The new year is the perfect time to set goals, not only on a personal level but also in the workplace. Research shows that this works: employees at small cassava processing companies in Ghana increased their production by 16% by setting daily goals, even without financial incentives. Economists from Tilburg University demonstrate that goal setting is a cost-effective practice benefiting both workers and employers in small businesses.
The study focused on workers in small cassava processing firms in Ghana, a country where many small businesses operate in informal settings. During the experiment, workers were first trained to track their daily production. A subset of participants was then asked to set daily non-binding production goals.
Although meeting these goals had no monetary consequences for the employer, setting goals does have remarkable results. Workers produced 16% more, achieved 8% higher hourly productivity, and firms saw a 13% increase in average labor output. For piece-rate workers, the results were even more striking, with a 32% increase in output and a 24% rise in productivity.
Goal setting leads to greater output’Setting goals helped workers structure their day better and focus more on their tasks’, explains researcher Elena Cettolin. ’Even without financial incentives, we observed significant improvements in production and productivity. This demonstrates the powerful impact of behavioral interventions like goal setting.’
Simple and affordableOne of the most notable aspects of this intervention is its simplicity and affordability. Employers provided workers with paper booklets to record their production and goals. ’This makes it a particularly accessible solution for small businesses in developing countries, where resources are often limited’, says Patricio Dalton. Moreover, workers reported no increase in stress or dissatisfaction. On the contrary, goal setting was perceived as a natural and valuable addition to their daily routine.
Self-regulation toolThe success of goal setting seems to stem from one key mechanism. Goals are likely to act as a self-regulation device that workers use to maintain focus and reduce distractions during their work shifts. Consistent with this mechanism, the researchers find that the practice is more helpful for workers who are more likely to need a commitment device. The researchers also found that goal setting was especially effective for piece-rate workers. ’When workers directly benefit from their productivity gains, setting goals motivates them even more to perform at their best’, notes Cettolin.
Conclusion: scalable and effectiveWhile the study was conducted in Ghana, the researchers emphasize that their findings should be applicable to industries facing similar challenges. ’Small businesses are the backbone of many economies in developing countries. Boosting their productivity can be a key driver of economic growth’, says Dalton. ’There’s a misconception that improving productivity always requires significant investments. Our work shows that simple and affordable techniques can make a big difference’, he concludes.
For more information and interview requests, please contact researcher Patricio Dalton ( p.s.dalton@tilburguniversity.edu ).
