Goal-setting theory is one of the motivational theories applied in industrial/organizational psychology. The theory states that people are motivated by the desire and intention to obtain a desirable outcome (Steel & König, 2006). A multinational firm realized that employees’ productivity was decreasing. The employees were 65% productive compared to 71% in the previous year. The leaders decided to apply the goal-setting theory to increase productivity. They met with the employees to discuss the need for setting goals. Then, they collaboratively set a SMART goal and put it into action. The goal was to increase employees’ productivity to 72% by the end of the fourth quarter. By the end of the 4th quarter, employees were 69% productive. Although the set goal was not realized within the time frame, there was an improvement. The action plan continued and by the end of the 2nd quarter in the following year, employees were 76% productive.
Motivational factors have a positive impact on performance in various situations. For example, when businesses notice increasing missed deadlines, they set SMART goals. This motivates employees to work harder to achieve the goals increasing organizational performance. Where boredom is the issue, managers use recognition and regular feedback to motivate employees to increase their performance (Latham, 2011). When the problem is an unconducive working environment, managers create a motivational organizational climate that makes employees more productive. Various strategies can be used to enhance motivation and performance in various situations (Nabi et al., 2017). The first strategy is using extrinsic motivators. This strategy is appropriate when people lack an internal desire to engage in a certain activity. The other strategy is using intrinsic motivators. This strategy is appropriate where people need to complete a task that they find pleasant.
Latham, G. (2011). Work Motivation: History, Theory, Research, and Practice. SAGE Publications, Inc.
Nabi, N., Islam, M., Dip, T. & Hossain, A. (2017). The Impact of Motivation on Employee Performances: A Case Study of Karmasangsthan Bank Limited, Bangladesh. International Journal of Business and Management Review, 5(4), 57-78.
Steel, P., and König, C. J. (2006). Integrating theories of motivation. The Academy of Management Review, 31(4), pages 889–913.