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Richard Thaler Goal Setting Theory

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YOUR BRAIN ON GOALS
Happiness for most of us, for most of the times, isn’t a thing that just happens; it comes from planning and setting goals for things that are important to us. Goal setting is a powerful process that helps you choose where you want to take yourself in life. By knowing and setting your goals, you can decide where do you need to focus your attention and efforts.

Goal setting can be an incredible game we play with our minds. When we set a goal, according to the psychologists, we put out a part of ourselves into that future goal. This is called “endowment effect”, a phrase coined by Richard Thaler in 1980. It says when you own something, an object or a dream or a goal, you cling to it and don’t want to let go of it. You don’t …show more content…

Smith School of Business at the University of Maryland, College Park, is a pioneer in the Goal Setting Theory, which he first presented in his 1990 book, A Theory of Goal Setting and Task Performance. His theory was based on studies involving about 40,000 people from eight different countries over a period of 25 years. A thought-provoking conclusion he drew from all those studies was that in 90% of the cases, specific and challenging goals led to higher performance than easy goals, “do your best” goals, or no goals.
Goal setting theory is essentially a motivation theory. The main purpose of your setting goals is to increase your motivation levels. Locke defines goal as “the object or aim of an action.” Any goal has two main features – content and intensity. Content of a goal is the desired result, while intensity is the needed efforts.
There can be two systems of setting goals effectively – SMART method, and HARD method.
SMART Goals
For this, we take a cue from George T. Doran‘s 1981 paper in Management Review to identify how can we find out if our goals are worthwhile and purposeful. What he originally described has almost become a gold standard today, that goals should be: S.M.A.R.T. This became famous when Jack Welch inducted this model in GE in the early 1980s.
• S – Specific – target a specific area for improvement.
• M – Measurable – quantify or at least suggest an indicator of progress.
• A – Attainable – specify who will do

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