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How to set your KPI Target

Target setting certainly has its challenges, more often than not, to get those responsible to be accountable enough to produce valid and achievable targets for monitoring.

Accountability is a wonderful thing and can really separate perception from reality. Performance data without some form of measurable target or goal can be meaningless and empty.

By default, we do know just by looking at some results, whether they are in fact good or bad results, so the basis of target setting does exist, albeit, in an ad hoc form. The trick is to extract these "meaningful" numbers from those concerned in the most painless and efficient manner possible.

Reliance can also be placed on strategic or operational plans, as KPIs will drive the expected outcomes of those plans.

Targets are not a static outcome. They should, as a matter of good business practice, be revised every three months. A 12-month target setting (though applicable for initial budget settings) can be unrealistic and serve as a disincentive.

Revisions of targets as an ongoing business practice ensure the current business and competitive environment are taken into account now. This will allow for more effective resource planning.

Remember that target-setting provides a level of comparison, that is the expectation against actual. Management wisdom then kicks in to determine the effect of any deviation, and sometimes non-deviation, to take appropriate action.


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