Managers often establish thresholds to indicate acceptable levels for employee performance, both for behaviors they want to encourage (sales) and discourage (absenteeism). Those thresholds, says Chicago Booth’s Ed O’Brien, are essentially a prediction of attainable employee performance—but as with many predictions, they can prove inaccurate or unreasonable when real life mixes in complicating factors. O’Brien explains the results of experiments he conducted to probe how people respond to this reality, and what they mean for how managers should set thresholds in the first place.

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