Published: July 28, 2004 in Knowledge@Wharton From childhood on, individuals are told that setting goals for themselves will make them more diligent, more focused and generally more successful in whatever they set out to do – whether it’s win tennis games, ace their exams or become CEO of their company.

 

But goal-setting also has a dark side to it, according to a recent research paper by a Wharton faculty member and two colleagues. In addition to motivating constructive behavior, goal setting – especially when it involves rewards – can motivate unethical behavior when people fall short of the goals they set or that are set for them. The relationship between goal setting and unethical behavior is particularly strong when people fall just short of reaching the goal.

 

Consider recent business scandals. Executives have been caught cooking the books to meet the quarterly goals that Wall Street analysts expect. Salesmen report phony sales, or exaggerate them, manufacturers ship unfinished products and service centers perform unnecessary repairs – often in order to meet internal or external sales targets. In the education area, college administrators have been known to exclude students with low scores on standardized tests in order to hit target pass rates.

 

In “Goal Setting as a Motivator of Unethical Behavior,” Maurice Schweitzer, professor of operations and information management at Wharton, and colleagues Lisa Ordonez form the University of Arizona and Bambi Douma from the University of Montana, argue that while goal setting – a common managerial tool – can be used beneficially in organizations, it can also encourage people to misrepresent the success they have had in meeting certain targets. The paper appeared in June in the Academy of Management Journal.

 

The authors cite earlier scholarly research showing that “goal attainment is associated with psychological rewards, including positive self-evaluations and higher self-satisfaction.
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