Setting performance goals based on historical data and past performance creates:
A)the horizon problem.
B)a compensating differential.
C)opportunism.
D)a ratchet effect.

Question

Quizplus · Accepted Answer

Setting performance goals based on historical data and past performance can create a ratchet effect, where the goals become increasingly difficult to attain over time, even if the underlying conditions or resources have not changed. This can lead to demotivation and a lack of engagement among employees.

Setting Performance Goals Based on Historical Data and Past Performance