Blame It On The Boogie

The dangers of blaming underperformance on the crisis

Yes, but who ruined my year?

"Effective quota setting is a frustrating topic for organisations in all industries in the current economic environment" wrote Michael Herman Principal at Deloitte (a consulting firm) back in 2009. Hitting the challenging-achievable sweetspot while setting objectives is indeed difficult in turbulent times.

Yet year on year, targets remain on the rise. Despite this being the worst crisis since 1930, 42% of companies expect to raise the performance bar next year according to a recent survey by PMP. "This continues a three-year trend that saw 49% of participants set higher targets in 2011, and 41% raise standards in 2010.” It is worth noting the trend applies to companies that did well in 2011 as well as to those that didn't.

This may partly be driven by a desire to rally executives and associates against challenging goals. Locke and Latham claimed in their Theory of Goal Setting and Task Performance that when it comes to setting goals for performance the harder a goal, the more it motivates. As Marc Effron explains in One Page Talent Management, "there is a linear relationship between a goal’s difficulty and the amount of effort and performance the goal produces. That relationship is true no matter how challenging the goal is.”

Something in the job

So what happens when at the end of a tough year objectives aren't met? You might have noticed, there is an irresistible temptation to blame the environment for at least part of our ills. A very quick web search delivers the Director General of the Association of British Insurers attributing the UK insurers' "poor reputation" (valued as their biggest weakness in a recent survey) to the banking crisis; or UK banks equally blaming weak lending figures on the confidence crisis.

Similarly, when confronted with a sales force where no individual has achieved target, an arguably sensible logic could work as follows: targets were set properly given the information available in January; circumstances changed dramatically throughout the year; it was impossible for anyone to hit target.

But resting all or part of the blame on external factors can have unwanted effects. In a series of experiments, McCrea (2008) argued that placing all or part of the blame on external factors made people feel better about themselves but saw a reduction in motivation in preparing properly for the future. Similar mechanisms have been widely explored in psychology, both in attribution and in locus of control theories (both related concepts). On a similar tone, a tendency for downwards counterfactual thinking (i.e. thinking "it could have been worse") has been associated in recent research by Fuschia Sirois with procrastination.

Setting, holding and evaluating target achievement through turbulent times is not without its challenges. But companies and managers should step up to the mark. Putting all or part of the blame on the crisis has the potential to set us up for future disappointments.

Perhaps we should temper the testosterone of our new year resolutions, be quicker in fine-tuning targets through the year and leave little room but to take ownership of the outcomes. In other words, do as we say we do in good years.