| Abstract: |
We study how workers’ non-binding self-set goals affect their production and
whether goal nudges (ability-calibrated goal hints) make goal setting more
effective. In a real-effort task, participants first complete an ability
pretest and are then assigned to one of three treatments: a no-goal baseline,
a personal goal treatment with no external hint, or a personalized goal nudge
that participants may accept or modify. We document a positive link between
goals and production. However, merely asking workers to set goals is
ineffective: when left unguided, workers anchor on conservative goals well
below those induced by goal nudges, leading to underperformance. In contrast,
goal nudges increase production and substantially reduce on-the-job leisure,
hence inducing higher effort and engagement. These gains are concentrated in
early periods, when workers are most uncertain about their own ability, and
attenuate as they accumulate task experience. We develop a theory in which
this effect operates through self-efficacy. Goal nudges act as informative
signals that increase workers’ beliefs about their likelihood of success,
thereby raising self-set goals and, in turn, increasing effort. Our findings
suggest that personalized goal nudges offer organizations a low-cost
complement to monetary incentives, particularly valuable for workers who are
new to a task or role. |