In every organization, targets are set so that there are goals so that employees could focus their energy on to drive towards the necessary results. Goals are important as they allow an establishment of a crystal clear direction especially when the goals have already been clearly communicated to the employees and they have understood what needs to be done to achieve it.
It is important for the employees to clearly know what is expected of them and each of them understand their role and it can truly make a difference to the company. It is even more important for them to embrace the goals in a whole hearted manner.
A janitor, whom many might perceive as a job at a far end of the ecosystem of the employee hierarchy, has a very important job function. His role is to maintain the cleanliness of the toilet so that the many visitors who use the facilities would not leave the place with a bad taste.
Imagine an expensive restaurant that prides itself of serving delicious mouth watering food yet the toilet stinks. Customer will only remember the place for its bad toilet even though the food is great.
After all, you might give a consistently good service to a customer however all it takes is for you to fumble once.
Customer will remember you for the fumbling experience instead of the consistent good service that you have rendered.
With respect to sales, it is about setting the right kind of targets for them and it also determines the type of commissions that they will bring back home.
After all, salesmanâ€™s primary understanding is that if they sell more at a certain acceptable margin, the company makes more money hence they will receive more commissions.
It is never about the number of hours that they have to work.
It has always been about the results that need to be achieved.
If they only need one week to achieve the desired monthly results it either means that they are super efficient and good in what they do or the management do not understand about the nature of the market at all hence setting a target that might be too low than it should be.
Therefore it is kind of unproductive to get sales people to submit activity daily report.
Will you get better sales with high quality daily reports?
If the reports are high quality ones, it means the sales people would have spent a lot of time doing it.
How then will they have more time to do sales?
Are they evaluated based on sales or the quality of the daily reports?
Some things are meant to be crystal clear.
Only those who do not truly understand the meaning of sales would most likely do that.
After all, if the funnel and forecast are weak and contains prospects that after much discussion do not have any potential as trumpeted, you would have already gauge the quality of the activity of the salesperson.
Some companies set lofty targets for the sales force.
Targets that can never be achieved in a realistic manner.
Some companies set modest targets.
Targets that can be surpassed within six months.
The danger about setting the wrong kind of targets is straight forward.
If a company sets a too agressive target which in reality is not achievable, the sales force would have known from day one, albeit a miracle, that they would not be able to receive the expected incentive. This will not motivate them in the right manner unless the targets have been discussed with them and they could see the fullest potential of the target and where are the hidden upsides.
If a company sets a mild target and the sales force would have known that it is possible to surpass it within six months, they would want to know the additional incentives which will be accorded to them if they exceed the targets by a certain percentage.
Some companies set targets whereby if a sales person were to achieve 70% of the total budget, they would then be entitled to the full commission.
Sales persons are smart people.
If they know that they only need to achieve 70% of the total budget, why would they slog harder unless there are additional incentives associated to surpassing the primary target?
Once they reach the target, they would most likely take a more relaxing approach and delay more sales to next year.
If by third quarter the sales people are too far behind their budget, would it not be more advisable to transfer the potential sales to the next year?
So setting the right kind of targets is an important motivational tool and the success or failure of a company does indeed on depends how they set the targets in the very first place.
If the targets are set and every year the targets are not met, then nobody will ever believe in the targets anymore.
And nobody will make an effort to surpass it, let alone achieve it.
This will in turn breed a new culture of non performance.
Non performance will demotivate the performance driven people.
The performance driven people will eventually leave.
As they do not wish to be part of a non performance culture.
And only the non performers will be left behind.
And the decline will continue to spiral without control.
Unless drastic measures are taken quickly.
The fortunes of the company will take a tumble.
If the targets are set and every year the targets are surpassed, it will instill confidence in the team and allow them to drive towards greater height.
Confidence is a powerful motivator.
And even if the targets on one of the year is set too high, the previous success of surpassing the targets will allow act as the right confidence tool for the team.
After all, if the company can exceed the targets for three successive years, why could they not surpass it for the fourth yet?
The journey of a thousand miles begins with a first step.
If the people who propose the targets set it wrong from day one, it could only end in a possible failure.
And a calendar year of futility.
Why do they not do it right in the first place?