The Real Role of Goals: Incentives, Tracking, and Evaluation in Organizations

Goals contain three core functions—motivation, tracking, and evaluation—which explain why organizations invest time, effort, and money in them. The only valid standard for a goal is that it must be voluntarily set by the individual who pursues it and reflect personal values.

Historically, goal‑setting has been called MBO (Management by Objectives), SMART, KPI, BHAG, and most recently OKR, popularized by Intel and Silicon Valley firms. Companies spend billions annually on goal definition, tracking, and assessment, expecting substantial returns.

However, research shows that top‑down goals often do not motivate employees; they can even hinder performance. Examples include sales targets that cause top performers to delay deals and create artificial quotas, leading to reduced effectiveness and, in extreme cases, fraudulent behavior such as the creation of millions of fake accounts at Wells Fargo.

While sales goals can serve as forecasting tools for revenue, they rarely drive actual sales growth. Similarly, many firms require employees to record annual goals and track progress, yet the non‑linear nature of achieving goals means tracking data rarely reflects true progress.

Evaluating employees based on the number of goals completed is problematic because goal difficulty varies widely and cannot be standardized across individuals.

Ultimately, the article argues that goals are often misused as bureaucratic paperwork rather than forward‑looking guidance, and that meaningful improvement requires voluntary, value‑aligned goal setting rather than imposed targets.