5 Motivation Through Setting Goals- Lessons Learned 2007- Final

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MOTIVATION THROUGH SETTING GOALS: 
LESSONS LEARNED FROM A TECHNOLOGY 
1ORGANIZATION 
 
Issam A. Ghazzawi 
University of La Verne 
 
ABSTRACT 
 
In today’s intensely competitive, global economy, IT managers must seek creative 
solutions to motivate their subordinates in achieving organizational growth goals. While goal 
setting as a motivational strategy has been used and studied in many organizations, this paper 
recounts one California IT startup’s experiences in motivating its non-technical staff to attain 
targeted sales goals by setting sales performance and gross profit goals, obtaining employee 
commitment to achieving set goals, training and updating employee knowledge when necessary, 
and providing continuous feedback. This paper is a reflection on the experiences gained in an 
information technology organization. 
 
INTRODUCTION 
 
This experiential expository paper is based on consultations with the founder and 
managing director of a small growing Southern California IT products and services providing 
organization (commonly referred to in this industry as Value Added Reseller “VAR”). The 
management realized that one of the major challenges in moving this organization to the next 
level is providing its employees with very specific goals. It was everyone’s consensus that a 
general goal will lead to nowhere and that the admonition “do your best” is too vague. 
Through the process of goal setting, goal commitment, and feedback, the organization 
was able to increase its sales and profits annually after the year 2003. This growth in sales and 
profit came despite the challenges of assessing and developing sales and sales support people, 
and the implementation of the new sales processes. The overall experience was positive and 
rewarding for all employees, especially sales people. They experienced meeting their sales goals, 
getting higher commission checks, as a result of higher sales volume and higher gross profit 
margin, and receiving more rewards for meeting or exceeding their agreed-upon goals (referred 
to as quotas in this organization). Other, non-sales employees received quarterly bonuses as a 
percentage of the organization’s overall net profit. 
The purpose of this paper is to shed light on how non-technical sales and other personnel 
were motivated through the process of goal setting to achieve organization goals. Additionally, 
this study will answer the questions: Why was goal setting an important factor in the success of 
this IT products and services provider organization? What roles do goals play in motivating 
 
1 Journal of the Academy of Business Administration (ABA), Spring/Fall 2007, Vol. 12, No. 1&2. 
 
employees? What lessons can be learned from the experiences that might help managers in 
motivating their subordinates by setting goals? 
 
THE METHOD FOR MOVING TO THE NEXT LEVEL 
 
A great question has been circulating among the management team of this growing 
technology organization, “how to motivate the workforce, provide meaningful rewards for the 
employees, and move the organization as a whole up to the next level?” This idea was seriously 
discussed in the latter part of the fiscal year, during the fourth quarter of 2002. The method 
chosen was based on motivating all employees, including sales professionals, and establishing 
effective goals. Given this premise, the challenge was to develop a thorough plan that contained 
specific goals, communicated these goals to employees, established their commitment, and 
rewarded them for achieving these goals. 
 
THEORITICAL FOUNDATION 
 
The Importance of Motivation in the Workplace 
 
According to Latham and Locke (1979), the problem of motivating employees has 
frustrated managers for many years. The reason behind such frustrations and difficulties is that 
motivation comes from within the individual and as a result cannot be observed directly (Latham 
& Locke, 1979; Staw, 2004). While most mangers are not able to change employees’ 
personalities, they can use incentives as a method to direct employees’ energies to achieve the 
goals of the organization (Latham & Locke, 1979). The question a manger therefore faces is how 
to motivate? According to Schermerhorn (2005), the term motivation is “used in management 
theory to describe forces within the individual that account for the level, direction, and 
persistence of effort expended at work” (p.351). Another perspective of motivation is “the 
willingness to exert high levels of effort toward organizational goals, conditioned by the effort’s 
ability to satisfy some individual need” (Robbins, 1996, p. 212). A manger that motivates his/her 
subordinates creates conditions that inspire people to consistently perform at the required level 
(Schermerhorn, 2005). Motivation is a serious subject in today’s organizations. Organizations 
want motivated workforces, and consider managers, who have the ability to motivate other 
employees, to be successful managers (Francesco & Gold, 2005). 
 While there are dozens of different theories about motivation, only five have proven as 
the most practical or influential, namely Maslow’s needs hierarchy theory, Herzberg’s two-factor 
theory, job enrichment theory, expectancy theory, and goal setting theory (Kreitner, 2005). 
Accordingly, it is very important to differentiate between the theories of motivation. There are 
basically two types of theories: (1) Content theories of motivation, which describe the factors 
that cause individuals to add effort into their work, including Maslow’s Hierarchy of Needs, 
Herzberg’s Motivation-Hygiene Theory, and McClelland’s Needs Theory; and (2) the process 
theories of motivation, which focus on how the individual becomes motivated including 
Reinforcement Theory, Goal Setting Theory, Expectancy Theory, and Equity Theory (Francesco 
& Gold, 2005). Process theories focus on a deeper level of analysis than the content ones, and 
tend to be more applicable for both the United States and other countries, although some cultural 
variables could limit the application of some of the theories (Francesco & Gold, 2005). 
 
Motivating IT Professionals 
 
 Motivating and retaining IT professionals is a very challenging task for management 
(Thatcher et al., 2006, Smits et al., 1993). An important reason is that technology and the 
changing knowledge management practices have redefined the nature of work (Horwitz, et al., 
2003). Research on the subject of motivating information technology professionals revealed that 
when hygiene factors -physical working conditions, job security, company policies, quality of 
supervision, salary, and` relations with others (Herzberg et al., 1959) are high, IT workers are 
motivated and likely to continue in their current job (Tan & Igbaria, 1994). While hygiene 
factors are important factors in motivating IT professionals, intrinsic motivation has far more 
influence on IT workers’ attitudes and behavior (Thatcher et al., 2006). The findings from 
Thatcher et al., (2006), suggest that intrinsic motivation positively affects intrinsic job 
characteristics such as autonomy or skill variety that IT workers seek. Additionally, intrinsic job 
satisfaction has a positive relationship to job attitudes-meaning job satisfaction and affective 
organizational commitment (Thatcher et al., 2006). 
Research findings on the subject of motivating and retaining knowledge workers, 
concluded that factors cited as important include “challenging work, creating a work culture 
permitting relative autonomy, celebrating achievement and developing a sense of purpose, 
direction and excitement” (Horwitz et al., 2003, p. 29). Additionally, IT professionals cited the 
work itself as the most important factor of their job (Couger 1988). Different studiesrevealed 
that the most effective motivational strategy is practices that allow knowledge workers freedom 
to plan their work (Baron & Hannan, 2002; Horwitz et al., 2003; kinnear & Sutherland, 2002). In 
addition to that, while having a challenging work environment and the need for a regular contacts 
with upper management is a highly effective motivational tool, having an access to leading-edge 
technology is more effective motivational factor for knowledge workers (Horwitz et al., 2003). 
Other studies suggested that information technology professionals and managers have 
lower social needs and higher achievement needs than other people in the workplace (Bartol & 
Martin, 1982; Couger, 1988; Couger & Zawacki, 1980). On the other hand, Ferratt and Short 
(1986) contended that IT people are as motivationally normal within an occupational group as 
any other workers. Ferratt and Short’s (1986) findings were based on a study of information 
systems employees in the insurance industry. The controversial difference between Ferratt and 
Short findings and that of other scholars could be explained by differences in the levels of 
occupation of IS and non-IS people rather than differences in people themselves (Ferratt & 
Short, 1986). On the other hand, research by Griesser (1993), found that “IS developers have 
higher personal growth needs than IS maintenance personnel. Development personnel prefer jobs 
which provide the opportunity for high personal growth” (p. 30). Thus, the implications of 
Griesser’s finding are that IS developers will react positively to opportunities that provide an 
opportunity to utilize their abilities (Griesser, 1993). However, the need for high personal growth 
could be accomplished by providing access to “leading edge technology, job enrichment, job 
enlargement, empowerment and self-managed teams” (Griesser, 1993). Griesser’s conclusion is 
consistent with Couger (1988) and Couger & Zawacki (1980) findings that skill variety, task 
identity, task significance, autonomy and job feedback were the top motivators of technology 
professionals. 
While recognizing the influence of the aforementioned five motivational theories and 
researches on motivation in the workplace, this paper will only focus on the concept of goal-
setting as a technique of motivation as it was applied in this Southern California, IT products and 
services provider organization. 
 
 Goal Setting 
 
A goal is defined as what an individual is planning to accomplish, it is the aim or the 
object of an individual’s action (Brown & Harvey, 2006). According to Collins (1999), goals 
provide people guidance and a unified direction in the organization. 
Goal-Setting Theory (Locke & Latham, 1990, 2002) was developed in the field of 
industrial-organizational psychology and organizational behavior with the purpose of explaining 
and predicting motivation at work (Locke & Latham, 1990, 2002). According to Locke and 
Latham (1990, 2002), this theory focuses entirely on conscious motivation. In other words, it 
shows the effect that goal setting has on people’s performance (Francesco & Gold, 2005). 
Research on Goal Setting Theory, conducted mainly in the United States, produced a widespread 
support for such theory (Locke & Latham, 1990; Pinder, 1984). The main idea of this theory is 
that people are motivated by their intention to work towards a goal (Locke, 1968). According to 
Locke’s model, a goal generates four mechanisms to motivate people: 1) Goals channel people’s 
attention toward achieving the desired goal while creating an understanding of where the 
organization is going and the importance of getting there (Richards, 1986; Griffin, 2005; 
Kreitner & Kinicki, 2007); 2) Goals regulate one’s effort and motivate one’s to act, and can 
motivate people to work harder especially if attaining the goal is likely to result in rewards 
(Thompson,1997; Griffin, 2005; Kreitner & Kinicki, 2007); 3) Goals increase persistence to 
accomplish an agreed-upon goal; and 4) Goals help people develop task strategies and action 
plans to achieve their goals, which facilitate future goal setting (Kreitner & Kinicki, 2007; 
Griffin, 2005). 
Goal setting is one of the most effective and easiest ways to spur motivation (Miner, 
2003; Osland et al., 2007). The theory of goal setting asserts that specific goals must be difficult 
as opposed to easy ones. Goals that are characterized with difficulties lead to better and higher 
performance than easy goals or goals that are characterized with the concept of “do best” (Locke 
& Latham, 1990, 2002; Stajkovic et al., 2006). As it was prescribed by Gary Latham and Edwin 
Locke, the basic premise of goal-setting theory is that the actions of individuals are dependent on 
their conscious intentions and values (Latham & Locke, 1991, 1988; Locke & Latham, 1991; 
Locke et al., 1981). Researchers have concluded that performance increased when specific goals 
were set, as opposed to when vaguely defined or easy goals were set (Francesco & Gold, 2005). 
To be successful at attaining goals, a few conditions must be met if goals are to be 
attained: Feedback should be provided on the progress in relation to goals been pursued, 
commitment to the goal(s) must be present, and there must be knowledge of the task (Locke & 
Latham, 1990, 2002; Stajkovic et al., 2006). Research suggests that much of the achievement 
based motivation, namely intrinsic interest, strategy use, and persistence, that seeks to establish 
and maintain high levels of achievement quality, can be explained by the various goals 
individuals apply to the overall context of achievement (Ames, 1992: Ames & Archer, 1988; 
Butler, 1987, 1993; Dweck & Leggett, 1988; Elliott & Dweck, 1988; Grant & Dweck, 2003; 
Nicholls, 1984; Rawsthorne & Elliot, 1999; Utman, 1997). 
According to Grant and Dweck (2003), “there are some disagreements and some 
conflicting findings on the nature of these relations. Specifically, researchers disagree on how to 
best define and operationalize the major classes of goals and on the precise impact of these goals 
on motivation and achievement” (p.541). However, it is important to note that when individual 
goals align closely with organizational goals, individual accomplishments will more likely add 
value to organizational output such as its products and services (Murrell & Meredith, 2000). A 
review of various studies on goal setting produced the following practical insights: 
 
Goal Difficulty 
 
Based on Locke and Latham’s research outcomes on the subject of goal setting, difficult 
goals are more likely to generate higher performance results than less difficult goals (1990). 
However, too difficult or unrealistic “impossible to achieve” goals will not result in better 
performance (Locke & Latham, 1990; Griffen & Moorhead, 2006). Griffin and Moorhead 
defined goal difficulty as “the extent to which a goal is challenging and requires effort” (p. 144). 
When individuals work to achieve goals, it is fair to believe that they will work harder to achieve 
such goals if they are difficult but realistic rather than too difficult and impossible (Griffin & 
Moorhead (2006). If a sales manager asks his/her sales force to increase sales by 250 percent, 
his/her subordinates will probably ignore their manager’s request and believe it as unreasonable. 
On the other hand, if the same sales manger asks the sales force to increase sales by 20-25 
percent, this request would constitute a difficult goal that is perceived as realistic and challenging 
to the work force at the same time, thus making achievement of the goal more likely (Griffen & 
Moorhead, 2006; Locke & Latham, 1990). 
 
Goal Specificity 
 
Goal specificity is how precise and clear the goal is (Griffen & Moorhead, 2006). While a 
goal of “increasing sales” is not very specific, a goal of “increasingsales by say 10 percent in the 
next quarter (3 months)” is clear and precise-meaning specific. Research evidence shows that 
specific goals, rather than vague or “do your best” goals will lead to higher level output (Robins, 
2007; Locke & Latham, 1988; Locke & Latham, 1990).In organizations, goals that are related to 
production, sales, costs, profits, and growth can be stated in precise and clear terms. Contrary to 
that, organizational goals such as improving employees’ morale and job satisfaction, or 
organizational and employees’ ethics and social responsibility, are very difficult to quantify or to 
state in clear and precise terms (Griffen & Moorhead, 2006). Studies have shown that specificity 
of goals is correlated with better performance (Latham & Locke, 1979). Goals that are specific 
and relatively difficult can motivate people to reach those goals especially when achievements 
are likely to be rewarded (Thompson, et al., 1997). 
 
Goal Acceptance and Commitment 
 
Goal acceptance is “the extent to which a person accepts a goal as his or her own” 
(Griffen & Moorhead, 2006, p. 145). On the other hand, goal commitment is the degree to which 
an individual is interested in pursuing and accomplishing or realizing his or her own goal 
(Griffen & Moorhead, 2006). The sales manager who is committed to doing everything he or she 
can in order to increase sales by 10 percent in the next quarter, including more customer visits 
and customers interaction, providing product evaluation units to customers or prospects, 
demonstrating products to customers, calling and following up on leads, providing more sales 
training to subordinates, and doing better customer account mapping and planning, is a good 
example of someone committed to achieving set goals. 
 
Feedback 
 
Feedback is the extent of existing discrepancies between employees’ commitment to the 
set goal and what they have accomplished so far. People tend to perform better when they 
receive feedback on their progress. Evidence shows that when employees are able to monitor 
their own progress through self-generated feedback, they tend to be more highly motivated than 
when they get externally generated feedback (Ivancevich & MacMahon, 1982; Locke, 1996). 
Latham (2001) identified a few important factors that will lead to goal acceptance and 
commitment. These factors include, individual participation in the goal setting process, making 
the agreed upon goals challenging but not impossible, and rewarding employees for their 
achieved goals. While giving employees the opportunity to participate in goal setting might lead 
them to try harder, there is mixed evidence regarding the superiority of participative over 
assigned goals (Harkins & Lowe 2000; Latham et al. 1988; Ludwig & Geller, 1997). Generally 
speaking, because every situation is different, and every action depends on a given situation, 
participative goal setting will lead to better performance in some instances while assigned goals 
will lead to better performances in other instances. A major advantage of participative goal 
setting when appropriate is that it tends to increase its acceptance (Erez et al., 1985). 
It is important to add that an individual’s performance is determined by the interaction of 
his or her goal, directed effort, skills and abilities, with organizational support (Griffen & 
Moorhead, 2006). While positive organizational support and a positive environment will help 
performance and provide tools and logistics to achieve goals, negative organizational support 
will generally lead to failure in pursuing goals (Griffen & Moorhead, 2006). Finally, it is 
important to note that an individual ability to perform at the goal level is impacted by an 
individual belief in her or his ability to perform. Chowdhury (1993) concluded that the impact of 
increase quota for sales people is correlated with self-efficacy; it is stronger for individual with 
high self-efficacy than for individuals with low self-efficacy. 
 
RESEARCH PROPOSITIONS 
 
Based on the aforementioned theoretical foundation, the current research proposes that 
there will be a strong relationship between goal setting and organization’s growth. It is expected 
that employees will be more focused and motivated to pursue their committed goals. Therefore, 
the following propositions are advanced: 
 
Proposition 1: Having a goal will serve as a motivator, employee will strive to actualize 
such goals. 
Proposition 2: Setting difficult rather than impossible, and specific goals will more 
likely lead to a higher performance. 
Proposition 3: Accepting of and commitment to goals by employees’ will lead to 
achieving said goals. 
Proposition 4: Providing a feedback on employee progress will likely lead to a better 
performance. 
 
 
 
A PLAN THAT WORKS FOR THE ORGANIZATION 
 
The Organization 
 
Located in southern California, the subject organization is a small growing provider of 
technology hardware, software, and services. Its product offerings include computer and 
networking accessories, cables and connectivity hardware, computers, peripherals, printers, 
displays, printer consumables, and software. Its services include installing hardware and 
peripherals into systems. It provides standard and custom hardware configuration for personal 
computers (PCs), laptops, printers, and servers. Services include the installation of memory, hard 
drives, digital videos editing, network cards, modems, video cards, and other peripherals. 
Software services include the installation and configuration of software in systems to customers’ 
requirements. While this organization has couple large customers with more than 100 
workstations, this organization is more focused on small and medium size corporate customers. 
Additionally, this organization has a functional structure with sales being its largest 
department followed by its services department. In 2000, the company had only eight employees 
of which six were sales professionals and grew to 21 employees in 2005 of which 13 were sales 
professionals. Currently, it employs more than 30 employees. For the time being, the sales 
department directly reports to the president. Each sales professional is to develop business 
opportunities and coordinate sales activities within his or her assigned list of existing named 
accounts, add new customers, and turn these opportunities over to the team for fulfillment and 
support. It is important to note that this organization has many vendor partners including Apple, 
HP, IBM, Microsoft, and Toshiba. 
 
The Vision 
 
The vision called for making the organization a regional leader in providing technology 
products and services on the one hand, and increasing employee productivity and, in turn, 
increasing organizational sales and profitability on the other hand. To do so, the management 
believed that a key to the successful implementation of such a vision is to improve employee 
morale overall, reducing turnover, particularly in the sales department, and create lasting 
excitement in the workplace. Because of this vision and belief, few productive meetings to 
address and find answers to all of the above-mentioned challenges were conducted. A thorough 
internal analysis and evaluation of the organization’s strengths and weaknesses as well as 
organizational opportunities and threats were addressed. Analysis touched every aspect of the 
organization with a major goal of identifying its core competencies or what this organization 
does exceptionally well compared to its competition and how the organization could use its 
competitive advantage to increase its products, services, and solutions sales and increase 
profitability. 
 
Strategy and the Organization’s New Goals: Specific and Challenging 
 
An agreement has reached to create strategies with the middle management team and the 
employees that wouldleverage the organization core competencies by establishing and 
committing to a good challenging goal of increasing sales by forty percent for the year 2003, 
which translated into an increase of ten percent per quarter. As a follow up, a sales meeting was 
called with all sales professionals to discuss sales goal and formulate strategies to accomplish it. 
Discussions touched on every strategic customer the organization had at the time and identified 
good prospects that the organization needed to pursue. A go to market strategy was mapped out. 
This strategy contained a list of specific action items that were formulated per customer 
identifying its staging dates, its completion dates, its needed resources, and assigned who was the 
responsible implementer (s) or who was accountable to do what. This strategy also identified 
ways and actions needed to add new business from both existing customers (incremental 
business) and prospective customers. 
As a follow up to this sales meeting, a series of planning meetings were conducted. These 
meetings were to be held with functional managers would be responsible for providing the 
support for the sales group-namely the operations/purchasing manager, the service manager, and 
the accounting manager. These meetings were to provide a better understanding of needed 
strategies and plans to support and grow business with customers, as well as a commitment to the 
successful implementation of the new strategies. Each functional manager identified action items 
needed in his or her area and made plans to better support each team. An example of action items 
identified for the operations/purchasing department, included the signing of a cost plus 
partnership agreement with suppliers and distributors for better margins, identification of 
vendors who would sponsor end user customers’ activities using their marketing development 
funds program, assisting sales professionals with vendor road map. It is important to note that 
these meetings created a blue print to increase sales by ten “10” percent on quarterly basis or 
forty “40” percent per year per team. All sales teams felt that forty percent per year or ten 
percent per quarter was an aggressive yet an achievable goal. 
 
 
Commitment and Incentives 
 
All sales professionals and functional managers were very confident about their ability to 
pursue and succeed in achieving this challenging and aspiring goal. An incentive to sales and 
non-sales personnel was proposed as follows: If adjusted gross profit reached or exceeded an 
increase of ten percent over the previous quarter, every sales professional would get an extra two 
percent bonus on his/her own sales in addition to the on-going sales commission. Additionally, 
all non-sales employees would share a five percent pot of the overall quarterly net profit of the 
organization. As a result, this goal-based incentive produced an unusual commitment from all 
employees with no exceptions. On the one hand, sales professionals felt that the incentive to non 
sales employee was a great idea and would enhance non- sales employees’ delivery, support, and 
increase their commitment to a greater collaboration with sales professionals and enhance 
customer service, internally and externally-where internally refers to sales and non-sales 
employees within the company, and externally refers to customers and vendors. On the other 
hand, non-sales managers and employees were so happy that the organization recognized their 
important role in supporting and facilitating sales. It also showed an acknowledgement from 
management to their important role in supporting customers. All employees believed that this 
goal-based incentive would be a key to a successful pursuit of the organizational goal of 
increasing sales volume to a gross profit by 40 % for the year. 
 
 
 
Plan Implementation and Feedback 
 
The new goal based incentive plan was kicked off in the first week of January 2003. All 
managers (functional and sales professionals) had a weekly follow up meetings on their plans. 
Products training and vendor road maps meetings were conducted by vendors for sales, 
technical, and purchasing employees. Other non-technology training and professional 
development workshops were facilitated for managers and other employees. Sales meetings were 
conducted on a weekly basis to follow up on the specific action plans that were agreed upon-
including more customer interactions and communication. All sales orders information and 
month to date sales and service figures were available and accessible by all employees and at 
anytime on the company’s internal workflow database. What happened by the end of March 
2003-the end of the first quarter was very astonishing, namely an increase of 28% in the 
company’s gross profit. Additionally, other 2003 quarters showed an increase of 39%, 62%, and 
84% respectfully for quarters 2, 3, and 4. By the end of 2003, the annual percentage increase in 
the organization’s gross profit exceeded 53%. For the following years 2004 and 2005, the annual 
increases were 81% over 2003 and 60% over 2004 (quarterly increases were 80%, 87%, 85%, 
and 74% respectfully for quarters 1,2,3, and 4 of year 2004. Quarterly gross profits were 66%, 
63%, 56%, and 57% respectfully for quarters 1, 2, 3, and 4 of year 2005). 
As a result, all sales professionals had exceeded their quarterly goal of ten “10%”, got 
their quarterly bonus of two “2” percent of the gross profit, and all non-sales shared the five “5” 
percent of the organizations quarterly net profit bonus based on their pro-rated salary. A 
summary of the organization’s success as determined by an annually and quarterly gross profit 
increases are shown in the table and figure below. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TABLE 
ANNUAL ORGANIZATION’S GROSS PROFIT “G.P.” IN US $ 
 
Year 2000 2001 2002 *2003 
2004 
2005 
Quarter 1 85,000 97,000 101,000 129,000 233,000 387,000 
Quarter 2 89,000 101,000 103,000 143,000 268,000 437,000 
Quarter 3 87,000 100,000 105,000 170,000 314,000 489,000 
Quarter 4 90,000 98,000 109,000 201,000 349,000 548,000 
Total Gross 
Profit/year 
351,000 396,000 418,000 643,000 1,164,000 1,861,000 
 
Targeted 
Goal 
N.A N.A. N. A. 40% 40% 40% 
Actual Gross 
Profit 
Growth Rate 
N.A. N.A. N.A. 53% 81% 60% 
No. of sales 
Professionals 
6 6 8 10 12 13 
**Gross 
Profit/Sales 
Person 
58,000 66,000 52,250 64,300 97,000 143,154 
No. of Total 
Employees 
8 9 11 15 18 21 
 
*2003 is the implementation year of the new “goal” strategy. No separate gross profit 
information per sales person is available for all years. 
** Gross profit per sales person is the total annual gross profit divided by the number of sales 
professionals. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIGURE 
ANNUAL ORGANIZATION’S GROSS PROFIT BEFOR AND AFTER THE 
IMPLEMENTATION OF GOAL SETTING PROCESS 
 
Annual GP
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
1 2 3 4 5 6
Year
Annual GP
 
 
CONCLUSION 
 
As Argote (2005) states, “Organizations can learn not only from their own direct 
experience, but also from the experience of other organizations” (p. 44). Based on the several 
empirical studies that supported the concept of goal-setting as a motivational tool for 
organizations and employees (Locke & Latham, 1990), the founder and the managing director of 
this company was so optimistic that the outcomes of their new strategy would be positive,that 
Southern California IT organization implemented this concept in the early 2003 and was able to 
actualize unusual growth. 
Goal setting was very helpful to this organization. This organization experienced an 
unusual increase in its sales and gross profit based on the concept of setting performance goals 
for the employees; obtaining their acceptance and commitment to these goals; providing them 
with the required organizational support; and facilitating a continuous feedback of their 
performance. This experience revealed that a higher correlation between the number of sales 
professionals and their output as measured by their annual and quarterly gross profit existed after 
the implementation of the goal-setting concept than before the implementation. 
In its first implementation year (i.e. 2003), the organization realized an increase of 53 %. 
In the upcoming years (i.e. 2004 and 2005), this organization was able to post an increase of 81% 
for the year of 2004 over 2003 and 60% for the year of 2005 over 2004. In addition to that, its 
employees received meaningful awards (while sales professionals received an extra 2% quarterly 
bonus of their gross revenue, other non-sales employees received a portion of the 5% of the 
company’s quarterly net profit distributed on a pro-rata basis). In addition to that, employees 
were convinced that they were partners rather than employees and felt appreciated. Reflecting on 
this experience with this organization revealed that perhaps the most significant contributors to 
the success of this technology provider organization were its focused management; the 
challenging and specific goals it planned for; and the good internal communication. Additionally, 
other factors contributed to such success including the employees’ willingness to work toward 
achieving the goals; the available, up to date feedback via the organization’s internal workflow 
system; the investment in training and development; and the rewards when goals were 
accomplished. 
 
LESSONS LEARNED, LIMITATIONS, AND SUGGESTIONS FOR 
FUTURE RESEARCH 
 
Based on the experiences of this Southern California IT organization, the following are 
the major lessons learned: 
Lesson 1: Be clear and very specific about your strategic goal(s). Identify and clarify 
what you need to achieve. If it is sales goals, be very specific about what your sales revenue 
should look like (an example is a 10% increase of sales revenue on a quarterly basis). 
Lesson 2: Make sure that goals are reasonably difficult, rather than easy or impossible. 
Employees perform better when goals are challenging but attainable. 
Lesson 3: Involve people in the formulation strategy of goals especially if these goals 
directly affect them. Employees tend to accept and easily commit to goals if they were part of the 
formulation process. 
Lesson 4: Train and develop your managers and employees. Teaching employees how to 
do the job enhances the chances of their success and helps the organization in its cost saving 
overtime. Additionally, providing programs for managers and employees to develop new skills 
needed for today and for tomorrow’s job is very critical to the human and to the organizational 
growth. 
Lesson 5: Provide performance feedback. Employees tend to perform better when they 
are provided feedback on their progress toward the goals. Make such feedback timely. 
Lesson 6: Create an effective reward system. Employees expect that they will be 
rewarded for the creation of the effective goals and for the successful realization of these goals. 
Lesson 7: Make your employees and managers feel important in your organization. 
According to Maguire (2001), for employees to create, produce, and achieve organizational 
goals, they must feel needed, wanted, and respected. 
 
The current experiential research attempted to add to the literature by implying that the 
application of the concept of goal setting was successful at this Southern California IT company. 
The concept of goal setting motivated its employees to perform by exceeding their set goals. As 
a result, the organization grew and posted higher sales volume and gross profit. 
One limitation of this study was that the subject organization is an IT Value Added 
Reseller. This could limit its results to other non-IT organizations. Therefore, the lessons learned 
cannot be generalized. While the concept proved success in certain settings, future research 
might produce different results in other settings. Future research encompassing organizations in 
various industries and with different sizes is needed to ensure the application of the findings to 
the general population of organizations. 
Another limitation of the study was that the organizational environment is unique. The 
subject organization has a genuine management. Its focused leadership is high on both people 
and task dimensions. The working environment is a fun and a friendly place. Assuming that all 
organizations will have the same proper conditions will be a mistake. Future research should 
investigate the role of leadership on the implementation of goals setting. 
 Finally, a limitation of this study was its goal setting results base. While there’s no one 
best way to motivate, this study relied on the concept of goal setting to help the organization 
move to the next level. Other concepts might be as effective as or more effective than goal 
setting to help motivate employees’ and grow business. This organization did not test other 
techniques to test its applicability to its business. Future research should investigate other 
concepts to determine its applicability and effective in the workplace. 
 
NOTES 
 
An earlier research titled “setting goals for employees and keeping them focused: The 
impact on the bottom line” was presented at the national Conference of the Academy of Business 
Administration (Ghazzawi, 2007). While this research is a continuation of the aforementioned 
paper, it explores the relationship between motivation and goal setting and provides lessons that 
the author learned while providing consultation services to a Southern California technology 
organization. 
 
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ISSAM A. GHAZZAWI is the professor of management in the College of Business and Public 
Administration at the University of La Verne in La Verne, CA. He received his Ph.D. from the University 
of Pittsburgh. He is also a consultant for several Southern California organizations. His research and 
consulting services focus on organizational development; organizational and individual productivity; 
employee motivation and job satisfaction.Over the last ten years, he served on the channel advisory board 
for few organizations including Lexmark, Lenovo USA, Microsoft, and Targus. He can be reached at 
ighazzawi@laverne.edu.