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Eighteen elementary examples of target setting pitfalls

Target setting should not be treated lightly!
Sophisticated man at a laptop
| Gareth Payne | Strategy

A key element of managing performance is to set challenging but achievable targets against meaningful performance indicators.

The achievement of these targets is a key element in an organisations duty to continually improve their services and to deliver their aims, objectives and priorities.

Target setting can come with its own problems, but listed below are 18 things to consider, which will help you avoid many of these.

1. "From the top"

Here is your starting point – what is your baseline position: what was the figure achieved last year?

2. Think of changes and variants

Are all of the conditions the same – capacity, budget, regulations, definition, local context, data systems, operating processes? If not – how are these likely to impact on performance?

3. Good-lookin’ performance

What does good performance look like? Is it to be as high a percentage as possible (e.g. percentage of invoices paid on time) or as low as possible (number of days sickness absence) – or should it be neither too high or too low (e.g. number of child protection cases, where too high might indicate too much intervention and too low might indicate not enough).

4. What is needed to maintain existing performance

What needs to be in place to maintain existing performance – this question can be crucial if high levels of performance are currently being achieved – e.g. 95% or more.

5. What could help to improve performance?

What could help to improve performance? Do you know where the blockages are – the problem areas? Are there plans in place to address these issues? How long might it take for the outcome of these actions to have an impact on performance?

For example, if additional resource has been allocated to recruit more staff with the expectation that this will help to address performance issues – realistically when might the recruitment process be completed and the new person be able to take up post: what about training and settling in to the role: how long before this additional capacity will have any effect on performance levels?

6. Dictation or Collaboration

Has the person who is involved at the operational level, delivering the service that is being measured by this indicator, been involved in the target setting discussion? Their local/practical knowledge is essential, and so is their buy-in and commitment to achieve it.

7. To count or not to count?

Is there a clear definition for the indicator which states exactly what should be counted and what should be excluded from the calculation?

8. Check for a statutory performance target

Is the indicator one of a national framework which has all of the parameters clearly defined? If so, have you set the same target for wherever it feeds into a performance outcomes framework?

For example, if it is an existing BVPI indicator that has historically been collected and reported through the Best Value Performance Framework, if it is used in the context of the Joint Area Review and is also used as one of the Local Area Agreement Outcome indicators – is the same target being used for each framework that it is reported within? If a stretched target is subsequently negotiated say for the LAA, it will have to be set to the same target level in all related Plans – failure to achieve will impact across the board. This needs to be risk assessed, as such a failure on and indicator that also belongs to a CPA Service Block set might affect the overall rating for the Local Authority.

9. What about what others are achieving (benchmarks)

When reviewing performance and setting targets, consider our current benchmark position. Benchmarking allows you to set local performance in a wider context: at local level we can track improvement and achievement of target, but in the wider context are we really doing well – are others doing much better?

We might be able to show that we have improved performance from one year to the next, and have consistently met the targets we have set ourselves, but if we are in the bottom 25% of a group of similar service providers, then there may well be good practice tips to learn from top performers.

10. Local metrics could mean a lack of comparability

If a local performance indicator is created, bear in mind that this will provide you with a limited amount of information and it will not allow you to benchmark your performance with other providers.

11. Set disaggregated targets for business-critical metrics where possible

For a selected number of ‘key’ performance indicators, set targets for and review the data by it contributory levels – for example if the overall indicator is made up of reports by each town team or each school in the borough, set targets and report data at that level. There might well be a sound reason for one area to have a tighter target level than another, and it is better to set realistic targets that staff feel able to buy-in to it and give a commitment to try to achieve. If a target is totally unrealistic, it will often be ignored.

For example, with sickness absence, some groups of staff have higher incidence of sickness because of lifting heavy weights, or working with vulnerable people and the need to ensure viruses are not transmitted. It might therefore be acceptable for such service areas to have a higher target than other service areas consisting mainly of general office based staff. The corporate total will however be the sum of the component parts.

12. Internal comparability can engineer better collaborative working

Where the data is reported down to ‘team’ level there is often healthy competition – teams will scrutinise each other’s performance levels and where there are notable difference in the levels, will ask questions about what has been done differently to achieve the performance levels reported.

13. Smaller cohorts mean big variances

Bear in mind that if the indicator relates to a very small number, a seemingly large percentage might only mean an increase or reduction of 1 person.

For example, if the cohort is 50 people, an increase or decrease of 4% will be 2 people, whereas if the cohort is 5000 people, to achieve a reduction of 4% will impact upon 200.

14. Consider potential seasonal impacts

Consider whether it is appropriate to profile targets to take into account, for example, seasonal variations in performance.

For example, the Composted Waste PI has lower performance levels in the winter months when people are generally not producing garden waste for composting: the quarterly performance targets are set to anticipate these performance swings.

15. Would the data source stand up to an external (or internal) audit

Consider the data source for your performance information: is the data quality checked and auditable? Can you be sure that the same type of data is being reported each period – there is a pre-defined report which extracts the same set of information from the database? If new data reporting mechanisms are introduced, these could produce a variation to the expected level of performance, which could in turn impact upon the targets set. Regular data quality assurance checks/validation should be undertaken on a regular basis throughout the year so that the data that feeds the performance indicator is consistent.

16. A robust target setting process is imperative

Ensure that there is a robust target setting process in place – a detailed proforma of historical data, most recent performance data, and proposed targets for the next three years. Involve the service provider and head of service in the agreement process. For each target, apply a robust challenge – ask questions, as outlined above, to check that there is clarity about what is to be measured, there is a means of capturing the information at regular intervals throughout the year, that the proposed target is achievable, and whether or not the target should be profiled to reflect season variations, etc.

17. Set the targets and lock them down

When there is satisfaction that the target is appropriate, get key players to sign their commitment: the target should not then be changed within the reporting year, unless there are exceptional over-riding reasons e.g. a late notification by government office of a change in the definition and calculation of an indicator. Any such changed target should be subject to the same challenge and sign off processes as the initial target setting activity.

18. Utilising stretched targets

Is the target the target that you should be working towards or is it only a position of continued acceptable performance e.g. if you always achieve 90% performance, then you won’t performance to slip; but if you can meet a stretched target then is there an opportunity for additional rewards?

For example if a debt collection team has an annual recuperation target of 90% and they achieve that everyone is happy. However, if they achieve 120% – because they’ve managed to successfully collect some historic debt (that perhaps otherwise would have had to be written off) as well, then maybe there is opportunity for them to be ‘rewarded’ with additional budget that can help them increase their annual recuperation target to 97% because they can recruit an additional person to do so?

Gareth Payne

Senior Consultant

Gareth is one of our Implementation Consultants. He has a wealth of experience in the public sector, particularly local authority where he spent 18 years delivering on policy, citizen engagement and performance management in the West Midlands.

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