The Performance Effects of an Ability-Based Approach to Goal Assignment

Abstract

Some organizations have begun to target their goal-setting method more closely to the ability levels of their employees. In this article, we report the results of a laboratory study of 138 undergraduate students, which shows that these “ability-based” goals are more effective at improving performance than a “one goal for all” approach, where everyone is assigned the same performance target. Results from repeated measure tests and other analysis of variance tests show that lower-ability individuals in the ability-based goal condition outperform those in the one goal for all condition. Lower- and moderate-ability participants in the one goal for all condition also experienced larger decreases in performance in later rounds.

Keywords:

• goal setting
• ability-based goals
• incentives
• laboratory study

Acknowledgments

We thank Leslie Berger, Alan Douglas, Andrea Drake, Suresh Kalagnanam, Khim Kelly, Natalia Kotchetova, Ed Locke, Sean Peffer, and Steve Salterio for their comments on earlier versions of this article as well as participants at the 2006 CAAA Annual Conference, the 2006 Academy of Management Annual Conference, the 2006 MAS Mid-Year meeting, the 2006 AFAANZ Annual Conference, and workshop participants at Queens University, the University of Chicago, University of Waterloo, and the University of Cincinnati. We thank the Canadian Institute of Chartered Accountants and the Social Sciences and Humanities Research Council for financial support.