Study with the several resources on Docsity
Earn points by helping other students or get them with a premium plan
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community for help and clear up your study doubts
Discover the best universities in your country according to Docsity users
Free resources
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
The effects of OKRs (Objectives and Key Results) on autonomous motivation in organizations through interviews with goal-attainers and goal-setters. The study compares traditional goal-setting methods with OKRs and discusses the benefits of self-set goals, such as increased self-efficacy and autonomy. The document also highlights the importance of understanding goal orientations and the role of goals in performance and learning.
Typology: Study notes
1 / 73
This page cannot be seen from the preview
Don't miss anything!
Aalto University
School of Science
Master’s Programme in Information Networks
Jesse Palo
Master’s Thesis
Espoo, July 1st, 2020
Supervisor: Professor of Practice Risto Sarvas, D.Sc. (Tech.)
Advisor: Timo Korander, MS.c. (Econ and Bus Admin.)
i
Aalto University School of Science ABSTRACT OF Master’s Programme in Information Networks MASTER’S THESIS
Author: Jesse Palo Title: Setting goals for autonomous motivation using the OKR method Date: July 1st, 2020 Pages: 67+ Major: Information Networks Code: SCI Supervisor: Professor of Practice Risto Sarvas, D. Sc. (Tech.) Advisor: Timo Korander, M.Sc. (Econ and Bus Admin.) Goal-setting has been a part of organizational management for decades as a way to increase organizational performance. Traditional ways of setting goals in organizations can’t keep up with the ever-quickening pace of development, while Objectives and Key Results (OKRs), a goal- setting framework, has been eyed by many as a way to set goals in a way that is compatible with the new ways of working. Meanwhile, employee well-being is a serious consideration and autonomous motivation has been linked with increased well-being. This thesis studies whether OKRs could be used to set goals to drive autonomous motivation and employee well-being while meeting modern management needs. The research is a qualitative, explorative case study into a transformative business unit in a large Finnish corporation in the middle of their own OKR experiment. The data was gathered through 11 semi-structured themed interviews with two distinct groups: goal-attainers participating in the OKR experiment and goal-setters, who are in charge of setting goals traditionally in the case organization. The results indicate a discrepancy between what goal-attainers and goal-setters use goals for. This leads to difficulties in communicating and internalizing traditional organizational goals. This is unfortunate, as the results also indicate that this means that organizations are missing out on autonomous motivation benefits that goals can indeed provide. The OKR experiment indicates that setting goals with OKRs provides increased opportunities for autonomous motivation to be generated than through traditional goal-setting methods. This is thanks to its bottom-up approach to goal-setting and aligning, faster goal cycles and feelings of progress and achievement through tracking. The research contributes towards the theoretical background of OKRs and bridges two theories in the managerial space: the Self-Determination Theory and Goal-Setting Theory. The practical implications of the research relate to using OKRs for employee autonomous motivation rather than performance and how even traditional goal-setting ways could improve the organization members’ autonomous motivation. Keywords: goals, goal-setting, motivation, autonomous motivation, self-determination theory, goal-setting theory, objectives and key results, OKR Language: English
iii
I am not known to be the humblest of persons, but I am humbled now as my thesis is complete and graduation nears.
For helping me with my thesis, I want to thank Risto Sarvas, Juho Paasonen, Timo Korander and the whole Posti organization. Thank you for steering me to this subject, which I found fascinating and thank you for your advice and supervision on the project. Additional thanks go to Otso, Riston Suojatit and others who were doing their theses simultaneously with me.
For helping me with my studies, I want to thank my professors and my peers for helping me get past those pesky math courses so I could find and focus on what truly interests me.
For helping me unwind, I want to thank my friends and my guild and its members. Latovartijat, Sokeriset, Väsyneet, Pojat, D, IV’14 and H’17 and more have helped me live a fulfilling life during my studies and beyond.
For helping me come this far and giving me the tools to go further, I want to thank my family: thank you Mom, Dad, and Sara. In you I have the support to do what I want to do and go where I want to go.
For the future, I want to acknowledge four people in particular. Thank you, Ville, for being the best of friends and growing together with me. Thank you, Kasper K, for being my friend and building my understanding of the world. Thank you, Mikko, for being my friend throughout the years and keeping me in touch with reality. Finally, thank you Cecilia for loving me, letting me love you back and being a part of everything above.
As the organizational world continues to pick up pace, new methods of optimizing performance and organizational effectiveness arise. Since Peter Drucker introduced his Management by Objectives (MBO) in 1954, organizations all around the world have been trying to increase performance and realize their strategies by setting goals, often on an annual cycle. Unfortunately, the traditional, once-a-year way of setting goals is not compatible with modern organizations that use short cycle, agile methodologies to achieve competitive advantage. To meet the pace and needs of modern organizations, the goal- setting method generated in the 1970s at Intel, Objectives and Key Results (OKRs), have been proposed as a solution. (Sull & Sull, 2018)
While setting goals has traditionally been a way for managers to increase performance, management theorists have long been saying that goals are also a way to affect organizational member motivation (Latham & Locke, 1979). In Goal-Setting Theory (GST) the premise of goals as a practice is that goals motivate through self-satisfaction with performance (Locke & Latham, 2012). However, Martela et al. (2019) state that not all goals are “created equal” in the eyes of human motivation, and that it is important to generate a specific type of motivation: autonomous motivation. In addition to not meeting the needs of modern organizations, it is important to ask whether traditional ways of setting goals meet the needs of their members or not.
Self-Determination Theory (SDT), a theory on human motivation traditionally divides motivation into two different types: intrinsic and extrinsic motivation. However, more recently the internalization of external regulation – the act of extrinsically motivating – has been recognized as a factor for intrinsic motivation. This combination of intrinsic motivation and internalized external regulation is called autonomous motivation (Deci, Olafsen & Ryan, 2017). Autonomous motivation leads to both well-being and enhanced performance (Deci & Ryan, 2008a). Martela et al., (2019) state that some goals increase well-being more effectively than others, namely those types of goals that increase
autonomous motivation. Goal-setting theorists agree that performance is at its highest when goal-attainers are highly motivated and committed to the task (Locke & Latham, 2012), and intrinsic motivation (a key part of autonomous motivation) is “nearly six times more effective than external incentives in motivating people to complete complex tasks that require creativity” (Sull & Sull, 2018).
Especially in knowledge worker organizations, it would then make sense to use a way to set goals and choose a goal-setting method that motivates members autonomously to increase (1) member well-being and (2) performance. What this thesis examines is how autonomous motivation works in the context of goals and especially how the old way of setting goals and the up-and-coming way of setting goals with the OKR method compare in affecting it.
OKRs as a method to set goals differs from traditional goal-setting in both the speed of its cycle, but also by its bottom-up nature. Traditionally the way of setting goals goes top- down (Sull & Sull, 2018), where people high in the organization set the goals and then impose them on lower members of the organization to be attained. This thesis will examine and compare these two different perspectives to goal-setting: the perspective of the goal- setter and the perspective of the goal-attainer.
The traditional way of setting SMART (specific, measurable, achievable, realistic, and time-bound) goals has been put into question in favour of FAST (frequently discussed, ambitious, specific, and transparent) goals in the recent years (Sull & Sull, 2018). OKRs present an opportunity for the people who set goals to be the same people who try to attain them. It will be interesting to see how the goals that individuals set for themselves differ from those that are set for – and sometimes imposed on – them and whether setting goals for themselves increases autonomous motivation or not. The difference between goals set for self and for organization is one of the motivating themes that this thesis is going to examine. Self-Determination theorists have done some studies on goals and their effect on autonomous motivation, but not in the context of organizational goals (selfdeterminationtheory.org, 2020). OKRs are also a method born out of practice, and
The structure of the thesis is divided into seven chapters. In Chapter 1 chapter, the motivation and an overview of the thesis’ purpose have been given.
Chapter 2 delves into the key concepts and the relevant theoretical background to understand and conduct the empirical study. The central theories, Goal-Setting Theory and self-determination theory are introduced. In addition, Objectives and Key Results as a method to set goals are introduced in greater detail.
Chapter 3 introduces the scope and the research questions of this thesis. The motivation and assumptions behind the research questions are explained.
Chapter 4 presents the methods, methodology, and the design of the empirical research. This chapter explains the chosen approach and the arguments for choosing it. This Chapter also fully introduces the case organization and the OKR experiment that lays the foundation for the empirical study.
Chapter 5 shows the results of the empirical study. The structure of this chapter reflects the research questions for easy digestion.
Chapter 6 answers the three research questions of the study. The chapter brings the theoretical background from Chapter 2 and the results of the study from Chapter 5 together.
Chapter 7 discusses the theoretical contribution and the practical implications of the study. This chapter is of interest to those who wish to understand what this thesis means for future studies and goal-setting practices in organizations. This chapter also goes through the limitations of the study and its findings, including its ethics.
This chapter explains the theoretical background of the thesis and lays the foundation for the research questions to be presented in Chapter 3.
First this chapter will introduce the two key theories that ponder the theoretical contexts of goal-setting and autonomous motivation: Goal-Setting Theory and Self-Determination Theory respectively.
Theory states that goals are a way for organizations to make their strategy become a reality (Sull & Sull, 2018). Goal-setting is the practice of setting goals that an organization has adopted. Goal-setting theory (GST) then is, as its name implies, a theoretical examination of the effectiveness of goals and how to set goals to gain optimal organizational performance. Throughout its evolution, the theory has been strengthened with empirical evidence and this thesis can rely on the theory for what kind of goals help organizations in their goal-setting practices.
GST explains that goals boost organizational performance because of four key mechanisms. Firstly, goals help steer effort and focus towards relevant activities. Secondly, goals have been shown to have an energizing effect – especially high difficulty goals. Thirdly, they have a positive effect on persistence. Goals help keep up work efforts. Fourth, goals have been proven to help in the discovery and use of new (task-relevant) knowledge and strategies. (Locke & Latham, 2002; 2012)
According to GST, what great goals have in common is that they are specific and difficult to attain. When the goal is specific, its success criteria are reachable with less variety, therefore bringing performance variance down and therefore while the specificity does not contribute towards higher performance, it ensures that everyone understands the target
The relationship between goals and enhanced performance is the strongest when commitment to the goals is strong. Commitment is strong when self-efficacy is high and the goals themselves are important to people, or in the words of motivation studies, when people have either internalized or have intrinsic motivation towards the goals (Locke & Latham, 2002; 2012). According to GST, ways to help people internalize the goals are inspiring visions and supportive behaviour from leaders, which is consistent with Self- Determination Theory’s (SDT) view of generating autonomous motivation (Deci & Ryan, 2008b).
As opposed to SDT, Locke & Latham (2002) write in favour of monetary incentives, although cautiously. In their view, monetary incentives can be used to increase commitment to goals – at least initially. If at some point a goal that has monetary incentives attached to it starts to seem unattainable, the motivation to work for that goal drops. Locke & Latham (2002) suggest the use of monetary incentives for goals that pays based on performance instead of only upon attaining the goal. However monetary incentives in combination with traditional, annual goal-setting methods has been linked to negative effects on companies being able to execute their strategy because of goals being set lower than they could because of fear of losing the incentive (Sull & Sull, 2018).
In order to set effective goals, it is important to be aware of different goal orientations, sometimes called achievement goal patterns (Lee et al., 2003; Harackiewicz & Elliot, 1993). These mean that different types of goals motivate different types of people. Locke & Latham (2002) divide goals and people into two categories: People that are motivated by performance goals (PGs) and people that are motivated by learning goals (LGs). Performance goal orientation is comparable to control orientation, while learning goal orientation is also called autonomy orientation (Lee et al., 2003). Lee et al (2003) also take note of a third goal pattern, the amotivated orientation, which does not respond well to goals at all. Pairing the goal type with the orientation leads to better results in motivation and interest (Locke & Latham, 2002; 2012).
Sometimes difficult goals do not always lead to the best performance, but instead can lead to goal-attainers only focusing on reaching that specific goal instead of trying to learn skills that could help them reach that goal, and in such cases it is important to set the goal with a learning orientation in mind instead of a performance goal (Locke & Latham, 2012).
People with learning orientation tend to focus on activities that develop their skills, while performance goal-oriented people tend to choose easy goals that help them look good. Highest performance is achieved when a learning orientation is paired with a learning goal in a complex task (Locke & Latham, 2012).
What GST teaches is that pairing a goal orientation with the goal type leads to a higher motivation, but also that the highest performance is reached in complex tasks that are paired with a learning goal and learning orientated goal-attainers. High performance through goals also requires high commitment to the goals, which is achieved through high self-efficacy (Locke & Latham, 2002). Goal-attainers who have been subconsciously primed to the goal also perform better on high-difficulty goals, especially when they are required to do their best, not necessarily reach a hard target (Locke & Latham, 2012). Subconscious priming means that a goal-attainer has accepted and understood the goal.
Therefore, goals that lead to high performance have the following traits (Locke & Latham, 2012):
As discussed in the thesis introduction (Chapter 1), increased performance has been the traditional desired outcome of goals for organizations. However, what this thesis seeks to
seem to lessen the recipient’s interest in the rewarded activity if they are dependent on or tied to achieving a standard or completing that specific activity. In this light, SDT argues that the two types of motivation are in fact not additive.
Therefore, to leverage autonomous motivation in order to perform better and have their employees act more creatively, organizations and companies should aim to have the employees internalize the value of the activities that the organization or company deems to be important.
SDT assumes that human beings are naturally motivated and eager to succeed, as success itself is satisfying and rewarding (Deci & Ryan, 2008a). Intrinsic motivation and psychological well-being are generated through the satisfaction of basic psychological needs: autonomy, competence and relatedness (Deci & Ryan, 2008b).
Feeling of autonomy
Autonomy is satisfied when the experiencer feels they have choices and freedom, when their decisions at work reflect what they actually want, when they are able to express themselves in their choices and when they are able to do what really interests them in their jobs. Autonomy is frustrated when the experiencer feels that they are forced or pressured to do something, when most of their work feels like it is just something they have to do or a chain of obligations. In other words, feelings of autonomy are hindered by controlling environments and extrinsically motivated activities that the value of is not internalized. (Chen et al., 2015; Schultz, Ryan, Niemiec, Legate, & William, 2014)
Feeling of competence
The need for competence is satisfied when the experiencer feels capable and confident in their jobs, their goals and when they feel that they can successfully complete difficult tasks. Things that frustrate competence are doubts or insecurities about one’s own abilities, being disappointed in one’s own performance or feeling like a failure because of a mistake. (Chen et al., 2015; Schultz, Ryan, Niemiec, Legate, & William, 2014)
Feeling of relatedness
Relatedness is satisfied when the experiencer feels cared for by people that they themselves care for, being connected and close to those people, and when experiencing a warm feeling with people they work with. Relatedness is frustrated when the experiencer feels excluded from their group, that their relationships are only superficial, or when they dislike them or are cold and distant. (Chen et al., 2015; Schultz, Ryan, Niemiec, Legate, & William,
In addition to the three basic psychological needs listed here that contribute towards intrinsic motivation, autonomous motivation includes internalized external regulation (Deci & Ryan, 2008a). How internalization works and affects autonomous motivation is examined next.
Self-determination theory divides motivation into intrinsic and extrinsic motivation. Extrinsic motivation can be transformed into intrinsic motivation through the process of internalization (Deci et al., 1994). The internalization process divides extrinsic motivation into four different types: external regulation and three different levels of internalized external regulation, where regulation is the action of motivating (Deci & Ryan, 2008a).
The three different levels of internalized external regulation are: interjected, identified and integrated external regulation. When external regulation is integrated, the effects of the regulation transform into motivation and are as beneficial for performance as if the subject of motivation was intrinsically motivated, making integration the strongest level of internalization (Deci et al., 1994; Deci & Ryan, 2008a). The second strongest level of internalization of external regulation is integration, where the individual accepts responsibility for whatever the extrinsically regulated activity may be and therefore does
Setting goals for autonomous motivation begins with the content of the goals (Vansteenkiste et al., 2006).
Studies around setting goals for autonomous motivation emphasize the framing of the goals to be intrinsic and autonomy supportive. This means that instead of using words like “should”, the goals are set using words such as “could” and make room for autonomy. Previously intrinsic goals have been linked to better mental health and well-being, but there is also evidence that intrinsic goals are related to achievement and persistence (Vansteenkiste et al., 2006). It has to be said that extrinsic goals also provide some benefits for performance over no goals at all, but substantially less than intrinsic goals.
Extrinsic rewards have been proven to be effective at controlling behaviour. However, controlling behaviour results in a loss of intrinsic motivation for the subjects of the control (Deci & Ryan, 1999; Vansteenkiste et al., 2006). In other words, while providing extrinsic rewards for key activities might help an organization to align its employees’ activities to its own strategy, the employees are less motivated to do so because of a loss in intrinsic motivation and therefore autonomous motivation. Indeed, it seems that setting and reaching goals is a source of well-being, but not all goals contribute equally towards good, motivated people (Martela et al., 2019). Overall it is important that any goals are set in a way that supports autonomy (Deci & Ryan, 2008a).
Intrinsic goals satisfy the psychological needs of relatedness, competence and autonomy as presented in SDT (Martela et al., 2019). Satisfying these needs promotes autonomous motivation, high performance and wellness (Deci, Olafsen & Ryan, 2017).
Facilitation of internalization of external regulation is providing a reason for why a certain uninteresting or extrinsically motivated activity is important (Deci & Ryan, 2008a). In other words, it is important to make sure that whenever a goal is set, the question “Why is this important?” is asked and answered. When given a purpose and rationale, a performance goal has the strongest positive effect on intrinsic motivation (Locke &
Latham, 2002). This is consistent with the generation of autonomous motivation and especially the internalization of external regulation of SDT. Interestingly though, when the purpose and rationale are removed, learning goals become more effective for the sake of intrinsic motivation. Learning goals seem to affect directly towards intrinsic motivation, whereas performance goals that have a rationale or purpose contribute towards intrinsic motivation through the process of internalization.
Beneficial for setting goals is understanding aspirations that contribute towards intrinsic goals and motivation through fulfilling basic psychological needs. For example, those aspiring to mastery have feelings of competence as well as autonomy, both being sources of intrinsic motivation (Martela et al., 2019). Other proven intrinsic goals provided that can be of interest to goal-setting are: self-expression, contribution and affiliation and self- development (Deci, Olafsen & Ryan, 2017; Martela et al., 2019). These aspirations drive self-determination and therefore could be of interest to examine in organizational goal- setting context.
Goal-setting theory states that great goals are specific, difficult to attain, and have a purpose and a rationale. Motivation studies argue that great goals either contribute directly to intrinsic aspirations and motivation or aim for internalization of external regulation to the point of identification, hopefully even integration. Both theories acknowledge that individuals respond to different types of goals, be it because of personal goal-orientation or intrinsic aspirations that are unique to everyone. This introduces a whole new dimension of difficulty to setting goals for autonomous motivation.
As we can see, setting goals for autonomous motivation is not as far in the literature as setting goals for performance, and the guidelines are not as straightforward. However, better motivation leads to better performance (Locke & Latham, 2002; Deci & Ryan, 2008a; Deci, Olafsen & Ryan, 2017), giving reason to think that setting goals for performance can also partly mean setting goals for autonomous motivation.
