Performance Management and Goal Setting: A Case Study of Wells Fargo

This case study explores the principles of goal setting theory and their relevance to the performance management of Wells Fargo. It also suggests adopting elements of the Wells Fargo system to reduce fraudulent practices in organizations.

case study

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Q1 Goal setting and its relevancy to the case study.....................................................................3
Q2 Adopting the elements of system of Wells Fargo..................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
The performance management of the organizations can be a successful step for achieving
the improvement in the performance of the organizational operations making the employees
more efficient in their work (Latham and Locke, 2018). The case study of the Wells Fagro
explains that if performance management implemented correctly can benefit the organizations.
The project will explain about the various principles of the goal setting theories. The aim of the
project is to understand the various aspects of the performance management.
MAIN BODY
Q1 Goal setting and its relevancy to the case study
Goal setting theory
Goal setting theory is regarded as an employee engagement tactic in which specific and
measureable goals are set for bringing improvement in the level of productivity. This theory is
based on the assumption that it is better to set specific and measureable goals rather than setting
unclear goals (Locke and Latham, 2019). The theory considers the belief that well defined goals
are effective at motivating the employees. Furthermore, it also believes that the employees are
more likely to achieve the goals if they are specific and measurable.
Following are the principles of the goal setting theory: Clarity- According to this principle, the goals which are set should be clear and specific. Challenge- It is important for the goals to be challenging so that the employees are
engaged and focused throughout the process of reaching the goal (Kim, Beehr and
Prewett, 2018). However, if the goals set by the organization are found to be too tedious,
it will demotivate the employees and reduce their level of achievement satisfaction. Commitment- It is important for the employees to feel commitment towards the goals and
to understand and support them (Schmidt, 2019). Absence of commitment will make the
employees unable to enjoy the process of achievement. Feedback: It should be ensured that regular feedback is provided to the employees
throughout the process of achieving goals. This ensures that the various tasks required to
achieve the goals are kept on track.

 Task complexity- This theory requires that the goals are broken down into smaller goals.
Further, review should be performed after each smaller goal is reached (Locke and
Latham, 2020). This is essential so that the employees are updated about their overall
progress.

Evidence of principles in the case
In the provided case about Wells Fargo, the principles of Goal Setting Theory have only been
met to a certain extent: Clarity: This principle was efficiently evident at Wells Fargo as the goals set were
specific and clear. The community bank was based on aggressive sales culture. Once the
goals were set, they were pushed down to the different regions and finally to the retail
bank branches. At each level of the hierarchy, the employees were measured against their
performance. Challenge: This principle was not evident at Wells Fargo as the senior regional leader set
unrealistic goals. The goals were too tedious to achieve leading to demotivation in the
employees (Sales Practices Investigation Report, 2017). Further, the employees were also
asked to sell those products which were not demanded by customers. This lead to
dissatisfaction among the employees regarding the goals. Commitment: At Wells Fargo, the employees were not committed towards the goals.
They worked to achieve the goals due to the fear of being terminated. They also achieved
the goals owing to the fear of career- hindering criticism by the seniors. This also made
the employees engage in misconduct as they were under extreme pressure to achieve the
goals. Hence there was lack of genuine commitment which is the prime requirement for
achievement of goals. Feedback: In the case study of Wells Fargo, The feedback is not evident as the employees
were not given regular feedback about the goals and their performance. The employees
were not praised or rewarded by the company because most of the staff was low sales
performer, and they had the opinion that the rewards are given to the high sales
performers.
 Task complexity: At the Wells Fargo the employees were given the high target sales and
made them to achieve the target in time. This made the employees to lose confidence in

their performance and the employees were not able to perform better because they felt
that the task is very tough because it was not broken into small tasks.
Enhancing employee performance by highlighting the information
The principles of the goal setting theory helped the Wells Fargo in many ways making
the employees to perform and implement the changes in their performance. The employees were
facing many issues in the organization and had to make the various sacrifices so that they does
not loose the job.
 Clarity- The factor of clarity helped organization in making the employees to understand
and achieve the goals of the company. The company helped the employees with the
training and developing their skills as the organization was looking to make the
employees meet the sales target as effectively as they can.
 Challenge- The principle of challenges does not help the Wells Fargo in improving the
performance of their employees as the goals that have been set by the organization was
too rigid and tough for the employees to achieve. This demotivated the employees and
made the organization to face the lack of creativity in the employee performance.
 Commitment- The employees of the Wells Fargo does not found any interest in
committing themselves to the goals of the company. The employees were not in the
opinion that they are being treated equally and discriminated on the grounds of their sales
performance (Jangbahadur and Sharma, 2018).
 Feedback- The Wells Fargo did not provide the employees with enough feedbacks as
they did not felt a need of it. The factor of feedback does not help the organization as the
employees were not being praised or provided with the advices that can help them in
performing better. The company mainly focused on achieving the higher sales number
from their employees which makes the employees untrained and inexperienced.
 Task complexity- This factor helped the organization in enhancing the performance of
the employees as the goals were not broken into smaller goals and this made the
employees to obtain the maximum efficiency and skills in their work.

Q2 Adopting the elements of system of Wells Fargo
The elements of the performance management system can be adopted for reducing the
fraudulent practices in the organization.
Review process
The review process of the Wells Fargo will be adopted as the strategy has helped in
analysing the root problem of the employee demotivation as the employees of the Wells Fargo
were judged on the basis of their sales performance (Ali and Anwar, 2021). The review process
will be adopted and will be used in training the employees to perform better in every aspect of
their tasks rather than just one task. The staff will be trained by the highly skilled and expert
managers so that there is less chance of fraudulent practices in the organization. The employees
will be provided with the various types of helps and feedbacks so that they do not feel that they
are bounded to something rigid. The employees will be assured that there is no need to be afraid
of the results of their projects as the help will be provided to them to fix the problems so that the
employees can be trained, and they by themselves will be able to analyse the problems and solve
it (Kapur, 2022).
The staff will not be terminated on the basis of not meeting the targets instead of that the
seniors will help the employees to get confidence and achieve the various skills that can help the
employees in achieving reaching the targets. The employees and the managers of the
organization will be highly skilled and experienced as the company will provide them with the
required training and help that is necessary for them to perform well in their day to day
operations.
Reward system
The reward system will be applied by making the employees to earn the incentives on the
basis of their overtime and extra work that they do. The employees will be helped by the seniors
in understanding the process of achieving extra so that the staff will not be confused in the
incentive system. The incentives will be given for the work that the employees will do after
completing their main tasks. This is because it will make the staff to meet the daily performance
target instead of meeting the unrealistic targets (Secinaro and et.al., 2019). All the employees
will be offered the same scheme of the incentives so that the lower levelled employees does not

feels that they are being discriminated on the grounds of their position. This will give all the
employees an equal opportunity to earn extra. This will motivate the employees to work more
than their regular limit so that they can earn extra and the organization will have the benefit of
getting extra work done.
The employees will be able to perform more effectively so that they can achieve the extra
amount from their salary. The employees will be clearly informed about the incentive scheme so
that they do not get confused or misguided by any other person.
Disciplinary process
The disciplinary process will be adopted for the successful conduct of discipline in the
organizational operations so that the employees does not feel that they are being forced to do
something or leave the job (Hultman, 2020.). The proper stages of the disciplinary process will
be used if the employees fails to comply with the rules and regulations or the daily process of
their allotted projects.
 Verbal warning- The employees who are not performing well or does not comply with
the rules and regulations of the organization will be given a verbal warning stating that
they are obligated to perform their allotted tasks and activities. This will be necessary for
them so that the employees are not in the trouble of non adherence to any laws.
 Written warning- The employees if does not follow the rules and regulations again and
makes the same mistake as the first one they will be given a written warning stating that
they are in the fault of not performing their allotted work effectively and are not
complying to the rules and regulations. This is necessary for the employees to follow and
comply to the rules of the organization so that they can perform in the organization
effectively and without facing any problems.
 Final written warning- The employees after not complying to the written warning will
be given a final written warning stating that this is there last warning regard to their
actions and non compliance. It will be the final warning for the employees that they are
now being informed for the last time that they are required to change their behaviour and
work methods. If the employees have been facing any problem regard to their
performance they can communicate it with the manager (Pulakos, Mueller-Hanson and
Arad, 2019).

 Dismissal- The employees after not complying to the warning and acting accordingly
will be given a dismissal based on their non compliance to the rules and regulations of the
company and the non adherence to the warnings. The employees will not be given any
notice after the final written warning and will directly be terminated.
However, in the case of a serious issue the employees will be directly dismissed without
any notices or warnings according to the seriousness of the default.
CONCLUSION
Thus, it can be concluded that the organizations can successfully achieve the performance
management in the operations of the organization by making the employees to comply with the
rules and regulations of the business. This can help the organizations to bring discipline in the
day to day operations and progress of the organization so that the employees can perform
effectively. The various principles of the goal setting theory such as the clarity of goals and
giving feedback to the employees based on their performance can help the organizations in
achieving the enhanced performance management of the employees in the organization.

REFERENCES
Books and journals
Ali, B.J. and Anwar, G., 2021. The mediation role of change management in employee
development. Ali, BJ, & Anwar, G.(2021). The Mediation Role of Change Management
in Employee Development. International Journal of English Literature and Social
Sciences. 6(2). pp.361-374.
Hultman, K., 2020. Building a Culture of Employee Optimization. Organization Development
Journal. 38(2).
Jangbahadur, U. and Sharma, V., 2018. Measuring employee development. Global Business
Review. 19(2). pp.455-476.
Kapur, R., 2022. THE SIGNIFICANCE OF REWARD MANAGEMENT IN
ORGANIZATIONS. International Journal of Information, Business and
Management. 14(2). pp.83-92.
Kim, M., Beehr, T.A. and Prewett, M.S., 2018. Employee responses to empowering leadership:
A meta-analysis. Journal of Leadership & Organizational Studies. 25(3). pp.257-276.
Latham, G.P. and Locke, E.A., 2018. Goal setting theory: Controversies and resolutions.
Locke, E.A. and Latham, G.P., 2019. The development of goal setting theory: A half century
retrospective. Motivation Science. 5(2). p.93.
Locke, E.A. and Latham, G.P., 2020. Building a theory by induction: The example of goal
setting theory. Organizational Psychology Review. 10(3-4). pp.223-239.
Pulakos, E.D., Mueller-Hanson, R. and Arad, S., 2019. The evolution of performance
management: Searching for value. Annual Review of Organizational Psychology and
Organizational Behavior. 6. pp.249-271.
Schmidt, G.B., 2019. The need for goal-setting theory and motivation constructs in Lean
management. Industrial and Organizational Psychology. 12(3). pp.251-254.
Secinaro, S. and et.al., 2019. Hybrid organizations: A systematic review of the current
literature. International Business Research. 12(11). pp.1-21.
Online
Sales Practices Investigation Report. 2017. [Online]. Available Through:
<https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/presentations/
2017/board-report.pdf>. [Accessed on 23 March 2022].
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