When companies set tough goals for their employees, it works well when the market is steady or when the company wants quick results. But in uncertain times, like during changes, this might not be the best approach.

New research from UC Riverside’s School of Business looked into how employees react to tough versus more reasonable work goals. It gives bosses helpful tips on how to manage their teams better.

So, what’s the better strategy? Well, it depends on the situation.

The right goals

“If you’re trying to get your employees to explore more options that they haven’t tried before, give them moderate performance goals,” the researchers explain. “If you want them to find a good solution fast, give them higher performance goals.”

When workers have tough goals, they often see many tasks as failures and focus on what has worked before. For example, a salesperson might try to boost sales to existing customers instead of finding new ones.

Tough goals are great for employers in stable markets where proven strategies work well. They also help in situations where time is crucial, like when a company needs to meet new market demands quickly.

For instance, when the COVID-19 pandemic started, Johnson & Johnson set a goal to develop a vaccine with 90% efficacy. This challenging goal made their research teams focus on the most promising options, leading to a quicker vaccine development. If the goal had been less ambitious, like 70% efficacy, they might have explored more paths, taking longer to develop the vaccine.

Challenging times

But during fast changes or market disruptions, tough goals can be a problem. Legacy news media companies like The New York Times or CNN faced this when social media and many websites emerged with the Internet. Challenging goals can make workers ignore new options and limit their search space.

Moderate goals, on the other hand, give workers more time and freedom for a “broader search.” This includes tasks like learning new software, starting social media promotions, attending conferences, or finding customers in overlooked groups. These efforts may not pay off immediately but allow workers to learn about various options and their potential benefits.

“If you give your employees moderate performance goals, they will keep exploring a lot more,” the researchers explain. “So, they’ll keep trying different things.”