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all of this is why I'm struggling with the logic!
The maths problem you set us is easy, we can get the maths right. Getting the right maths is the hard part - working out exactly what you should be calculating in order to achieve the desired result. Management by numbers follows the principle of optimising the numbers which can be measured easily, not necessarily the things which would actually improve business performance. You can see that, in the hands of an idiot (in which class we can include the majority of managers), a set of numbers which count the right-first-time rate of an operation could lead to the dumb target of telling everybody to improve their right-first-time rate by 10%. Anybody who is already over 91% can't possibly hit the target, and the worst performing departments get the easiest targets.
gbj_tester-
I agree, but there's other aspects to target setting. A target should be challenging, but achievable, otherwise it can have a negative effect and be demotivational. In addition, to achieve some of these targets could cost a vast amount of money and resources, hence why we try to incorporate longer term thinking into target setting.
Anyway thank you again, it's made me realise I need to put more thought into my strategy.
efb
No, everyone gets the same bonus at our place, we're in it together!
Anyway, I'm getting a little confused and think I may not be explained some inverse target logic very well.
It's not as simple as the new targets are based on an amalgamation of results from recent history and the last few years both to recognise recent performance and reward effective term strategies.
I've not got the numbers with me but yes the ratio reflects allocation of no good parts targets. So Weld achieve good results, say 99% overall, they receive (relative to others results) only 2% of this year's target. It's therefore going to be around that figure again.
& all of this is why I'm struggling with the logic!!