1. Do you think there is a trade-off between the positive (high performance) and negative (increased stress) effects of stretch goals?
Setting goals is part of organizational life and a powerful way to keep employees aligned and clear about expectations. But how tough should the goals be? How high should you set the bar? Some leaders like to set goals at a low to moderate level, based on the concept that they want everyone to be successful. They believe that success ...view middle of the document...
The third approach is to make the goals so high that only the very best performers might attain them, but not too often. This is based on the premise that if you set the bar really high then everyone will work their hardest to go as far as they can.
However, stretch goals can have a tradeoff between the positive and negative effects. On the positive side, it can increase high work performance since it enables employees to reach their fullest potential. Sometimes employees find stretch goals very motivating and make it a challenge to attain it, because managers generally attach incentives such as recognition and other forms of rewards for attaining these goals. Nevertheless, stretch goals also have negative effects and this is the stress that employees go through when unrealistic goals are set by managers. Goals should be challenging and require a stretch - but employees should be able to see the possibility of achieving them based on their efforts and performance. You might, for instance, ask people to cut costs by half or reduce product-development time from years to months. Stretch targets are an artificial stimulant for finding ways to work more efficiently. They force you to think "out of the box."