The Trouble with targets

In goal-setting, less is more. A few well-chosen aims can sharpen focus and boost productivity. Too many lead to stress and even disaster.

by Richard Reeves
Last Updated: 31 Aug 2010

There's a new word lurking in the lexicographical undergrowth. It's not in the Oxford English Dictionary yet, but I fear it will be. So far, it has appeared in a few academic articles and research papers, but it seems likely that it will enter the mainstream at some point. The word is 'targetology'. It's well-known that the Government is target-mad. But in fact, as usual, the politicians are merely following in the footsteps of business, especially the human resources profession.

The HR community has embraced targetology with embarrassing fervour. Discussions in HR are dominated by benchmarks, metrics, scorecards and key performance indicators (KPIs). The US-based Conference Board, a research alliance business, has established the 'Defining New Performance Targets for HR Research Working Group'. As the board alluringly explains: 'Evidence-Based Human Re- sources is the next generation in Human Capital Analytics'. The days must just fly by.

But one of the principal frustrations of dealing with people, rather than with things and money, is the difficulty of finding adequate measuring tools. It's straightforward to set a sales target, to count the money in the bank or ask the supplier to halve their delivery time. But ever since managers started thinking in terms of human capital, rather than human resources, the fetish for metrication has taken hold.

Targets are not intrinsically bad: clear objectives for any organisation, expressed as specific goals, should improve performance against them, whether that is to reduce hospital waiting times or sell more chocolate bars. Since the Government set a target to cut the number of people waiting for more than four hours in A&E, it has fallen from 23% of patients to just 5%. Targets are a powerful mechanism for communicating to an organisation: 'this is what matters most'.

But there are a number of caveats. First, it's vital not to confuse measurement with target-setting. In their famous article for the Harvard Business Review in 1992, Robert Kaplan and David Norton described a 'balanced scorecard', consisting of a range of measurements that a firm should be monitoring in order to check its health and performance. 'Think of the balanced scorecard as the dials and indicators in an aeroplane cockpit,' they said. 'For the complex task of navigating and flying an aeroplane, pilots need detailed information about many aspects of the flight.'

But the use of 'scorecard' to describe these measures has proved unhelpful: managers are inclined to start keeping score. But Kaplan and Norton were very clear about the limitations of individual targets, arguing that a good leader 'establishes goals but assumes that people will adopt whatever behaviours and take whatever actions are necessary to arrive at those goals. Senior managers may know what the end result should be, but they cannot tell the employees exactly how to achieve that result.'

Once an organisation becomes infected with targetology, things can get quickly out of hand. One or two clear targets can be powerful. A hundred targets is a recipe for confusion, stress and disaster. Employees can quickly come to feel as if they are being asked to throw darts in all directions at once. Just because targets are good, it does not mean more targets are better.

Targets also become less useful when they're a means to driving people to heroic levels of performance. Once an organisation sets 'stretch' or 'aspirational' targets, you know targetology has taken a dangerous hold. Targets should represent what senior management thinks ought to happen, not the contents of their wildest dreams.

Other problems occur when targets are closely attached to individual performance. If indi- viduals are rewarded for reaching certain sales targets, for example, a vicious internal market can be created, with colleagues scrambling over each other to get to the client and win their bonus. Healthy competition is a good thing: but it should be for promotion and advancement. As a rule, team targets are better than individual targets: and if a member of the team is letting the side down, you can be sure the others will soon be on their case.

Ironically, given the HR profession's enthusiasm for them, there's a particular problem using targets in this area. Human capital is an unhelpful term, because it implies a degree of objectivity and precision in an area that is, in fact, complex and deeply personal. Individual workers are not depositories full of human capital; creativity, friendliness, ambition, loyalty and energy can't go under the slide rule.

But there's a deeper problem. It's clear from a vast body of research that the more freedom an individual has over the way their job is done, the higher their productivity and the bigger the rewards reaped by the firm for which they work. People need to know the objectives of their organisation and they need to know how their performance contributes to them. Employee engagement is much more likely to follow from autonomy than from a battery of management-dictated targets.

There's lots of rhetoric in the HR world about nourishing the 'whole person' and letting employees 'bring the whole person to work'. These are worthy aspirations that fly in the face of targetology. Target-hitters or free spirits? You can't have both.

Richard Reeves may be contacted at:

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