Influence of goal attainment level and empowerment on motivation and work effort intensity of middle managers

Abstract

A common challenge senior leaders face is how to keep their employees motivated. A tool often used to address this issue is a variable compensation program. Although historically this type of compensation was used primarily for executives and sales employees, it is now routinely used for all management levels, including middle managers (MM). This group of managers are critical to the organization’s success by ensuring that the tactical performance of the mid to low-level employees supports the corporate strategic financial goals. The MMs variable compensation is often tied to a corporate strategic financial goal. This study explores the relationship between the level of goal attainment for the corporate strategic financial goal and the MM’s resulting motivation and work effort intensity. I propose an inverted-U influence of goal attainment on MM’s work motivation, such that when goals are out of reach, motivation is low, when goals can still be attained, motivation is higher, and when goals have already been attained, motivation decreases. The influence of goal attainment level on work motivation is moderated, however, by the degree to which MMs are empowered to enact tactical changes in their work processes. As empowerment increases, the influence of goal attainment on work motivation decreases, in effect flattening the curvilinear influence of goal attainment level. The primary managerial contribution of this research is that organizations will recognize that knowledge of goal attainment level matters, but its effect on motivation is not linear. Understanding this will help mitigate the potential negative impact on the MM’s motivation level and work intensity, particularly if they do not feel empowered to adjust their activities to achieve the goal.