 10 percent this quarter). In con-
trast, the instructions regarding a learning goal
are framed to focus attention on knowledge or skill
acquisition (e.g., find ten ways of developing a
relationship with end-users of our products).
Performance Goals: Examples of Success
The American Pulpwood Association found that
goal setting was an effective way to increase the
productivity of loggers.
5
Pulpwood crews were
matched and assigned to either an experimental
goal-setting group or a control group. The
sawhands were given a tallymeter to keep track of
the number of trees they cut down. The crews with
a specific challenging goal immediately out-per-
formed those in the control group. The assignment
of goals resulted in these workers seeing their
work as challenging and meaningful. Hence, job
attendance sky-rocketed as the employees began
to take pride in comparing their performance rela-
tive to the goal. They left work each day with a
sense of accomplishment and a sense of personal
effectiveness as a result of goal attainment.
The Weyerhaeuser Company found that setting
specific high goals leads to high performance of
employees in highly complex jobs.
6
Those engi-
neers and scientists in theR&Ddivision who
received praise, public recognition, or a monetary
incentive, but who did not set goals, performed no
better than those who were in a control group.
Those who participated in setting a specific high-
performance goal regarding their performance ap-
praisal increased their performance significantly.
In fact, they set significantly higher goals than
was the case where the boss assigned them uni-
laterally. The higher the goal, the higher one’s
performance.
The positive effects of setting specific challeng-
ing performance goals, in addition to organiza-
tional settings, have also been shown in sports
and in health care. For example, Swimmer John
Naber, winner of four gold medals and one silver
medal at the 1976 Olympics, attributed his success,
in part, to the performance goals he set. His distal
goal was to win a gold medal. He then set proximal
or sub-goals for each training session—to gain a
few hundredths of a second each day, week,
month, and year over a time span of several years
in preparation for the Olympics. In the self-man-
agement of one’s health, individuals who set spe-
cific challenging goals in a weight loss or smoking
cessation program lose more weight or smoke less
than individuals who strive to “do their best” to do
so.
7
When goals are set, the dieters and smokers
are able to evaluate their on-going goal-directed
behaviour accurately. Remedial action is taken
when there is a discrepancy between the goal that
is set and one’s actual performance. In contrast, an
abstract goal to “do one’s best” does not provide a
clear marker of progress.
Goal Mechanisms
Why does goal setting increase an employee’s ef-
fectiveness? First, specific challenging perfor-
mance goals affect an employee’s choice as to
what to focus on, as well as effort and persistence
in doing so. A goal directs an employee’s attention
toward actions which are goal relevant at the ex-
pense of actions that are not relevant. Second, em-
ployees adjust their effort to the difficulty level of
the goal. Third, they persist in their effort until the
goal is reached.
8
These three motivational mecha-
nisms alone, however, are not always sufficient to
attain a goal.
A fourth benefit of goal setting is cognitive
rather than motivational. On those tasks that are
complex for the individual, goal setting stimulates
the development of task strategies, based on one’s
knowledge, to attain it. For example, the Weyer-
haeuser Company discovered that unionized truck
drivers who had been assigned a specific high-
performance goal in terms of the number of trips
per day from the logging site to the mill started to
work “smarter rather than harder.”
9
Upon receiving
the goal, truck drivers developed strategies to at-
tain it. This included using radios to coordinate
their efforts so that there would always be a truck
at the logging site when logs were available to be
loaded. Performance increased because of produc-
tive reasoning on their part regarding the strate-
gies necessary to attain the goal. In short, these
people were drawing upon their existing knowl-
edge to attain their goal. All of them already knew
how to use a radio for communication purposes.
Because they purposefully chose to apply this
knowledge, productivity increased.
Motivation versus Knowledge Acquisition
Goal setting is viewed by most executives and
behavioral scientists as a motivational technique.
2005 125Seijts and Latham