How to set the right performance targets: a 10 step target setting tool

How to set the right performance targets: a 10 step target setting tool

This tool is based on research by Professor Mike Bourne and Dr Monica Franco-Santos at the Centre of Business Performance, Cranfield School of Management and was adapted from The impact of performance targets on behaviours: a close look at sales force contexts, CIMA/ Cranfield School of Management, 2009.

Targets are frequently used as a motivational technique. Founded on well-established theories of achievement motivation, targets that are specific and perceived achievable can help to focus managerial action, encourage people to succeed and drive superior performance.

But setting the right targets is tricky and has become a real issue for many organisations.

Based on a two-year study and interviews with nearly 100 sales people, the Cranfield School of Management have identified the common barriers to setting effective targets, and developed a 10-step tool that to help improve the target setting process.

Common target setting issues

There are three common issues that undermine the effectiveness of targets. These are:

  • The forecast was mainly based on past performance so people do not over achieve as over achievement will make the next year’s target much harder
  • Some targets are based on the wrong performance measures which is often referred to as ‘hitting the target and missing the point’
  • Targets were ‘given’ to the sales people and no ownership was created.

10 step target-setting tool

This target-setting tool will help you better understand and implement sales targets. It is divided into 10 steps and presented in the form of a wheel to illustrate its cyclical nature.