Revisiting the Impact of Goals on Affect and Effort*

Performance goals are one of the most prevalent management controls used in practice to address motivational concerns. Goals influence employees' affective state by enabling them to evaluate their performance against a standard and determine if their performance is satisfactory. The objective of this paper is to understand and extend the current management accounting literature on goals and their effect on employee effort via affect. I address this objective in three ways. First, I conduct a systematic review of the management accounting literature to determine what we know about goals and determine if the literature acknowledges the important effects that goals have on affect. From the literature review, I note the paucity of research that examines the affective consequences of using performance goals. Second, I discuss some of the prominent theories from psychology that explain the relationship between goals and affect and provide suggestions for research questions. Third, I develop an experimental manipulation using online participants to demonstrate that goal attainment and goal failure lead to significant positive and negative affective reactions, respectively. By sharing my research method, I provide a starting point that accounting researchers can employ to examine how affect can influence effort, which has an important causal linkage with performance outcomes.