International Journal of Business and Economics Volume 24, No. 3 December, 2025

The Mediation Effect of Effort Choices on the Goal Difficulty-Performance Relationship

Chaoping Li

James Madison University

Andrea Drake

Louisiana Tech University

Lin Chen

University of The Pacific

Abstract

It is unclear in the goal setting literature that how the goal–performance relationship is mediated by various effort choices in mixed incentive systems that combine group-based and tournament compensation. Given the common application of mixed incentives systems, it is important to understand the mechanisms through which goal difficulty positively affects performance. In addition, it is unclear if mediation effects vary according to group identity. Using a real-effort experiment, we predict and find that the relationship between group goal difficulty and performance is mediated by participants’ decisions to spend extra time on a task and sabotage teammates less often. When group identity is strong, choosing to spend more time on a task mediates this relationship. When group identity is weak, choosing to sabotage teammates less frequently mediates this relationship. The implications of these findings for theory and practice are discussed.

Keywords：Goal Setting, Group Identity, Effort Choices, Mediation Effect, Moderation Effect

JEL Classifications：M12, M14, M49

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