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Corporate goals that won’t negatively impact business

Can setting goals inadvertently lead to unethical behaviour in organisations? This is the question addressed by Ethical Systems in its latest 'one-sheet' publication on behavioural science. The one-page primer on the subject of setting goals in an organisational setting outlines how goals can make employees focused on achieving a certain objective – sometimes to the detriment of other considerations within the company.

The problem with goals

The problem with many goals is that, it send the message that the only thing that matters is achieving that target. Employees who have been set targets may feel under huge pressure, which can lead to unethical behaviour, from taking process short-cuts, to data manipulation such as presenting some facts while omitting others. This kind of behaviour could even be carried out unconsciously – because goals act as 'mental blinders' that stop employees from evaluating their behaviour properly. They are also more likely to justify any bad practices and also to take risks to achieve the goal.

Do goals create a toxic environment?

Ethical Systems maintains that how companies are organised can influence how employees behave. This is because most people's ability to make good, ethical business decisions is heavily influenced by the context or situation. The one-sheet states: “While goals encourage effort, persistence, and increased performance, they may also help create a toxic environment in which ethical behaviour is incongruent with success.”

The sheet gives an important example in which Wells Fargo has eliminated its product sales goals, following the bank's customer account falsification scandal. The purpose of this change of approach was to ensure that the bank's employees are focused on meeting the customers' needs, rather on the sales goals.

5 ways to set ethical goals in your company

Ethical Systems also provides the following pointers for organisations to use goals in a way that's constructive and positive for employees:

  1. Goals should guide behaviour rather than lay down deadlines for meeting targets. In any case, targets can – and should – be modified or change direction as events within a company develop.
  2. Employees shouldn't be punished through demotion or job loss for failing to meet targets. This could just incentivise them to take risks or behave unethically in order to meet the goals.
  3. The process of how objectives are achieved is as important as the actual achievement. Ethical Systems states: “Evaluation systems that monitor and incentivize leaders to create supportive work environments will encourage them to think beyond the numbers about how they are meeting their goals.”
  4. It also states that goals should encompass much more than just numerical targets and deadlines. Leaders should understand what really motivates employees and which aspects of their work really interests them: “Engage with your employees to better understand what motivates them personally – it’s not always about the financial reward.”
  5. Organisations should also seek to make work more enjoyable for employees, focusing on the purpose of tasks, or by offering opportunities for improvement or advancement.

This item appears in the following sections:
Sustainable Green Treasury
Sustainable Business Models

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