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Set specific goals to
increase productivity

Executives in today's organizations are facing increased competition, often from companies in other countries where labor is cheaper. Given this pressure, American executives often find that they must expect more productivity from their workers. Productivity can take many forms. For manufacturing organizations, it can take the form of more units per day, whether the units are shirts, kitchen appliances, computers or automobiles. For service organizations, productivity takes the form of customers served, potential clients contacted, and ratings of service quality by recent customers.

In attempts to increase productivity, managers and workers can collaborate and set goals for their workplaces. They can examine past records of production, study what the competition is doing, then set goals whose achievement will allow the company to stay in business.

What form should the goals take? Should managers encourage general goals such as "Do your best" or "We need to work harder this year?" Or are specific goals more effective, such as specific numbers of appliances to be produced or potential customers to be contacted?

The University of Maryland's Edwin Locke has carried out extensive research on goal setting and has concluded that goals that involve specific targets are more effective than general goals. He recommends that managers and employees jointly set specific goals and if possible put them in numerical terms. "We will increase revenues by 15 percent" is more effective than "we will sell more products."

Some companies use rating scales, and customers rate the service they have received. If a seven-point scale is used, a score of one would indicate very poor service, and a score of seven would indicate excellent service. The goal of "We will increase customer evaluations a full scale point on our seven point scale" is more effective than "We will serve customers better."

The goals should be challenging. Goals that are too easy to reach will not motivate workers, and goals that are impossible will lead to frustration. The best goals are those that employers and workers feel are challenging and attainable if people focus their efforts and work together. As part of the goal setting, specific dates for accomplishment should also be set, such as one month from the present time or a year into the future. People should be given feedback about their progress toward goal accomplishment, and they should be rewarded for their successes.

To be effective, goal setting must involve the participation of both employers and workers. All people in an organization must understand the amount and type of work that will be needed. Further, they must accept the goals as their own and not as burdens imposed on them by unseen company executives.

As with all forms of workplace participation, there must be a history of trust among employers and workers. In some companies, workers may feel that management has broken promises or has treated previous suggestions for improvement in a cavalier manner. If this is the case, then a new round of participative goal setting is unlikely to increase company performance. With a history of poor employer-worker relations, managers will have to invest time and energy into developing workplace trust.

Once trust is established, cooperative goal setting can then be introduced.

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