The 4CF method encourages you to think about a goal in its widest sense and is complemented by using the SMART method described here to then state the goal in a specific way.
How to set useful targets for your business The importance of measurement and target-setting Performance measurement and target-setting are important to the growth process. While many small businesses can run themselves quite comfortably without much formal measurement or target-setting, for growing businesses the control these processes offer can be indispensable.
The benefits of performance measurement Knowing how the different areas of your business are performing is valuable information in its own right, but a good measurement system will also let you examine the triggers for any changes in performance.
This puts you in a better position to manage your performance proactively. One of the key challenges with performance management is selecting what to measure. The priority here is to focus on quantifiable factors that are clearly linked to the drivers of success in your business and your sector.
These are known as key performance indicators KPIs. See the page in this guide on deciding what to measure. While financial measures of performance are among the most widely used by businesses, nonfinancial measures can be just as important.
For more information about financial measurement, see the page in this guide on measurement of your financial performance. In this way, targets form a crucial link between strategy and day-to-day operations. Deciding what to measure Getting your performance measurement right involves identifying the areas of your business it makes most sense to focus on and then deciding how best to measure your performance in those areas.
Focusing on key business drivers Your performance measurement will be a more powerful management tool if you focus on those areas that determine your overall business success. This will vary from sector to sector and from business to business. So put some time into developing a strategic awareness of what it is that drives success for businesses like yours.
A manufacturer producing and selling low-cost goods in high volume might focus on production line speed, while another producing smaller quantities using high-cost components might focus instead on reducing production line errors that result in defective units.
Finding your specific measures Once you have identified your key business drivers, you need to find the best way of measuring them. Again, your priority here should be to look for as close a link as possible with those elements of your performance that determine your success.
For example, you may decide that customer service is a strategic priority for your business and to therefore start measuring this.
But there are many ways of doing so. You might consider measuring: The challenge is to find which specific measure or measures will enable you to improve your business. This type of measurement unit is often referred to as a key performance indicator KPI. The two key attributes of a KPI are quantifiability i.
See the page in this guide on choosing and using key performance indicators. Using standardised measures There are standardised performance measures that have been created which almost any business can use.
Examples include balanced scorecards, ISO standards and industry dashboards. Choosing and using key performance indicators Key performance indicators KPIs are at the heart of any system of performance measurement and target-setting.
When properly used, they are one of the most powerful management tools available to growing businesses. First, they should be as closely linked as possible to the top-level goals for your business. Second, your KPIs need to be quantifiable.
Third, your KPIs should relate to aspects of the business environment over which you have some control. Getting the most from your KPIs The purpose of performance measurement is ultimately to drive future improvements in performance.SMART is an acronym for Specific, Measurable, Attainable, Realistic, and Time Bound.
Goals should be as specific as possible, even if this means breaking them down. If a goal is not measurable, it is not possible to know whether a team is making progress toward successful completion.
– Explain how to agree realistic targets – The targets being agreed to must be realistic so that the person doing the job has a good chance of completing them, .
SMART is an acronym for Specific, Measurable, Attainable, Realistic, and Time Bound. Goals should be as specific as possible, even if this means breaking them down.
If a goal is not measurable, it is not possible to know whether a team is making progress toward successful completion.
Explain the purpose and benefits of agreeing realistic targets for work. The purpose for agreeing realistic targets for work is to keep everyone on task and focused on accomplishing a target that is obtainable, not out of reach.
May 27, · Best Answer: The targets must be realistic, so that the employee has a good chance of attaining them. This lets him feel good about himself and allows him to work without stress.
If the targets are set too high, the employee will always be under pressure to do the impossible, will feel a failure and have a dissatisfied rutadeltambor.com: Resolved. 1 4 Explain How To Agree Realistic Targets. Management Skills – Summary 2 Targets The main part of the strategic duty of a manager is to achieve objectives.