Journal of Applied Psychology

1978, Vol. 63, No. 1, 29-39

Motivation, Behavior, and Performance: A Closer Examination

of Goal Setting and Monetary Incentives
James R. Terborg and Howard E. Miller
University of Illinois at Urbana-Champaign

Some experimenters often test predictions from theories of motivation using

performance outcomes as dependent variables. We argue that observable be-
haviors that are likely to be affected by motivation manipulations should be
used in combination with performance outcomes. Such procedures would be
sensitive to differential effects of manipulations on various behaviors and would
allow for investigation of relationships among behaviors and performance out-
comes. For this experiment, 60 males were hired to work individually on a
2-hour construction task. Subjects were assigned to one of two pay conditions
(piece-rate vs. hourly) and one of three goal-setting conditions (no goal, quan-
tity, or quality) resulting in a 2 X 3 crossed analysis of variance design. De-
pendent variables included three measures of effort, three measures of direction
of behavior, and both quantity and quality performance. Method of payment
affected quantity performance and effort. Goal setting affected quantity and
quality performance and direction of behavior. Implications for designing and
testing work motivation systems are discussed.

Motivation cannot be measured directly,
but is inferred from the arousal, amplitude,
persistence, and direction of behavior (Birch
& Veroff, 1966; Campbell, Dunnette, Lawler,
& Weick, 1970; Campbell & Pritchard, 1976).
Examination of past research on employee
motivation, however, shows a reliance on per-
formance outcomes as surrogate measures of
motivation.
There are several problems with the use of
performance outcomes as substitutes for be-
havioral indices of motivation. First, per-
formance is multidimensional and the mea-
surement of one or two outcomes may incom-
pletely document any relationships that may
exist. Second, performance is affected by such
variables as ability and opportunity in addi-
tion motivation (Campbell & Pritchard, 1976;
This study was supported by a grant from the Uni-
versity of Illinois Research Board.
The authors are grateful to their supervisors (Dan
Koys, Byron Matten, and Bill McFadden) and their
film raters (Pam Law and Becky White) for the long
hours they spent working on this project.
Requests for -reprints should be sent to James R.
Terborg, Department of Psychology, University of
Illinois, Champaign, Illinois 61820.
Copyright 1978 by the American Psychological Association, Inc. All rights of reproduction in any form reserved.
Terborg, 1977). Although these other vari-
ables could be controlled experimentally or
statistically, confounds may still exist. For ex-
ample, a batter may be able to hit the ball
hard with every attempt, but the velocity of
the ball may be weakly related to an evalu-
ated outcome such as a home run or a double
play (McGrath, 1976). Similarly, amplitude
of behavior may be weakly related to some
measured performance outcome even when
ability is controlled. A third problem deals
with the complex relationships among specific
behaviors emitted in response to some inde-
pendent variable and the links between these
behaviors and various performance outcomes.
Hackman (1976) and Hackman and Morris
(1975) state that tasks vary on the degree to
which changes in a behavior can bring about
changes in performance. Effort may be im-
portant on some tasks and direction may be
important on others, depending on critical
task contingencies. Locke (1975) made a
similar point.
The choice, then, of dependent variables in
motivation research is especially important.
The complexity of this choice is diagrammed
with an example in Figure 1. The example

29
30 JAMES R. TERBORG AND HOWARD E. MILLER

DOMAIN OF PERFORMANCE RELEVANT

DEPENDENT VARIABLES : OUTCOMES:
SELECTED BEHAVIORS SELECTED OUTCOMES

QUANTITY

EFFORT
MANIPULATION OF
QUALITY
THEORY SPECIFIC
INDEPENDENT QUANTITY
VARIABLES
1
DIRECTION
QUALITY

INDIVIDUAL CRITICAL
RESPONSE TASK
CAPACITY CONTINGENCIES

Figure 1. Hypothetical example of relationships among independent variables, motivation de-

pendent variables, and performance outcomes (Heavy lines indicate causal links).

describes a hypothetical set of relationships dependent variables and performance out-

among motivation independent variables, vol-
untary behaviors that are used to infer mo-
tivation, and performance outcomes, which
may result from those behaviors. First, the
independent variable(s) specific to a theory
must be manipulated or measured. Second,
not every independent variable influences
every dependent variable with equal effect.
Third, appropriate performance outcomes
must be selected and measured. Fourth, de-
pending on existing critical task contingencies,
each motivation dependent variable will not
have equal effect on each performance out-
come.
Turning to Figure 1, had a researcher
chosen to measure only effort and quantity, a
conclusion of no support would be reached.
Although effort could be correlated with
quantity, neither would be affected through
manipulation of the independent variable. A
main effect might be found if quality had
been measured, but there would be little co-
variation between effort and quality. Put an-
other way, empirical support for a valid the-
ory depends in part on (a) the strength of
the manipulation, (b) the response capacities
of individuals in some setting, (c) links be-
tween independent variables and various mo-
tivation dependent variables, (d) choice of
motivation dependent variables to measure,
(e) errors associated with various assessment
techniques, (f) critical task contingencies, (g)
choice of performance-relevant outcomes, (h)
errors associated with the assessment of these
outcomes, and (i) interrelationships among
comes regardless of choice and manipulation
of independent variables.
The research described below was designed
with these issues in mind. The intent was to
examine behavioral and performance conse-
quences associated with two widely used mo-
tivational theories/techniques: goal setting
and the use of money as a performance-con-
tingent reward.
Goal Setting
Whether goal setting is a motivation theory
or technique (Locke, 1975), the performance
results are clear. The implementation of dif-
ficult and specific goals leads to performance
increments (Latham & Yukl, 1975; Locke,
1975; Steers & Porter, 1974). These review-
ers also state that future research is needed
that specifies how task goals become trans-
lated into effective performance. Both Locke
(1975) and Latham and Yukl (1975) suggest
that we have just begun to understand why
goal setting affects employee motivation and
performance.
One approach to this question has con-
sidered the motivational components of goal-
directed behavior. Goal difficulty is thought
to affect effort, since the more difficult the
goal, the greater effort the individual must ex-
pend to attain the goal (Locke, 1968). Al-
though relatively few studies have included
separate measures of effort, the results are
generally supportive (cf. Carroll & Tosi,
1970; Steers, 1975; Terborg, 1976). Goal
 MOTIVATION, BEHAVIOR, AND PERFORMANCE
specificity might affect direction of behav-
ior. The management-by-objective literature
points to the clarification of role requirements
as one means for improving performance
(Latham & Yukl, 197S; Locke, 1975). Sup-
port, for this position is less well established
because, as with effort, direction of behavior
rarely has been assessed. The exceptions have
been laboratory studies or simulations which
did find support (Locke, Bryan, & Kendall,
1968; Terborg, 1976).
Money as a Contingent Reward
Even though theoretical controversy exists
as to the specific role of money in work mo-
tivation (cf. Hamner, 1974; Lawler, 1971;
Opsahl & Dunnette, 1966), a common theme
persists; motivation and performance should
be greater when pay is contingent upon per-
formance as opposed to when pay is not con-
tingent on performance.
Much of recent research on pay has at-
tempted to specify the relevant personality
and situational variables that influence the ef-
fectiveness of various incentive programs. It
is not our purpose to explore these issues.
Rather, a more basic question is put forth.
Given a multidimensional conceptualization of
motivated behavior, what are some likely be-
havioral outcomes associated with contingent
reward pay systems? It is not entirely clear
that such systems always increase effort or
performance (cf. Jorgenson, Dunnette, &
Pritchard, 1973; Opsahl & Dunnette, 1966;
Pritchard, DeLeo, & Von Bergen, 1976). Fail-
ure to obtain support often results in attribu-
tions to measurement error, especially with
effort.
We can also speculate that performance-
contingent reward systems influence direction
of behavior. Such rewards change the out-
comes associated with different levels of per-
formance. Search behavior designed to dis-
cover a satisfactory performance strategy may
result. But if search behavior entails addi-
tional costs, other strategies may be evoked
from the beginning that preclude search be-
havior. Contingencies associated with the task
may cue the use of a performance strategy
that previously has been found satisfactory.
31
It is unfortunate, however, that even though
performance strategies have been mentioned
as determiners of performance, the impact of
reward systems on these behaviors has re-
ceived little attention. This omission is espe-
cially relevant in those instances in which
method of payment was found to affect per-
formance, but not effort (Jorgenson et al.,
1973). Terborg (1976), iw an exception,
found no difference in direction of behavior
due to contingent versus noncontingent pay-
ment. Only one measure of behavior was used,
however, and search behavior was not as-
sessed.
Research Objectives
Acceptance of performance goals that are
both specific and difficult and knowledge of
performance-pay contingencies provide cues
that help the worker define the task. It was
argued, however, that these cues may have
differential effects on separate dimensions of
motivated behavior. Past research on goal set-
ting and pay systems generally has not con-
sidered these issues in detail. For example, a
specific and difficult goal for quality perform1
ance may elicit different behaviors than a simi-
lar goal for quantity performance. Also, qual-
ity performance goals in combination with a
pay system that rewards quantity perform-
ance may represent conflicting cues if quality
and quantity are negatively related.
In an attempt to clarify some of these ques-
tions, we emphasized the operationalization
and measurement of motivation. Effort was
operationalized in two ways and assessed from
three sources. Direction of behavior was op-
erationalized in three ways. Finally, both
quality and quantity performance measures
were obtained.
Such a design would allow for a more de-
tailed examination of past results, which sug-
gest that goals should affect effort, direction
of behavior, and performance and that per-
formance-pay contingencies should affect ef-
fort and performance. Pay system predictions
were not made for direction of behavior, since
little theoretical or empirical work presently
exists on this question.
32 JAMES R. TERBORG AND HOWARD E. MILLER
Method
Subjects
Subjects were recruited via posters and advertise-
ments in a campus newspaper listing a 2-hour re-
search project on the analysis of job behavior. The
task was described as light assembly work, with pay
being approximately $2.50 per hour depending on
what work was done. The nature of the task was
described along with the fact that behavior would be
filmed. The first 60 respondents were scheduled for
individual 2-hour sessions and were randomly as-
signed to conditions. Subjects ranged in age from 17
to 23 years (M = 19.8 years), and almost all were
college students.
Task
One goal of the present study was to focus atten-
tion on the measurement of effort and direction of
behavior. To this end, time-lapse photography was
used to record individual behavior on film. This
would allow for the rating of relevant behaviors by
independent observers who were blind to conditions.
A task was developed using Tinker Toys that re-
quired the assembly of a complex model with several
moving parts. This task was chosen since it was de-
termined that (a) the task was interesting, (b) qual-
ity and quantity of performance could vary and be
measured, (c) behavior at the task could be filmed
for meaningful analysis, and (d) different methods
or strategies for assembly were possible and in fact
employed.
We introduced subjects to the task by stating our
desire to obtain a photographic record of their be-
havior. The project was explained as an attempt to
determine if time-lapse photography could aid in the
analysis of manual jobs. No attempt was made to
conceal the camera. Rather, subject attention was
focused on the importance of filming the work. The
camera was placed in front of a work bench ap-
proximately 15 ft. (4.6 m) away. The presence of
the camera was reported not to have a negative ef-
effect.
Subjects stood at a work bench with parts bins
and an example model. There was an oversupply of
parts. The model was explained, and subjects were
given an opportunity to examine it. They worked at
the task for 1 hour. A clock was set to 12:00 at the
start of the work period. Subjects were instructed to
place assembled models on a shelf that was out of
camera range but within their view. Thus, subjects
were able to keep track of the time remaining and
the number of models completed. A rest area with
magazines, coffee, and soft drinks was provided. No
subjects took breaks, but several did take drinks to
the work bench for consumption during the task.
Conditions and Procedure
The 60 subjects were divided among four advanced
undergraduate male research assistants who were in-
troduced as project supervisors. Each supervisor had
an equal number of subjects in each condition and
was responsible for conducting individual sessions.
Half of the subjects were paid on a piece-rate sys-
tem (40^ per model during 1 hour of assembly and
$2.50 per hour for pre- and postassembly interviews),
and half were paid by the hour ($2.50 per hour for
all work). The value of the piece-rate manipulation
was determined in pilot work such that if an indi-
vidual worked at an average pace, he could expect to
earn about $2.50 for the hour. This was explained
to subjects in the piece-rate condition. It also was
stated that any partially finished models at the end
of the hour would be prorated on the basis of 10^
for each quarter of a model built. Criteria for par-
tially built models were explained.
Subjects also were assigned to one of the three
goal conditions: quantity, quality, or no assigned
goal. In the quantity goal condition, subjects were
given the specific production goal of building at least
nine models during the hour. Pilot data indicated this
to be a difficult but attainable goal. In the quality
goal condition, subjects were given the specific qual-
ity goal of at least 10 out of 12 possible quality
points. Quality was assessed on six dimensions '(base
flatness, structure squareness, moving part function,
crank assemblage, joint assemblage, and fan blade
angle) with 0, 1, or 2 points being assigned 'as
quality improved. Examples of quality levels were
shown; a card with descriptions and point values
was placed on the work bench. Pilot work again
indicated this to be a difficult, but attainable goal.
In the no-goal condition, no mention was made con-
cerning quantity or quality with the exception that a
model had to stand and the crank had to work to be
counted as complete. The result was a 2 X 3 crossed
design with 10 subjects per cell. Experimental condi-
tions were counterbalanced over time so that parts
fatigue would be spread across conditions.
Subjects reported individually to the research
project room. The supervisor explained that the
camera was set to expose one frame every 5 sec,
which resulted in 720 observations per hour. Earlier
work indicated this would be satisfactory for film
ratings. Subjects completed a background question-
naire and were tested on ability. They were then
shown the model; method of payment and assigned
goals were described next. While the camera was
being set, subjects were given time to familiarize
themselves with the model and the various parts.
The supervisor remained in the room but away from
the work bench while subjects worked. At the end
of the hour, various method checks were obtained in
an interview and subjects were paid and partially de-
briefed. Full debriefings were made available at the
end of the project.
Assessment of Variables
Performance. Quantity was measured by counting
the number of completed and partially completed
models. This variable had a range from 4.00 to 11.00,
a mean of 7.61, and a standard deviation of 1.67.
 MOTIVATION, BEHAVIOR, AND PERFORMANCE
Quality was measured by supervisor ratings of com-
pleted models. The reliability of supervisor quality
ratings was r .81. This was computed from ratings
of 11 practice models. Average quality points per
completed model was used as the measure of quality.
These scores had a range from 3.5 to 11.5, a mean of
7.36, and a standard deviation of 1.93.
Effort. Measures of effort were obtained from
self-ratings, supervisor ratings, and analyses of the
films. The first two were made on an 11-point scale,
with high scores indicating greater effort. Supervisors
were instructed to observe the subjects unobtrusively
and to rate them on how hard they worked during
the hour. This measure had a range from 3 to 11, a
mean of 7.45, and a standard deviation of 2.10. There
were no mean differences across supervisors. Self-re-
port measures were collected in a postwork inter-
view. This measure had a range from 6 to 11, a
mean of 8.32, and a standard deviation of 1.38.
Rating of the films involved the use of a modified
paired comparison procedure similar to that discussed
by McCormick and Bachus (1952). First, within
each cell, the 10 subjects were rank ordered on the
basis of both quality and quantity performance, with
the top position indicating the best performance in
that cell. Paired comparisons were made across the
six cells, using subjects with similar rank orders. This
procedure would minimize error due to within-cell
variance that would have occurred if random assign-
ment had been used for the pairings. Ratings were
made by two trained observers who worked inde-
pendently and were blind to conditions. The pro-
cedure consisted of running two movie projectors at
identical speeds. The subjects' film images were pro-
jected side by side so that simultaneous observation
of the paired subjects was possible for rating speed
of motions. Ratings were made after every 15 min of
time worked so that four assessments were made for
each pair of subjects. To illustrate, if one subject was
rated as exerting more effort than his comparison at
each quarter hour, he received a score of 4 and the
other received a score of 0. The possible range of
scores was from 0 to 20, since each subject was in-
volved in five comparisons. Rater reliability was com-
puted to be r ~ .80 corrected for the two raters.
Scores were standardized within .raters and combined
to yield one score, which ranged from 2.92 to 3.93.
Effort then was operationalized in two ways: how
hard the subject worked and how fast the subject
moved. Assessments were obtained with multiple
methods: structured observation of films and verbal
reports. In this way, construct validity was enhanced
by minimizing problems associated with monoopera-
tion bias and monomethod bias (Cook & Campbell,
1976).
Direction of behavior. Three operationalizations
of direction of behavior were taken from the films.
Quality behavior was defined as the number of
frames of film the subject was observed to check on
the quality of his work, for example, operation of
the crank, straightening the base, and tightening
joints on a completed model. The two raters worked
independently and had a reliability of r = .82 cor-
33
rected for the number of raters. Scores were stan-
dardized within raters and combined to yield one
score, which ranged from 2.25 to 6.71.
Two other operationalizations of this variable were
assessed for exploratory purposes. Number of models
built at the start was determined from analysis of
the films. This objective measure had a range from
1 to 9, a mean of 2.38, and a standard deviation of
2.01. Number of different strategies used during the
hour made up the second exploratory measure. For
example, a subject used two strategies if he built
three models at a time and then switched to one
model at a time for the rest of the period. This
measure had a range from 1 to 3, a mean of 1.72,
and a standard deviation of .74.
Results
Method Checks
Ability. The time required for subjects to
complete a one-hand and two-hand manipula-
tion of the Minnesota Rate of Manipulation
Test (see Guion, 1965, for a description),
plus a small Tinker Toy model was used to
index ability. The coefficient alpha on stan-
dardized scores was computed to be r= .81.
Ability scores ranged from 4.52 to 7.31,
with low scores indicating superior ability.
There were no significant ability differences
across cells.
Pay manipulation. Following the manipu-
lation of pay but prior to working at the task,
subjects responded to interview questions ask-
ing for instrumentalities between quantity
and quality performance and pay. The ex-
pected pay effect was observed, with subjects
in the piece-rate condition reporting signifi-
cantly higher quantity-pay instrumentalities
and lower quality-pay instrumentalities than
subjects in the hourly condition. There were
no interactions or goal condition effects.
Goal manipulations. All subjects who were
assigned goals agreed to them and restated
them to the supervisor. Goal acceptance also
was determined in a posttask interview, with
over 97% of the subjects who were assigned
a goal reporting a goal.
Another concern was the effect of the pay
manipulation on the frequency of self-set
goals. Locke (1968) and Terborg (1976) have
suggested that when pay is contingent on
performance, people may be more likely to
choose goals on their own. Chi-square analy-
sis indicated no significant pay effect for fre-
34 JAMES R. TERBORG AND HOWARD E. MILLER
quency of either type of self-set goal. Thus,
subsequent analyses with pay would not be
confounded with frequency of self-set goals.
A final check was made using self-report
measures of goal level (i.e., intended perform-
ance) and goal difficulty for all subjects who
reported having a goal (i.e., self-set or as-
signed). If method of payment affected these
variables, then main effects for payment on
motivation and performance would be con-
founded with goal level and goal difficulty.
Similarly, it is important to examine for in-
tended goal manipulation effects.
For the 51 subjects who had a quality goal
(assigned plus self-set), there was a signifi-
cant effect for goal condition on level of set
goal and on difficulty. Subjects in the as-
signed quality goal condition had a signifi-
cantly higher goal level than did subjects in
the other two conditions. For quality goal dif-
ficulty, subjects in the no-goal condition rated
their goal less difficult than did subjects in
the other two conditions. There were no sig-
nificant interactions or method-of-payment ef-
fects.
Examination of quantity goal level and goal
difficulty produced essentially similar results.
For the 49 subjects who reported having a
quantity goal (assigned plus self-set), there
was no effect on goal level due to the manip-
ulations, but there was a significant effect on
Table 1
Correlation Matrix of Dependent Variables
Variable 1
Performance
1. Quantity
2. Quality -11
Effort
3. Supervisor 64** -03
4. Self 49** -02
5. Film 13 01
Direction
6. Quality behavior -35** 19
7. Number built at start 34** -08
8. Number different
strategies 21 20
9. Ability" -50* -36**
Note. N = 60. Decimals have been omitted.
" Low scores reflect superior ability.
* p < .05, two-tailed test.
** p < .01, two-tailed test.
goal difficulty. Subjects in the no-goal condi-
tion reported their goals as less difficult than
did subjects in the other two conditions.
There were no significant interactions or
method-of-payment effects.
In summary, the goal manipulations ap-
peared to be successful. The only effects were
due to goal manipulations, with the means
for goal level and goal difficulty being in the
expected directions. Although there was evi-
dence of self-set goals, these were set at
lower levels, were rated as less difficult than
when specific goals were assigned, and were
not affected by method of payment.
Relationships Among Dependent Variables
The intercorrelations among the variables
are presented in Table 1. Quantity perform-
ance was significantly related to supervisor
and self-ratings of effort, quality behavior and
number of models built at the start, and abil-
ity (p < .01 for all). Quality performance
was significantly correlated only with ability
(/X.01).
Additional correlations not reported in
Table 1 were computed using goal level and
goal difficulty. For the 51 subjects who re-
ported having a quality goal, ratings of level
and difficulty were positively correlated (r =
.38, p < .01). Quality goal level was nega-
50**
53** 32*
05 -01 24
18 08 04 -32**
08 06 00 -12 34**
-39** -21 -15 08 -21 -31*
 MOTIVATION, BEHAVIOR, AND PERFORMANCE
Table 2
Effects of Method of Payment and Goal Setting on Performance
Method of payment
Dependent
variable Hourly Piece rate
(performance
measure) M SD M SD p 2
Quantity 7.2 1.8 8.0 1.4 .04
Quality 7.6 1.9 7.1 2.0 .29
lively correlated with both quantity perform-
ance (r = .35, p < .05) and number of
models built at the start (r - -.29, p < .05),
and was positively correlated with both qual-
ity performance (r = .34, p < .05) and qual-
ity behavior (r = .28, p < .05). No other cor-
relations were significant.
For the 49 subjects who reported having
a quantity goal, ratings of level and difficulty
were positively correlated (r = .47, p < .01).
Quantity goal level also was correlated with
supervisor ratings of effort (r .28, p < .05)
and quantity performance (r = .40, p < .01).
No other correlations were significant.
These correlations provide some support
for the notion that goal level covaries with
task performance. There also was evidence of
relationships among goal level and goal dif-
ficulty with measures of effort and direction
of behavior. The results, however, were weak.
Performance
Quantity and quality performance data
were analyzed separately using a 2 X 3
crossed analysis of variance (ANOVA) with
10 subjects per cell. The results are sum-
marized in Table 2. Quantity performance was
significantly greater in the piece-rate condi-
tion than in the hourly condition, F(l, 54) =
4.50, p < .04, to2 = .05. Quantity also was in-
fluenced by assigned goals, F(2, 54) =3.07,
p < .05, io2 = .06. Fisher's least significant
difference test indicated that this effect was
due to the performance difference between
the quantity goal condition and the quality
goal condition, with significantly more models
being produced when quantity goals were as-
signed. There was no evidence of an interac-
tion.
35
Independent variable
Goal setting
No goal Quality Quantity
o> M SD M SD M SD p u2
.05 7.7 1.8 7.0 1.4 8.2 1.6 .05 .06
.00 7.0 2.1 8.4 2.1 6.7 1.2 .01 .04
Quality performance was influenced by goal
manipulations, F(2, 54) = 4.66, p < .01, o>2 =
.04, but was not influenced by method of
payment. Fisher's least significant difference
test indicated that quality was significantly
greater when quality goals were assigned than
in the other two conditions. There was no dif-
ference in quality performance between the
no-goal or the quantity goal conditions. Again,
there was no evidence of an interaction.
Effort
The three operationalizations of effort were
analyzed using a multivariate analysis of vari-
ance (MANOVA). This technique was used
because identical predictions would be made
for each measure of effort and, as expected,
they were intercorrelated with each other (see
Table 1). Evidence of a significant multivari-
ate effect would suggest the secondary use of
ANOVA (Spector, 1977).
The results of the 2 X 3 MANOVA are
presented in Table 3. There was a significant
method of payment effect on the set of effort
measures, multivariate F(3, 52) =3.72, p <
.02. Table 3 shows that for each measure, ef-
fort was greater when pay was contingent
on performance. Univariate Fs indicated that
conditions differed significantly on self-rat-
ings, F(l, 54) = 9.91, p < .003, >2 = .13, and
on supervisor ratings, F(l, 54) = 6.22, p <
,02, <o- = .08, but not on film ratings. There
was no evidence of a goal-setting effect or an
interaction.
Direction of Behavior
Number of models built at the start and
number of strategies were analyzed with a
36 JAMES R. TERBORG AND HOWARD E. MILLER

Table 3
Effects of Method of Payment and Goal Setting on Effort

Independent variable
Method of payment Goal setting
Dependent
variable Hourly Piece rate No goal Quality Quantity
(effort
measure) M SD M SD p w 2
M SD M SD M SD P u2

Self-ratings" 7.8 1.4 8.8 1.2 .003 .13 8.2 1.4 8.0 1.4 8.8 1.3 .16 .00
Supervisor
ratings 6.8 2.3 8.1 1.8 .02 .08 7.0 2.1 7.4 1.9 8.0 2.3 .26 .00
Film ratings -.4 2.0 .4 1.7 .13 .00 -.1 1.5 .3 1.8 -.2 2.1 .72 .00

" Multivariate results: pay, F(3, 52) = 3.12, p < .02; goal setting, F(6, 104) = 1.42, p < .22; interaction,
F(6, 104) = .71, p < .65.

MANOVA. The third index, quality behavior, Discussion

was analyzed with an ANOVA. This was done
because a specific directional prediction could
be made for quality behavior based on the
goal manipulations, whereas the other two
variables were included for exploratory pur-
poses. The results of all analyses are pre-
sented in Table 4. Goal setting significantly
influenced quality behavior, F(2, 54) = 3.85,
p < .03, <o2 = .09. Fisher's least significant
difference test indicated greater attention to
quality in the quality goal condition than in
either of the other two conditions. There was
no evidence of a method-of-payment effect or
an interaction. The MANOVA results for
number of models built at the start and num-
ber of strategies failed to reveal any signifi-
cant effects.
The results demonstrated once again that
performance can be predicted from manipula-
tion of performance-pay contingencies and
performance goals. More important, it was
shown that these motivation interventions
had differential effects on effort and direction
of behavior. Terborg (1976) reported similar
findings on a cognitive task with different op-
erationalizations of the same constructs.
Method of payment and goal setting inde-
pendently affected motivation and perform-
ance. The absence of any interactions repli-
cated other work (London & Oldham, 1976;
Terborg, 1976) and supported the position
that goal-setting procedures should not re-
place financial incentives as a means for im-

Table 4
Effects of Method of Payment and Goal Setting on Direction of Behavior

Independent variable
Dependent Method of payment Goal setting
variable
(direction of Hourly Piece rate No goal Quality Quantity
behavior
2
measure) M SD M SD p w M SD M SD M SD P u2

Quality behavior .1 1.9 -.1 1.8 .53 .00 -.5 1.6 .9 2.2 -.3 1.3 .03 .09
Number built
at start" 2.0 1.5 2.7 2.4 .19 .00 2.7 2.2 2.0 1.7 2.6 2.2 .51 .00
Number of
strategies" 1.8 .8 1.6 .7 .40 .00 .1.6 .8 1.8 .8 1.8 .7 .61 .00

" Multivariate results on number built at start and number of strategies: pay, F(2, 53) = 1.93, p < .16;
goal setting, F(4, 106) = .70, p < .60; interaction, F(4, 106) = .11, p < .98.
 MOTIVATION, BEHAVIOR, AND PERFORMANCE
proving performance (Pritchard & Curts,
1973). These results do not conflict with
Locke's (1968), since financial rewards were
not contingent on goal attainment.
The inability of the film rating of effort to
differentiate groups significantly or to predict
performance was unexpected. The measure
did correlate highly with other measures of
effort, which supports the construct validity
of the measure. Admittedly post hoc, a pos-
sible explanation may be that speed of motion
represented an inappropriate operationaliza-
tion of effort for this task and that some other
operationalization such as smoothness or ef-
ficiency of motion would have been better. In
any case, use of films for rating effort merits
further attention.
The amount of variance in performance
that can be explained by motivation-depen-
dent variables presents a theoretical issue of
concern. The pattern of results could be con-
sidered weak given the nature of the task. It
is possible, however, to examine the relative
contribution of ability, effort, and direction
of behavior for predicting performance. This
was done by constructing composite scale
scores for the three constructs. Quantity per-
formance then was regressed on the set of
scale scores. In one regression, ability was en-
tered first followed by effort and direction. A
second regression entered ability last. Ability
alone produced a multiple correlation of .25,
which was significant. Inclusion of the two
motivation composites yielded a total mul-
tiple correlation of .51, with an additional
26% of variance being explained by effort
and direction of behavior. It should be noted
that these two composites were uncorrelated
(r = .04) and that each was significant re-
gardless of order of entry. When the motiva-
tion composites were entered first, they pro-
duced a multiple correlation of .45, with abil-
ity accounting for an additional 6% of the
variance. This suggests that on this task,
knowledge of individual motivation predicts
a substantial amount of performance variance
which cannot be attributed to ability. It also
suggests that the practice of using the per-
formance residual, with ability removed, as
an index of motivation may fail to consider
the performance variance common to both
37
ability and motivation. The ability composite
was significantly correlated with both the ef-
fort and direction composites (rs = .32 and
.29, respectively, p < .05). Finally, a fourth
variable made up of the product of the other
three failed to account for any additional
variance beyond that explained by the linear
combination (R2 change <.01). A different
finding occurred when quality performance
was examined. Depending on the order of
entry into the equation, ability accounted for
13% to 17% of the variance and the two
motivation composites combined predicted less
than 4%. The multiplicative term again
failed to explain any additional variance (R2
change < .01).
A question that stems from the above re-
sults concerns the choice of particular behav-
iors and performance outcomes that represent
the focus of motivation interventions. The
two manipulations used in this study pre-
dicted 11 % of quantity performance variance.
Effort and direction of behavior predicted
26% of quantity performance variance after
the effects of ability were removed. In this
study, the usual practice of setting perform-
ance goals and making rewards contingent on
performance was followed. But, as stated in
the introduction, perhaps attention should be
directed toward observable behaviors that
imply motivation and that relate to perform-
ance outcomes. Goals should be set for effort
and direction in addition to performance; re-
wards should be made contingent on all three
variables as well.
We admit that in many cases performance
can be measured more accurately than mo-
tivation. This should not be a problem, how-
ever, if motivation is operationalized in terms
of observable behaviors that are under indi-
vidual control.
The shift from performance outcomes to
observable behaviors has several advantages.
These advantages occur when performance is
(a) determined primarily by the situation,
(b) temporally distant from immediate be-
havior, and (c) multidimensional and not
amenable to reliable and valid measurement.
The position being advanced should not be
confused with operant conditioning or behav-
ior modification. The only intended similarity
38 JAMES R. TERBORG AND HOWARD E. MILLER
lies in the emphasis on observable behaviors
as appropriate dependent variables and in
the de-emphasis on performance outcomes,
which in turn result from those behaviors.
A second theoretical issue concerns the
complex relationships among motivation in-
terventions, task characteristics, and motiva-
tion dependent variables. Difficult goals on
simple tasks may cue subjects toward effort,
since these tasks have stronger effort-per-
formance relationships. Many tasks employed
in past research on goal difficulty could be
classified in this category. Difficult goals on
more complex tasks, which are high on path-
goal multiplicity, may cue subjects toward
various behavior directions such as generat-
ing, testing, and implementing alternative
strategies. Specific performance goals likewise
may affect effort when a clear strategy for
task accomplishment exists; however, when
tasks are more complex and nonprescribed, we
might expect to find goal specificity affecting
direction of behavior. Frost and Mahoney
(1976) made a similar point.
A further complication arises when we con-
sider the possibility that a specific and diffi-
cult quality goal may provide different cues
(i.e., more specific information) than a spe-
cific and difficult quantity goal. Quality goal
difficulty may be equated with quantity goal
difficulty on some dimension, such as percent-
age of goal accomplishment, yet the quality
goal may redefine the task in such a way that
the task becomes more complex with regard
to path-goal multiplicity. Thus, to say that
goal difficulty affects effort or that goal spe-
cificity affects direction may be incomplete,
since task characteristics (i.e., simple vs. com-
plex or quality performance vs. quantity per-
formance) and goal characteristics (i.e., dif-
ficult vs. specific) may provide different cues
with regard to effort and direction of behavior.
The task used in the present study was
chosen because a variety of production meth-
ods were possible for both quality and quan-
tity. The lack of goal effects on effort then
could be due to cues provided by the task
and the goals themselves, which may have em-
phasized direction of behavior rather than
effort.
The preceding discussion, although specula-
tive, does suggest possible directions for fu-
ture research. Greater attention must be di-
rected toward the operationalization and mea-
surement of motivation as a multidimensional
construct. Independent variables in motiva-
tion research should be examined more closely
so as to understand better the motivational
meaning of the manipulations. In other words,
do all manipulations of goal difficulty have
the same motivational impact? Finally, task
processes need to be explored in more detail
with regard to understanding possible differ-
ential effects of manipulations on dimensions
of motivation. It would appear that the issues
surrounding motivation are more complex
than they are usually presented.
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Received February 28, 1977