Setting goals * As a CEO of GE Jack Welch was known for his use of goal setting to motivate higher levels of achievement. To achieve GE’s leadership position and to drive constant growth, Welch preached a philosophy he called “planful opportunism,” employees were given an over-reaching stretch-goal and were permitted to do whatever it took to reach the target. For example, Welch required the newly hired head of productivity, William Sheeran, to achieve an impressive 5% annual productivity. Sheeran never attained that goal, however his efforts resulted in increasing productivity to over 2%. Welch consistently set far reaching goals in an attempt to move the company in the direction he wanted.
In fact, he realized that he could motivate higher levels of performance by setting goals that were much higher than the managers would have set for themselves. These “stretch-goals” often caused the managers to outperform their original targets.

* The phenomenon that helped increase their performance is called the “slope of satisfaction” which refers to the incremental level of satisfaction a person gains for each additional unit of effort towards a goal. The slope increases as the person approaches the goal. Therefore, as a person gets close to reaching a goal he is more motivated to try to close the gap between the current level of performance and the target. Furthermore, he is likely to continue striving for it because the incremental satisfaction gained is thought to be worth the additional effort. Employees realized that even though they often didn’t reach the stretch goals they still performed at their highest possible level and therefore enjoyed personal satisfaction (as understood by Maslow in his hierarchy of needs).
Empowerment (Empowering employees at all levels of the organization) * When Welch took over GE, he had a vision of creating an