When Goal Setting Goes Wrong

Beyond just every New Year’s Eve, there’s a constant drumbeat to set goals.   That’s meant to encourage us to adopt a goal-setting mindset of  to avoid past failure and achieve desired objectives in the coming years. But striving for a goal is not always beneficial, from an ethical perspective.  Without vigilance, goal setting can go very wrong.

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Arizona State University’s Assistant Professor of Management David Welsh and Lisa Ordonez of the University of Arizona reviewed 50 years of research showing that setting goals may have unintended negative results. Of course, the findings indicate that many companies and institutions use goals as motivators to focus energy on a desired outcome.  The surprising finding was that the presence of goals actually increases the likelihood of unethical behavior.

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“Where does one draw the boundary line?” says Welsh. “Thinking of new ways to serve customers is great, but thinking creatively about getting around the rules of accounting is not.” Accordingly, Welsh emphasizes the need to use creativity within context.  For example,  brainstorming when it is appropriate and avoiding a mindset of moral justification.

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Creativity, too, is something you should  reconsider in terms of the context.  Managers and individuals need to develop greater awareness of the dark side of creativity.   It’s a pitfall that can be used to justify unethical behavior,  such as finding legal loopholes, hiding accounting truths or avoiding compliance violations.  In addition, companies  must understand that employees who are left unchecked may descend the ethical slippery slope. In the end, staying on the right ethical path is all about mindset, says Welsh.  But Welsh has offered some guidelines to help you steer clear of danger.

To avoid ethical pitfalls:

• Maintain and cultivate a prevention-focused mindset and business culture.
• Encourage ethical behavior.  Ask employees to be vigilant in identifying financial mistakes rather than being creative in trying to find financial loopholes.
• Establish and, most importantly, enforce a code of ethics.
• Address questionable employee conduct to reduce escalation of issues over time.
• Demonstrate ethical behavior as a leader by setting the tone from the top.
• Consider the negative ethical, emotional and performance-related effects of goal setting.
• Watch for unintended consequences associated with goal-oriented reward systems and pay for performance programs.
• Remember that even the smallest ethical transgression, if left unchecked, may snowball into larger problems over time.  And, of course,  that can  lead one down the unforgiving slippery slope.

Setting goals is part of your  life, and in particular your  business life.  But the goals should never become more important than maintaining ethical behavior.  By using these common-sense guidelines, you can achieve your goals and maintain your honor. Not to mention stay out of jail!

Images:  Slippery slope Helen K  Ethics Louisa-Chan