‚ÄčA study that appeared in the July 2013 issue of the Journal of Applied Pschology (volume 98,pp. 540-548), by Craig Crossley and his colleagues, focused on how the proactivity of senior-level managers affects middle- and lower-level managers. Proactivity involves tasking initiative to improve current condition, as well as creating new ones rather than passively accepting current company conditions. As an aside, it is noteworthy that proactivity correlates positively with job promotions. Moreover, research has shown repeatedly that organizations whose senior managers set high goals have higher levels of annual profit and greater profit growth than those that do not.

So, what is new about the findings from this study? Before I tell you, let me tell you about a study that is in-press in the Journal of Organizational Behavior (JOB). Goal setting theory states, and the JOB study shows, that ability and resources moderate the goal-performance relationship. That is, lack of ability and lack of resources damages the relationship so much so that we found that to the extent supervisors perceive the goals they are assigned by senior management are excessively high and to the extent that they feel that they lack the resources to attain them, the supervisors become very angry and highly stressed. They then take out their frustration on their subordinates. In plain English, they abuse them.

So, once again, what is new in the findings from the Journal of Applied Psychology study? The answer is the importance of trust that lower and middle managers must have in the high-level manager who sets the goals. They must view the motives behind the senior manager’s challenging goals as in their division’s best interest to attain rather than as a way for their boss to exploit them. Trust enables lower level managers to focus on ways of attaining the goal without feeling the need to watch their backs. In short, the degree of trust in the person who sets the goal affects the goal-performance relationship.  Moreover, when people trust their boss, self-efficacy for goal attainment increases. Finally, when the lower-level managers trust their boss, they encourage their subordinates to support the goals that have been set.

In terms of dollars and cents, under conditions of high trust, a one-unit increase in the goal set by a senior manager led to $8.7 million in annual sales for the company. This contrasts sharply with the $5.2 million in sales resulting from challenging goals set by senior managers who did not enjoy the trust of their subordinates.

In summary, the message for us is:

  1. Setting specific high goals leads to high performance when subordinates trust their leaders.
  2. Proactive leaders who “invent their future” do far better in motivating people to pursue high goals than those who are relatively passive.
  3. Make sure that people perceive the goals that are set are attainable.