Multiple Targets

If you’re a performance management practitioner, you already know that metrics should have both an actual and a target value.  Actual is the current value of a metric while target is the value that you would like it to be. (NB: I strongly prefer using the word target instead of goal because the latter can easily be confused with objectives.)  In fact, creating a target for a metric is one of the three required steps in turning it into a key performance indicator.

However, you may not have considered that a target is the value you would like a metric to be at a specific point in time.  If that point in time is far enough in the future, comparing the current actual value to a future target value may lead to unexpected consequences.  

For example, a call center might want 85% of the incoming calls to be resolved on first contact, leaving a small percentage that have to be followed up. However, if the first call resolution rate is currently low, it might not be practical to achieve that value for 18 months.  If we mistakenly compare current performance (say 45%) to the long-term target performance (85%), we’ll likely end up with a KPI that is red and demotivate employees.  After all, they know that it’s not possible to reach that performance right away and will interpret the results to mean that management doesn’t believe that they are trying to improve.

If we instead establish multiple periodic targets (quarterly or even monthly), we can compare the current actual value to the current target. In other words, what the value is versus what we wanted it to be right now.  For the call center, we might use quarterly targets of 50%, 60%, 70%, 75%, 80%, and 85%.  After one quarter, we compare the actual of 45% to the target of 50% and conclude that we’re doing reasonably well so far.  However, after the second quarter, we need to have made significant improvement or else we will compare unfavorably against 60%.

You might have noticed that the target values are not evenly spaced.  In essence we are saying that we can make more progress at the beginning – low hanging fruit – but later on it will be harder to continue to improve.

By adopting multiple periodic targets, we are monitoring our incremental progress towards defined milestones, instead of just hurdling towards a destination. And by understanding our progress, we can make course corrections along the way – before it’s too late.  So, the next time your boss acts like the little kid in the back of the car and asks “Are we there yet?”, you can answer “No, but here’s where we are compared to where we expected to be right now”.

4 Responses to Multiple Targets

  1. […] is not motivating enough for you to go the extra mile”. I say that objectives should have multiple stretch targets over time so that 85% attainment at any given point should be […]

  2. […] at various points during the race to benchmark performance.  Depending on your skill level, the multiple targets could be 5:00 at mile 4, 5:35 at mile 10, and 5:20 at mile 20.  An appropriate grading system […]

  3. […] (ie. the target).  They recognized that performance should be compared against quarterly targets not just yearly ones.  However, because quotas varied widely by individual and region, sales management didn’t want […]

  4. […] (This 2007 post provides an example of multiple targets in a call center.) […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: