Adverse effects of perceiving goals as invariable and the moderating roles of pay-for-performance and desire for money

Abstract

Setting goals and evaluating goal attainment are pivotal performance management activities that may have adverse unintended consequences on employee outcomes, their organizations, and even society at large. In the present study, we investigate the associations between perceiving goals as invariable and employee outcomes, and whether these associations are moderated by pay-for-performance-contingency and individual differences in desire for money. Perceiving goals as invariable refers to the extent to which employees believe that goals are absolute standards that must be met even though they are not believed to contribute to, or even conflict with, work performance. In a two-wave study of 585 employees from various organizations and countries, we found that perceiving goals as invariable was negatively associated with intrinsic motivation and positively associated with extrinsic motivation and job-related anxiety. In addition, the negative association between perceiving goals as invariable and intrinsic motivation was strengthened by pay-for-performance based on individual measures. In contrast, employee differences in desire for money weakened the associations between perceiving goals as invariable and intrinsic motivation, extrinsic motivation, and job-related anxiety. These findings highlight the importance of considering contextual influences in understanding the adverse effects of goal-setting in organizations.